POLICE are investigating allegations of fraud at a Port Seton church.
An audit uncovered that more than £17,500 of unauthorised payments were made during one year from funds at Chalmers Memorial Church.
Auditors were asked to investigate after the county church was unable to pay its annual Ministries and Mission contribution to the Church of Scotland.
A full audit revealed the congregation had no reserves left in their general fund and raised questions about thousands of pounds which had been paid out of church funds without proper authority.
An independent examiner called in by the church, who compiled a report for charity regulator OSCR, reported: “There have been unauthorised payments made from the charity [Chalmers Memorial Church] and it has not been possible to obtain full financial records of the charity.
“As a result, the nature of some income and expenditure is unknown.”
The accounts for the financial year of 2015, which are required to be lodged with OSCR, revealed £17,543 of unauthorised payments.
It also said that in the previous year a further £10,775 was also paid without any authority.
And this year’s accounts also report unauthorised payments of £9,757.
The church received just over £94,000 in donations through 2015, with an additional £10,000 raised through rental and other income.
The vast majority of money spent by the church over the year was on charitable activities which cost £86,578; however, the general fund, which holds money which is unrestricted in its use, was £7,171 in debt at the end of the year.
The congregation of the church has been informed of the financial irregularities, with recent newsletters referencing the problems.
In an Easter message to the congregation, interim moderator, the Rev Neil Dougall said: “Thank you for the patience and trust you have shown in your elders over the last six months as they have dealt with some difficult issues. It is great that we are now moving on – and doing so together.”
And in February’s newsletter there was an appeal for help fundraising to help the church with its “financial situation”.
Last week, the Kirk Session of the church asked Lothian Presbytery for permission, which was granted, to approach the General Trustees for a grant and loan to assist in upgrading its current manse, or allow them to sell it and buy a suitable alternative.
The Church of Scotland said the request was not connected to the financial irregularities and was standard when a congregation had been without a minister for a period of time.
Lothian Presbytery reported in February that “financial irregularities” found in a full audit of Chalmers Memorial Church’s accounts had been reported to the police, the Church of Scotland’s head offices and charity regulator OSCR.
It said the irregularities had “led to the congregation having no reserves in their general account and outstanding payments to Ministries and Mission which the congregation were unable to make”.
A Police Scotland spokesman said: “Police in East Lothian are investigating following a report of fraud in Cockenzie.
“The matter was reported in September 2016 and inquiries are continuing.”
Congregations contribute a percentage of their annual income to Ministries and Mission each year to cover the cost of employees such as ministers and deacons, as well as Church of Scotland projects at home and abroad.
Lothian Presbytery were told that the outstanding payments due from Chalmers Memorial Church for 2015 and 2016 amounted to £29,668. The presbytery agreed to pay the outstanding amount from those two years and its convenor moved to “encourage the elders and office-bearers to focus on developing the life, worship and witness of the congregation as their main concern and not to regard this sum as a debt to be repaid”.
The church has been without a permanent minister since the Rev Kristina Herbold Ross moved to a new post at the Gyle Shopping Centre, Edinburgh, in May last year.
Lothian Presbytery said that paying the outstanding money would allow the church to continue its search for a new minister without the burden of the debt.
A Church of Scotland spokesperson said: “On examination, the accounts of Chalmers Memorial were found to have discrepancies. A police report was made and an investigation is under way.”