- 1. MaintainingFinancialAccountabilityand Integrity July 6, 2011
Tommy Greer, CPA Blackburn, Childers &Steagall, CPAs and
Consultants
2. One size doesnt fit all,some principles do. 3. Whats the
Purpose of the Organization? We Are Provided Resources So We
CanChurch Love God, Love Others (Greatest Commandment) Reach Others
for Christ (Fishers of Men) Equip Gods People to Do The Above Make
disciples who make disciples (Ephesians 4:12) Provide Financially
for our Teachers/Leaders(1 Timothy 5:17-18 & 1 Corinth. 9:8-18)
4. Not For Profit Accounting Overview Net Assets Unrestricted
Temporarily Restricted Permanently Restricted DONOR INTENT 5.
Restricted Contributions or Designated Giving Donor-imposed
restrictions as to use or time Gifts for building programs,
specific program services or projects, or endowments will be
recorded as a restricted contribution. Policy on soliciting,
accepting and/or specialfundraisers Pledges - To Record or Not To
Record? 6. Train, Train, and then Train Some More 7. Train, Train,
and then Train Some More 8. Board Governance &Management - A
Big Deal 9. #10 on IRSs Dirty Dozen Tax Scams was Abuse of
Charitable Organizations and DeductionsBishopEddie Long "My goal is
to help improve accountability and good governance so tax-exempt
groups maintain public confidence in their operations. to spark
discussions surrounding transparency and accountability among all
types of churches and religious organizations.Senator Charles
Grassley of IowaGrassley Jan 2011 10. Governance Board / Elders
StaffGood Stewardship Finance BodyTeam 11. With Finances this
starts with The Finance CommitteeYour Finance Team!13 12. Best Team
13. Best team to manage finances?GODs Finances! 15 14. Best Team
15. Attributes and Responsibilitiesof a Finance Committee Member
Active(meet regularly) & Knowledgeable(of non-profit/church
operations) Committed, loyal and puts best interests of entity
first Review and approve significant finance decisions Assist staff
in strategic planning regarding Finances Leads comprehensive Budget
process from beginning toend Monitors results as a control but also
to ensure financialsuccess Assists in assuring proper controls and
oversight are inplace Fill knowledge gaps as needed / resource for
staff Helps plan for Stewardship Training 16. Finance Actively
EngagedBoard /Elders Finance PurposeStaffof Org.Team Body 17. Fraud
in the Church? No Way !!! 18. Fraud in the Church June 9, 2011 19.
Should my Organization have an Audit? 20. Internal
ControlsBudgeting / Monitoring proceduresOther Internal controlsIf
necessary Agreed Upon Proceduresperformed by CPA or someone
elseoutside the organization 21. Budgeting Controls Usually cash
basis, important to budget for capital improvements, debt
&reserves Usually prepared based on prior years results, or
zero based(start fromscratch). Participation by department heads
and others is essential Approval process with buy in along the way.
Monitoring-the budget should be compared to actual results on a
periodic basisby Staff and Finance, usually monthly. Unexplained
variances should beexamined. Cost/benefit should always be
considered in developing the budget processgiven the resources,
size and complexity of the organization. Finance provides
oversight, not necessarily decide specifically how money willbe
spent - set guardrails 22. Budgeting 2012June 2011 FinanceSet
Revenue Elders Approve Nov. 2011 ApprovesExpectation BudgetBudget
Finance worksCongregationCommunicate with Staff toApprovesDec. 2011
Balance Budget BudgetStaff/Ministries Finance Finance/Staffprepare
1compiles initial Monitor Budget All 2012pagersBudgetMonthly 23.
Budgeting-StaffInvolvement Staff/Ministries prepare 1 pagers 24.
Budgeting 2012June 2011 FinanceSet Revenue Elders Approve Nov. 2011
ApprovesExpectation BudgetBudget Finance
worksCongregationCommunicate with Staff toApprovesDec. 2011 Balance
Budget BudgetStaff/Ministries Finance Finance/Staffprepare
1compiles initial Monitor Budget All 2012pagersBudgetMonthly 25.
Compilation of initialBudgeting Budget 26. Budgeting 2012June 2011
FinanceSet Revenue Elders Approve Nov. 2011 ApprovesExpectation
BudgetBudget Finance worksCongregationCommunicate with Staff
toApprovesDec. 2011 Balance Budget BudgetStaff/Ministries Finance
Finance/Staffprepare 1compiles initial Monitor Budget All
2012pagersBudgetMonthly 27. Budgeting-StaffInvolvementCongregation
ApprovesBudget 28. Budgeting 2012June 2011 FinanceSet Revenue
Elders Approve Nov. 2011 ApprovesExpectation BudgetBudget Finance
worksCongregationCommunicate with Staff toApprovesDec. 2011 Balance
Budget BudgetStaff/Ministries Finance Finance/Staffprepare
1compiles initial Monitor Budget All 2012pagersBudgetMonthly 29.
Monitoring of Giving to Budget 30. Budgeting 2012June 2011
FinanceSet Revenue Elders Approve Nov. 2011 ApprovesExpectation
BudgetBudget Finance worksCongregationCommunicate with Staff
toApprovesDec. 2011 Balance Budget BudgetStaff/Ministries Finance
Finance/Staffprepare 1compiles initial Monitor Budget All
2012pagersBudgetMonthly 31. BenchmarkingGrant Thornton Board
Governance Survey for Nonprofits 32. Benchmarking ECFA Best
PracticesECFA has developed a series of best practices
whichencourage organizations to strive for even higherlevels of
excellence.ECFA Best Practices (PDF)ECFA Best Practices -
customized for churches (PDF) 33. Other Internal Controls All cash
received is deposited daily and all deposits require
participationby at least two persons. Cash disbursements are
permitted only by check and never made out ofofferings or other
cash receipts. Checks are prepared only when approved supporting
documentation isreceived. Reconciled Bank Statements and Debt
Statements are reviewed monthly. Donor records are maintained and
reconciled to financial statements. Individual receipts or
statements are mailed to donors. Monthly financial statements are
prepared timely for review by financecommittee. 34. Basic
Accounting Records to be Maintained Good Accounting Software (FCC
Shelby) Bank Accounts and Timely Reconciliations to GL not just
checkbook Detail Listing of Property and Equipment Inventory of
salable products Accounts payable detail listing Debt schedules and
related statements from lender Detail gift/donations report Pledges
receivable detail report Employees expense report 35. Agreed Upon
ProceduresContributions:Mail confirmation to donors representing
contributions amounts of $5,000 or morefor the year ended December
31, 2010.On a test basis, weekly collection sheets will be traced
to the bank statements andreviewed for completeness, authorized
signatures, mathematical accuracy, andtimeliness of deposit.On a
test basis, individual contributions of $500 or more will be traced
from theweekly contribution reports to the original contribution
envelope.The year-to-date contribution listing will be footed and
compared to receiptsposted to the general ledger.Distributions:On a
test basis, individual cash disbursements will be reviewed for
properapproval, support, and classification. 36. Transparency Full
Disclosure - we have nothing to hide! 37. Transparency thru our
Websites Elevation Church Charlotte, NC 2010 Annual Report 38.
Elevation Church - Charlotte, NC 2010 Annual Report 39. Special Tax
Issues Donor giving statements/receipts must be prepared and
distributed. Compensation of ministers Income tax withholding-not
required but probably should(if not estimated taxpayments) Entitled
to housing or parsonage allowance Not subject to FICA or Medicare;
subject to SE Exempt from SE tax if Form 4361 is filed during first
two years Employee business expenses through accountable plan
Excess benefit transactions & private inurement Prohibited
lobbying and political activity Form 990 Unrelated business income
tax 40. Compensation of MinistersStaff - Sample W-2 41.
Compensation of MinistersMinister - Sample W-2 42. -Federal church
reportingrequirements-Charitable /Designated contributions-Business
expense reimbursement-Tax changes & Tax liability
reduction-Clergy retirement plans www.YourChurchResources.c om
$39.95 Book or CD 43. Current Issues to Consider Paperless Cloud
Software Use of Portals TV/Radio vs. Internet opportunities
Dashboard Reporting Endowments When was your last Long Range Plan
done? 44. E-GivingOpportunitiesAuto bank transfersDebit CardsCredit
CardsFinancialreportingon website 45. Outreach / Missions 46.
Current Issues to Consider Down economy or slow to recover economy
Contributions while Demand for Programs Membership Increasing or
Decreasing Group over age 65 to increase 35% over nextfew
years(attendance up? Planned giving?) Financially dependent on few
major donors 47. Best Practices Finance Committee Active &
Knowledgeable Good accounting and internal control systems
Comprehensive Budget process from beginning toend Timely reporting,
monitoring and transparency Invests in training & technology
Stewardship training 48. Weaknesses Weve Noticed Little or no
oversight by a Qualified Finance Committee orBoard Lack of Internal
controls especially separation of duties Payroll properly
accounting for ordained ministers wages Understanding of restricted
funds, net assets & related donorrecords Support or
documentation for disbursements before paid Level of Accounting
knowledge by staff due to lack of training 49. In the End.
Successful Corporate Stewardship is based on: An understanding that
it all belongs to God, A foundation of management integrity, Good
accounting and internal control systems Investing in training &
technology Budgeting, reporting, monitoring and transparency
Persons charged with governance Planning for the Future.. 50. Other
Questions? Email Tommy Greer: [email protected] Visit -
www.BCScpa.com Register for free newsletter
http://www.linkedin.com/in/tommygreercpa Tommy Greer, CPA
Blackburn, Childers & Steagall, PLC 801B Sunset Drive Johnson
City, TN 37604 423.282.4511 51. Tommy Greer, CPAManaging
PartnerBlackburn, Childers & Steagall,CPAs and
ConsultantsSpecializing in:Management, Planning, Budgeting and
Profitability ConsultingNon-Profit EntitiesColleges &
UniversitiesEducation and Experience: BCS Partner since 1994 Senior
Accountant -International Accounting Firm-KPMG Peat Marwick Former
IRS Revenue Agent Degree from East Tennessee State
UniversityProfessional and Civic Activities: First Christian Church
- Elder, Finance Committee, Long Range Planning, College Ministry
Appalachian Christian Camp - Long Range Planning Milligan College
Presidents Council ETSU Accountancy Advisory Board Regional
Economic Development Alliance Board The Business Journal Advisory
Board 2006 Leader in Christian Service- Standard
Publishing/Milligan College Past President of the Appalachian
Chapter of the TN Society of CPAs 40 Under 40 Recipient 1993
