Financial Handbook for Congregations 2017

1 Financial Handbook for Congregations2017 The united church of CanadaL glise Unie du CanadaFinancial Handbook 2017 Copyright 2017 The united church of CanadaL glise Unie du CanadaThe content of this resource is licensed under the Creative Commons Attribution Non-commercial No Derivatives (by-nc-nd) Licence. To view a copy of this licence, visit Any copy must include the united church copyright notice and the Creative Commons licence. Care has been taken to trace ownership of copyright material contained in this text. The publisher will gratefully accept any information that will enable it to rectify any reference or credit in subsequent printings. The united church of canada L glise Unie du canada 3250 Bloor St. West, Suite 300 Toronto, ON canada M8X 2Y4 1-800-268-3781 : Ian Ball, Graphics and PrintSupported by Mission & ServiceMISSION & SERVICE 160057 Financial Handbook for Congregations 2017 iContents1. What s New .. What s New for 2017 ..12. Introduction .. Contacts and Questions.

2 The united church of canada .. Ministry and Employment .. Resources Used in Compiling This Guide ..63. Financial Management for Charities .. Introduction .. The Treasurer .. Duties of the Treasurer .. Accounting Practices .. Accounting Procedures Questionnaire .. Supplement ..17A. Resources for Financial Management ..17B. Accounting Duties Checklist ..18C. Sample Cash Receipts Journal ..20D. Sample Cash Disbursements Journal ..21E. Sample Balance Sheet ..22F. Sample Statement of Receipts and Disbursements ..23G. Sample Depreciation Schedules ..24H. HST Overview for Treasurers ..254. Paying Staff .. Payroll Service (ADP) Policy .. Processing Payroll for Lay Employees .. Steps to Ensure Payroll Success .. ADP Summary of Services .. ADP Authorized Contact .. Payroll Frequency Option .. Payroll Processing Option .. Statutory Deductions ..29ii The united church of CanadaCONTENTS Personal Tax Credits Return (TD1) ..29 Employment Insurance Premium Rate Reduction.

3 29 Election to Stop Contributing to CPP ..30 Quebec: CSST .. Payroll Reports .. Record of Employment .. Year-End Tax Forms ..31 Ministry Units in Quebec .. ADP Service Fees/Fee Increases .. ADP Payroll Forms ..32 Basic payroll data (pages 1 and 2) ..33 Benefits Addendum - for members of the united church benefits plans ..33 Clergy Residence Deduction - information page ..33 Maternity/Parental Leave Top-up Addendum.. 33 Quick Reference Sheet ..33 ADP fax cover page .. ADP Earnings and Deduction Codes ( united church Template) .. Amalgamations and Closures .. united church Pension and Benefits Plans .. Pensionable Earnings .. Pension Plan .. Core Benefits Plan .. Optional Benefits Plan .. Setting Up Pension and Benefit Payroll Deductions .. Core Benefits Deductions .. Optional Benefits Deductions .. Pension and Benefits: Non-Standard Employment Situations .. Concurrent Employment .. Hiatus or Summer Closure .. Pension and Benefits: Employment Leaves .. Maternity, Adoption, and Parental Leaves.

4 Leave of Absence .. Pension and Benefits: Short-Term Disability (Restorative Care Plan) .. Pension and Benefits: Death of Employee ..40 Financial Handbook for Congregations 2017 Pension and Benefits: Employment Ends with Ministry Unit .. Pension and Benefits: Minister in Search of a Call/Appointment .. Compensation for Ministry Personnel .. Annual Cost-of-Living Increases .. New Compensation Model .. Cost-of-Living Groups .. Occupancy of Manse .. Housing Allowance .. Manse/Housing Allowance (20% rule) .. Clergy Residence Deduction .. Weddings and Funerals .. Visiting Ministry Personnel .. Reimbursements .. Continuing Education and Learning Resources .. Telephone, Cell Phone, Computer .. Travel.. Taxable Allowance or Expense? .. Claiming Other Employment Expenses (T2200) .. Moving Costs.. Settlement Costs for Candidates for the Order of Ministry .. Ministry Personnel: Vacation and Leaves .. Study Leave .. Sabbatical.

5 Lay Employees: Employment Guidelines .. Employee vs. Self-Employed ..515. Funding God s Mission: Generating Income .. It Starts with Stewardship .. Inspire, Ask, Thank .. Funds for Your Congregational Work .. Pre-Authorized Remittance .. (Legacy) Planned Giving .. Restricted Funds .. Memorial Funds .. Benevolent Fund .. Designated Gifts ..67iv The united church of Gifts of Property and Gifts in Kind.. Gifts of Stock, Mutual Funds, and Bonds .. Gifts in Kind .. Gifts to Charities .. Split Receipting .. Funds for The united church of canada .. Emergency Giving .. A Gift Fund with The united church of canada Foundation .. Other Revenue Sources .. Rental Income .. Concerts .. Congregation Dinners .. Congregation Outings .. Emerging Revenue Generation Ideas and New Concepts .. Government Grants and Loans .. united church Loan and Grant Programs ..84 Sample Letter of Good Standing .. united church Foundation Grant Programs .. Seeds of Hope Granting Program.

6 Scholarships and Academic Awards .. Innovative Ministry .. New Ministries Fund .. Aboriginal Ministry Funds .. Youth and Young Adult Programming .. Regional Grants .. Diakonia Grants .. CRA Reference Guides ..916. Good Management Practices .. Managing Expenses ..93 Petty Cash ..93 Cheques .. Internal Controls .. Protecting Cash .. Segregating Duties .. Misappropriation of Funds ..95 Financial Handbook for Congregations 2017 What Is a church Audit or Independent Review? .. The Independent Review .. The Treasurer s Role in the Audit or Independent Review .. Audits Are Good Stewardship .. Annual Statistical and Information Forms .. Music/Licensing Fees: Check Whether They Apply to You .. SOCAN (Society of Composers, Authors and Music Publishers of canada ) .. Copying or Projecting Hymns .. Using Modern Technology and Software .. Data Integrity and Security .. Purchasing Equipment .. Who Can Use the Computer? .. Maintenance.

7 E-Mail and Internet .. Record Retention .. Record Retention Checklist .. Management Checklist ..1087. Asset Management: Property.. church Property .. Liability Insurance .. Use of the church Building by Other Organizations .. Preventing Arson in Churches and Places of Worship .. Have Adequate Insurance .. UCC Protect: General Insurance Plan for Congregations .. Umbrella Directors and Officers Coverage for All Congregations .. Investments .. Ethical Investing ..1138. Maintaining Charitable Status .. File a T3010 Registered Charity Information Return .. Items to Note on the T3010 Return .. How to Amend the T3010 Return .. Accumulation of Property for a Specific Purpose .. Issue Charitable Tax Receipts .. What to Include in Receipts ..129vi The united church of When Not to Issue Receipts .. Timing of Donations Received and Issuing Receipts .. Issuing T4 Annual Returns .. Disbursement Quota .. What Is the Disbursement Quota (DQ)? .. What s New with the DQ?

8 Public Benefit .. Limit Gifts of the Congregation s Money .. Control Extent of Related and Unrelated Business.. Related Business .. Unrelated Business .. church Business Partnerships .. Limit Political Activity .. Charitable Registration .. Why Would a Congregation Want It? .. Getting and Keeping Charitable Status .. What You Should Know about Re-registration ..142 Form T2050 .. How Are Charities Distinct? .. Churches as Charities: Do They Provide Public Benefit? .. Amalgamations, Mergers, and Consolidations .. Donations of Items of a Speculative Value .. CRA Forms and Reference Guides ..151A. Getting Charitable Status ..151B. Operating Day to Day ..151C. Keeping Charitable Status ..152D. Charitable Organization Reporting ..152E. Top 10 CRA Compliance Issues ..1539. Paying Taxes .. Taxing church Income: We Are Exempt .. Property Tax .. What Taxes? .. On What? .. For What? .. Complying with Property Tax ..160 Financial Handbook for Congregations 2017 Taxes on Transactions (PST, GST, HST, QST).

9 Paying Transaction Taxes .. Changes to the Goods and Services Tax .. Registering for GST Purposes .. Revenues and Commercial Activities .. Filing .. CRA GST References and Forms ..17010. Refugee Sponsorship .. Sponsoring Refugees: A Charitable Act .. Basic Commitment .. Ensuring Charitable Status of Donations .. Trust Funds .. Sponsor s Financial Obligations .. Privately Sponsored Refugees Financial Obligations ..17311. Congregations and Overseas Mission ..17512. Frequently Asked Questions .. Charitable Giving and Congregation s Work .. Congregation s Income .. Financial Management .. Getting Audited ..18213. Glossary .. Terms Specific to The united church of canada .. Financial and Legal Terms ..185viii The united church of CanadaCONTENTSF inancial Handbook for Congregations 2017 11. What s What s New for 2017 Virtually all forms and information you need today are online and often available as fillable forms. This Handbook does not attempt to maintain the most current Web links or present data that changes regularly.

10 A church treasurer should bookmark at least a few key pages at and also with CRA Charities offer a number of how-to webinars and videos at are a lot of changes with the canada Revenue Agency (CRA). The CRA has made major improvements to their website and made information much easier to New T3010 One area of increased danger is in the timing of revocation of charitable status due to late filing of the T3010. There used to be more latitude. Now the CRA notification process is fully automated, and revocation occurs immediately after the stated deadline. A $500 fine/fee is now routinely charged for re-registration. The most important thing a treasurer can do to protect the charitable status of their congregation is to file the annual return on a timely basis. This should also be a routine annual status reporting item to the church board. AuditsOf course, more audits are being done every year, so have your books in order and be prepared. Why does the CRA audit charities? The CRA conducts audits to ensure compliance with the Income Tax Act and regulations relating to charity must comply with the requirements of the Income Tax Act.