Church Finance Administration - CTCUMC

1 Central Texas Annual ConferenceOf The United Methodist ChurchChurch Finance &AdministrationEast & North District TrainingFebruary 21, 2016 Central Texas Annual ConferenceOf The United Methodist ChurchAgenda Authority & Secrecy Internal Controls Budgets & Reporting Tax Exempt Status Employment Taxes Tax Reporting Audits Checks & Balances Pastoral Compensation Accountable Reimbursement Accounts (ARP) Pastors Discretionary Accounts Apportionments Job Descriptions Financial Secretary Treasurer Chair/FinanceCommittee Record Retention Resources GCFA Apportioned fund DescriptionsCentral Texas Annual ConferenceOf The United Methodist ChurchWays We Might Be Helpful in Finance & Administration3 Clergy and lay benefits Insurance and retirement Creating a Church budget Church Finance internal controls Stewardship Ideas Financial PoliciesCentral Texas Annual ConferenceOf The United Methodist ChurchAuthority & Secrecy Per BoD ( )

2 , Pastor is CEO of Church "The pastor shall be the administrative officer and, as such, shall be an ex-officio member of all conference, boards, councils, commissions, committees, and task forces, unless otherwise restricted by the Discipline." Pastor is member of all committees except Trustees and SPRC As such, Pastor has full access to all information for committees and sub-committees including Stewardship BoD ( 722) requires meetings to be open as often as possible (except SPRC) Financial statements & accounts of all Church entities available to Church Council via annual audit Details of financial giving should be shared only with those that have a need to know Pastor Financial Secretary Sometimes members of the Finance Committee (to facilitate a capital campaign for example)4 InternalControls5 Central Texas Annual ConferenceOf The United Methodist ChurchInternal Control Protection of Your Church s Money6 Internal controls provide the following benefits.

3 Accountability Protects Church s assets Promotes accuracy of financial records Promotes confidence in givers Helps prevent fraud Central Texas Annual ConferenceOf The United Methodist ChurchInternal ControlProtection of Your Church s Money7 Three basic types of financial activitiesoAuthorization of transactionsoRecording of transactionsoCustody of assets Each of these activities should be performed by different unrelated individualsCentral Texas Annual ConferenceOf The United Methodist ChurchInternal ControlBest Practices8 Prepare accounting procedures manual Anyone who handles Church funds bonded or insured Bank statements reconciled monthly Detailed monthly reports reviewed by Finance committee Financial reports audited annuallyCentral Texas Annual ConferenceOf The United Methodist ChurchInternal ControlBest Practices -Receipts9 Two unrelated people always handle the offering Counting takes place in the Church office.

4 Never at home Use a cash count sheet to document how much money was collected After the deposit is made compare the bank receipt to the count sheet Central Texas Annual ConferenceOf The United Methodist ChurchInternal ControlBest Practices -Disbursements10 Individual writing checks should not sign checks Consider requiring two signatures on checks Use expense voucher to request payment Credit card policy Allowable Reimbursement Policy(of business expenses)Central Texas Annual ConferenceOf The United Methodist ChurchBudgets11 Central Texas Annual ConferenceOf The United Methodist ChurchBudgets What Are They?

5 Management tool Financial direction Expression of who you are as a congregation12 Central Texas Annual ConferenceOf The United Methodist ChurchBudgets Who Should Be Involved? Staff Stewardship Team Finance Team Trustees Ministry Teams SPRC13 Central Texas Annual ConferenceOf The United Methodist ChurchBudgets Where to Start? Vision of ministry/mission statement Total the pledges received Consider income from non-pledging donors Consider adjusting for unfulfilled pledges Include income from other sources Interest income Rentals14 Central Texas Annual ConferenceOf The United Methodist ChurchBudgets Items to Consider?

6 General and Administrative Expenses Pastor and staff salaries and benefits Utilities Building and workers compensation insurance Mortgage payment (if applicable) Conference and District Apportionments Property Insurance Expense Program Expenses Outreach Children s ministry Mission trip15 Central Texas Annual ConferenceOf The United Methodist ChurchBudgets Items to Consider? Maintenance reserve fund Roof HVAC Establish an emergency fund16 Central Texas Annual ConferenceOf The United Methodist ChurchHow Churches Spend Their MoneyBranaugh, Matthew (2014).

7 How Churches Spend Their Money. The Church Network Insight, Premier Issue, & WagesMinistries & SupportBuildingUtilitiesMaintenance/clea ningInternational mission supportDomestic mission supportOffice/administrationProperty liability insuranceDenominational contributionsCash reservesDebt (excluding mortgage)TravelOtherCentral Texas Annual ConferenceOf The United Methodist ChurchBudgets& Reporting Income: Tithes & offerings Fees from outside use of Church space fundraising Investment income Miscellaneous Expenses Accountable reimbursements Administrative expenses Apportionments Building maintenance & utilities Debt service Education Insurance Membership Outreach Program expenses Salaries & benefits Worship & Music Miscellaneous 18 Central Texas Annual ConferenceOf The United Methodist ChurchSample BudgetCalendar February thru December: Furnish Administrative Council & Committees with Budget vs.

8 Actual report with explanations of variances (at least quarterly) project amounts to year-end Determine actions needed to bring spending in line with Budget August/September: Request Committee Chairs to provide input for next year s Budget Obtain CTC: Apportionments, HealthFlex, Pension, CPP October: Compile & distribute draft budget to Administrative Council December / January: Revise as necessary & obtain Administrative Council Approval Communicate budget to congregation Budget does not require Charge Conference approval19 BudgetDetails20201620152015 Pre-BudgetBudget Actual2014 Budget2014 ActualSchoolSource Budget NotesIncomeI-1 Pledges-$ StewardshipI-2 Non Pledge Regulars- Fin.

9 SectI-3 Loose Plate- I-4 Christmas/Easter Offering- I-5 Facilty Rent- I-6a Preschool Facilities Donation- YesI-6b Preschool Insurance- YesI-7 fund raising Projects/Tag Sale- I-8 Designated Contributions- I-9 Misc, Other Income- I-10 Interest Income- I-11 Cell Tower Income- TrusteesSub-total-$ -$ -$ A AdministrationA-1 Administrative Salary-$ Yes SPRCA-2 Office Supplies- YesA-3 Office Equipment- YesA-4 Postage- A-5 Communications- A-5a Telephone - Church - A-5b Telephone - Parsonage- A-5c - Cable/Internet - Parsonage- A-5d - Other.

10 A-7a Church 's Share of FICA- A-8 Administration - A-9 Payment Desig. Contribution- A-11a - Workmans Comp- YesA-11b Insurance Property & Liability- YesA-11d Umbrella Policy- YesSub-total-$ -$ -$ First United Methodist Church2016 Budget WorksheetIncrease / DecreaseBudgetvs. Actual21 ACDEFYTDD eposits / Bills AdjustedVarianceActual Outstanding YTD Actual Budget (Fav / Unfav) CommentsIncomeI-1 PledgesI-2 Non Pledge RegularsI-3 Loose Plate / Visitor DonationsIncludes a $1,500 donation in JuneI-4 Christmas/Easter OfferingI-5 Facilty RentI-6a Preschool Facilities DonationI-6b Preschool InsuranceI-7 fund raising Projects/Tag SaleCancellation of fund - raising dinnerI-8 Designated ContributionsI-9 Misc, Other IncomeI-10 Interest IncomeI-11 Cell Tower IncomeSub-total-$ -$