HERE WE GO AGAIN: BUSINESS MANAGER CHARGED WITH STEALING $259,000 FROM CHURCH

DATELINE: March 27, 2008, Chicago

Hey, why worry about financial controls? They cost money, they add administrative burden, and you like spending time on mission rather than accounting. The reason can be found in Flossmor, Illinois, a suburb of Chicago. Yesterday, Eric Herman of the Chicago Sun-Times reported that Beverly Houston had been arrested and charged with stealing over...

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$250,000 from Infant Jesus of Prague Church. Church Worker Charged With Stealing $250,000. Houston is described as the church's business manager. Why would someone in a position of trust allegedly do this, particularly to a religious institution? One law enforcement official told Herman, "Word is she likes to gamble, and she's not real good at it."

You would think that any scheme that nets $250,000 before being detected must be pretty sophisticated. But you would be wrong. Herman reports that Houston is alleged to have written checks to herself—144 between April 2006 and October 2007. No forensic audit needed here. Obviously, there was no dual signature requirement in place. And it is hard to imagine that someone other than Houston was charged with reconciling the monthly bank statement. We would be willing to bet that the statements were never reconciled. In other words, two of our top ten financial controls apparently were not in place. The loss could have easily been prevented with just those two controls.

You would hope that church officials will learn from this disaster, but don't count on it. Herman and Stefano Esposito report in today's edition of the Sun-Times that this is the second time this has happened in a church run by Rev. William Killeen. 2^nd Church Run by Priest Ripped Off. Unfortunately, the Sun-Times article is less than clear in describing the second rip off. It refers to a business manager at another church pleading guilty to stealing a $100,000 from that church. The implication is that Killen headed that church, but the dates given don't sync with his service at Infant Jesus—there is overlap in the dates--suggesting that Killen was in two places at one time.

Killen may be dumb when it comes to financial controls, but he knows something about spending money. According to Houston and Esposito, Killen "spent $25,000 to remodel the rectory and install a wet bar." On top that he allegedly authorized renovations to the church despite the fact that an anonymous $1 million pledge fell through. Infant Jesus is in debt to the Chicago Archdiocese to the tune of $1.8 million. That is after the archdiocese forgave another $268,000 in debt.

By the way, it was an audit by the archdiocese that finally uncovered the missing funds. The audit was apparently in response to rumors.

If convicted, Herman could face up to 30 years in prison. The entire incident is a disgrace.

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