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St. Paul's, Manhattan, reaches agreement on theft of church funds

Diocese of Kansas report

On Feb. 2, a civil settlement was filed in Riley County, Kan., District Court between St. Paul’s Episcopal Church, Manhattan, and a former treasurer of the parish. In this binding legal judgment, the former treasurer admitted he had misappropriated more than $182,000 from the parish and agreed to make full restitution.

The settlement agreement approved by the court provides for payment of the full amount over time, together with interest at the rate of 7 percent on the unpaid balance.

The settlement agreement subsequently has been incorporated in an agreement between the former treasurer and Riley County Attorney Barry Wilkerson that was signed in early April. The County Attorney has determined that criminal prosecution for the embezzlement will be stayed pending performance of the settlement agreement with the parish.

The former treasurer admitted the crime of embezzlement, and he agreed to waive the statute of limitations, so the crime may be prosecuted in the future if the settlement agreement is not fulfilled.

Bishop Dean E. Wolfe of the Episcopal Diocese of Kansas has been informed of this matter as it has progressed and has agreed that the legal resolution of this case is an appropriate response.

The embezzlement was uncovered in September 2006 through an internal parish audit. The former treasurer then was relieved of his duties, and parish officials, with assistance from the diocese, undertook a detailed audit reconstruction of parish funds since 2002. This audit determined the extent of the theft.

Bishop Wolfe said he sees this as a fair and appropriate judgment against the former treasurer that will help the parish recover its funds to use for ministry in the Manhattan community.

“This settlement is about restitution and not retribution,” he said. “It points to the possibility of redemption that is at the heart of our Christian faith.” He also said that while trust is part of the nature of a Christian community, those who violate that trust through embezzlement of parish funds must be held accountable.

Bishop Wolfe also said the diocese soon will be announcing stricter guidelines for parish audits and internal financial controls to better protect parishes from similar situations.

He noted that while current procedures uncovered this theft, more can and will be done to protect the financial assets of congregations. “This situation could have occurred in any parish in our diocese, and I am proud of the way the rector and vestry of St. Paul’s have responded to this challenging situation,” Bishop Wolfe said.