Treasurer’s and Finance Committee Budgeting and Financial Statements

1. Treasurer’s and Finance Committee Budgeting and Financial Statements

2. WHERE IS FINANCE MINISTRY’S ROLE IN THE CYCLE OF DISCIPLESHIP? Reach Out & Receive Relate People To God Making Disciples Send Forth to Live Transformed & Transforming Lives Nurture & Strengthen In the Christian Faith

3. WHAT ARE THE DISTINCTIVE CHARACTERISTICS OF FINANCIALLY VITAL CONGREGATIONS? • Financial Transparency – Purposefully cultivating a culture of openness and transparency by a) sharing clear, understandable reports, b) implementing strong internal controls, c) providing an annual audit of the financial reports • Missional Budget and Fundraising – Moving beyond the survival mind set to think missional about budgeting. Facilitating the congregation-wide activity of discerning, planning, and budgeting for God’s mission. • Best Practices – Dealing with risk, laws, regulations, restricted donations and gifts and apportionments.

4. UNDERSTANDING THEOLOGICAL FOUNDATIONS The Bible discusses money within 3 basic categories: • Money is a blessing from God • Those who have been blessed by God are expected to care for those in need • Money is understood as a potential idol and a force of disruption against a person’s ability to love God and neighbor. John Wesley’s most famous words to early Methodists on money: ..To gain, save, and give all that you can.. Vital and effective Financial Leaders do not primarily understand themselves as the “business end” of the church. They can play a key part to advance the understanding of stewardship beyond fundraising to “pay the church bills”.

5. WHO IS THE COMMITTEE ON FINANCE? • Chairperson • Pastor • Lay Member of Annual Conference • Lay Leader • Chairperson or Representative of SPPRC • Financial Secretary • Treasurer • Others, at large as determined by Nominating Committee and voted at Charge Conference

6. The ministry of the committee on finance is to nurture the financial vitality of the congregation. This is a comprehensive assignment that encompasses a variety of responsibilities, all of which are necessary if the congregation is to accomplishits vision for ministry.

7. RESPONSIBILITIES OF COMMITTEE • oversee stewardship, • compile a budget annually, • raise sufficient income to meet the budget, • administer funds received by the church, • count and deposit the offering • disburse funds • establish internal control policies,

8. RESPONSIBILITIES OF COMMITTEE - CONTINUED • review and report annually on the adequacy and effectiveness of internal controls • provide for an annual audit of the church financial statements, • report to the District Office on the audit, • recommend proper depositories for church funds, • use contributions in accordance with donors’ intent, • report all designated funds that are separate from the church budget.

9. KEY FINANCIAL ROLES There are three key roles within the church • Treasurer • Financial Secretary • Chairperson of the Committee on Finance These 3 key positions work very closely with the Pastor also. Clear communication is needed between all these individuals.

10. TREASURER RESPONSIBILITIES The Treasurer of the Church has the unique responsibility of carrying out most of the financial decisions made by the committee on Finance. The Discipline charges you with broad responsibility in 3 general areas: • Fund Disbursement – The way you pay the bills of the church will either build up or tear down the trust of those who give it to you in the Church. Careful record keeping is key • Reporting – Regular, monthly is recommended, reporting of all receipts and disbursements that flow through the books is one of the most important responsibilities. • Remittance to the Conference Treasurer and District office – Promptly remitting the connectional giving in a timely manner is reflective of the financial vitality and overall health of the church.

11. FINANCIAL SECRETARY RESPONSIBILITIES The position of Financial Secretary is one of the most important and sensitive offices in the Church. The information you compile about contributions to the Church is important to both donors and to the Church. The Discipline charges this position with broad responsibility in three general areas: • Supervision of the offering counts • Prompt deposits of cash from offerings and giving a record of each deposit to the Treasurer • Keeping records of contributions and providing giving statements, quarterly recommended, to each donor; with an annual statement also being given for the use with tax returns.

12. CHAIRPERSON OF THE COMMITTEE ON FINANCE RESPONSIBILITIES This position has the broad responsibility of leading the financial direction of the Church. The Discipline charges you and the committee with oversight on the following: • compile an annual budget; • develop and implement plans to raise sufficient income to meet the budget; • administer the funds received according to instructions from the church council; • guide the treasurer and financial secretary by following directions established by the church council; • recruit and assign counters to work with the financial secretary in counting the offering;

13. CHAIRPERSON OF THE COMMITTEE ON FINANCE RESPONSIBILITIES - CONTINUED • provide for bonding for the treasurer (and others dealing with cash); • establish written financial policies to document internal controls; • review the adequacy and effectiveness of internal control policies annually; • make provisions for an annual audit of the financial statements of the church and all its organizations and accounts; • Provide Audit Report and Supplement to District Office • recommend to the church council proper depositories for the church’s funds; • use contributions as donors intend; • report to the church council annually on all designated funds that are separate from the operating budget.

14. WHAT NOT TO DO • It is specifically stipulated in the Book of Discipline that the Treasurer and Financial Secretary should not be the same person. • The Treasurer, Financial Secretary nor the Finance Chair should serve on an Internal Audit Committee. Neither should any family members of these appointed positions. • Approve all expenditures. Use of a voucher system where Ministry-Committee Heads and/or the Pastor signs for approval of expenditures is a best practice. • While the Treasurer and Financial Secretary may be authorized to do any one of these key tasks 1) approving payments, 2) signing checks, or 3) reconciling accounts; no one person should be authorized to do more than one. That segregation of duties is important to not only protect the Church, but also protect the individuals and their reputations.

15. ANNUAL AUDITS The Discipline assigns responsibility for scheduling and recruiting a team to conduct the annual audit of financial records to the committee on finance. The goal of an audit is not simply to comply with the requirements of the Discipline, but to increase the financial transparency of the church, which is a critical element of financial vitality. What exactly is required for a local church audit? The Discipline states, “A local church audit is defined as an independent evaluation of the financial reports and records and the internal controls of the local church by a qualified person or persons” (¶258.4d). “Conducting an audit is not a symbol of distrust. It is a mark of responsibility. It is good stewardship demonstrated for all to see. It is a message to local church donors that you care about their gifts”

16. COMMITTEE ON FINANCE ANNUAL CHECKLIST Below is a checklist for Finance Committees to use to review their procedures to be sure that they are in compliance with the Book of Discipline and Oklahoma Conference rules. • Has the Chair of the Finance Committee scheduled regular meetings of the Finance Committee for the year? • Have the following positions been filled and approved with non-related individuals? • Treasurer • Financial Secretary • Counting Committee • Have the internal accounting control policies been reviewed and approved for the current year?

17. COMMITTEE ON FINANCE ANNUAL CHECKLIST Checklist Continued • Are the internal accounting control polices being followed? • Have policies concerning designated giving been reviewed and followed? • Have plans been made to raise sufficient funds to support the budget? • Has the audit committee been selected and approved?

18. COMMITTEE ON FINANCE ANNUAL CHECKLIST Internal Controls • Who other than the Treasurer is doing the checkbook reconciliation? • Is the checkbook reconciliation being done monthly? • Are all the checking accounts being reconciled? • Who can sign checks? • Are complete finance reports, including revenue and expenses and a balance sheet, being printed and distributed to church leadership on a monthly basis? • Who verifies that the deposits match the counting committee’s records and what is being posted to contribution records?

19. OTHER - MISCELLANEOUS • Computer Back-Up • It has been known for computers to crash, churches to have fires, and tornadoes to blow churches away in Oklahoma and Kansas • Computer files need to be backed up on a regular basis and kept off premises. • Hard copies of some data should be kept in a safe place. • Copies of contribution checks • Copies of contribution posting records and deposit slips and counting committee records should be stapled together and kept for 5-7 years.