Financial Controls in the Church
From Bill Minchin at the 2006 Troy, NY Boot Camp
- There needs to be intentionality about financial issues in the church
- Preaching the gospel does not make you exempt from financial mis-deeds
- Financial controls – process
- designed to provide reasonable assurance that a church’s business affairs are being handled appropriate
- adherence to God’s law and principes
- 2 major components
- Separation of Duties – separate physical handling of assets with responsibility to handle accounting
- Independent Verification – have two people involved in every function, especially counting cash and signing checks
Lessons Learned
- Counting and handling of income – 2 persons involved in all transactions
- All income goes through church account, not just tithe received in Sunday service. Eg. donations for food at membership class, money received at youth group car wash fundraiser
- Check signers should have no financial responsibilities
- Bank reconciliation done by other person
- Independent oversight by board or committee
- Who is asking the important questions?
-
- Are the mortgage payments being made on time and properly?
- Bank reconciliation – are records up to day? is it being done every month? Is it accurate?
- Has legal counsel been utilized in the last 6 months?
- Has the church received any threatening correspondence?
- Have there been any expenses over a certain limit?
- Provide user-friendly financial report to ministry leaders and congregation
- Get outside independent CPA audit
- Have procedures in written form
- Background checks and confidentiality agreements
- No secrets, but we’re a family – there are things that are wise to keep in the family
Process
- Create budget
- Vision-driven
- Create standardized worksheets and account codes
- Have volunteer counters
- Minimum 2
- Records on form
- Business office enters numbers into accounting software
- All income!
- Expenses
- Tries to give priority to personal reimbursements
- Large checks require elder signature
- Bank reconciliation
- Physically get mailed to elder’s home
- Elder reviews bank reconciliation
- Monthly reports provided to church and ministry heads
- Quarterly audits