¶ 258.4 There shall be a committee on finance, elected annually by the charge conference upon...
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Leading congregations to lead people to actively follow Jesus Christ. Click icon to add picture Rev. Kendall Waller Director of Finance & Administration
¶ 258.4 There shall be a committee on finance, elected annually by the charge conference upon recommendation by the committee on nominations and leadership
258.4 There shall be a committee on finance, elected annually
by the charge conference upon recommendation by the committee on
nominations and leadership development or from the floor, composed
of the chairperson; the pastor(s); a lay member of the annual
conference; the chairperson of the church council; the chairperson
or representative of the committee on pastor-parish relations; a
representative of the trustees to be selected by the trustees; the
chairperson of the ministry group on stewardship; the lay leader;
the financial secretary; the treasurer; the church business
administrator; and other members to be added as the charge
conference may determine. It is recommended that the chairperson of
the committee on finance shall be a member of the church council.
The financial secretary, treasurer, and church business
administrator, if paid employees, shall be members without vote.
The positions of treasurer and financial secretary should not be
combined and held by one person, and the persons holding these two
positions should not be immediate family members.
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o Budgeting and Management o Stewardship and Income o Reporting
and Communication o Audit and Internal Controls
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All financial askings to be included in the annual budget of
the local church shall be submitted to the committee on finance.
The committee on finance shall compile annually a complete budget
for the local church and submit it to the church council for review
and adoption. The committee on finance shall be charged with
responsibility for developing and implementing plans that will
raise sufficient income to meet the budget adopted by the church
council. It shall administer the funds received according to
instructions from the church council.
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The Pastoral Support Form is a very important document. It is
an official agreement between the church and the pastor.
Information reported on this form is used for several purposes: o
Setting pastoral compensation for the local church / charge. o
Reporting compensation to the General Board of Pension o Reporting
compensation to the Internal Revenue Service o Reporting
compensation to the Appointive Cabinet
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Where there is no stewardship ministry area, stewardship shall
be the responsibility of a subgroup of the committee on finance or
shall be assigned to a task group that shall report to the church
council. The committee shall carry out the church council's
directions in guiding the treasurer(s) and financial
secretary.
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o Have you prayed about it? o Does the Leadership Team tithe? o
Does the pastor tithe? o Is the program based on the givers need to
give or the churchs need to receive? o Can you draw a straight line
from each line item of your budget to your mission? o Do you talk
about stewardship all year? o Stewardship moments
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o www.moumethodist.org/stewardship
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o The importance of transparency o Reports for Church Council o
Reporting to the church o The committee shall carry out the church
council's directions in guiding the treasurer(s) and financial
secretary
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Tax Records Donors who make a contribution of $250 or more must
have a contemporaneous written acknowledgment from the donee
organization. This written document should include the churchs name
(perhaps on letterhead) and provide the following data: 1. The name
of the donor. 2. The date and amount of each contribution of $250
or more during the year. 3. A statement that no goods or services
were provided to the donor in exchange for the contribution. (an
exception, of course, is the intangible religious benefits provided
by the churchs ministry.) 4. A description and good faith estimate
of the value of any noncash property contributed.
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o www.gcah.org, under Ministry Resources, Local Church, Pastor
o This 60 page booklet offers answers to many common questions
about which records to keep and for how long.
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Some of the suggested retention periods are for legal reasons,
while others are based on practical considerations. You may want to
keep some records longer than the table suggests. 1. It is an
excellent idea for your organization to discuss and adopt a record
retention policy. The guidelines document gives you some
suggestions on items to be included in the policy and time periods
to be used. 2. When developing a record retention policy, it is
important to think about where those files will be kept, how secure
those files will be, and the conditions under which files will need
to be stored (heat and particularly dampness can be very
destructive to files).
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3. Some of the reasons to keep files and records include legal
requirements, potential relevance in future litigation, and the
needs of the organization, as well as historic importance. It goes
without saying that should there be threatened litigation or an
investigation on a certain subject matter, particular care should
be given that no file or document relating to that matter be
destroyed. 4. Tax returns and governmental reports affecting tax
liability should be kept permanently. However, most backup records,
such as receipts documenting income deductions need only be kept
for seven years. The Internal Revenue Service calls for a six-year
statute of limitations. The IRS has three years from the date of
when the income tax return is filed to question or audit it. If the
IRS can prove an omission of at least 25%of income, the time period
doubles to six years. Therefore, the seven-year period gives a
one-year cushion beyond that time limit. While most churches are
not required to file tax returns, these periods apply to any entity
that must file, as well as individual filers.
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5. Of particular importance is the retention of insurance
policies and related documents. From time to time, lawsuits are
brought which reach back many years. Therefore, it is important to
determine the policy in effect at the time that a claim arose.
Should those policies be missing, they can often be recreated by
contacting your broker or insurance company to establish
coverage.
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258.4 contd c) The committee on finance shall establish written
financial policies to document the internal controls of the local
church. The written financial policies should be reviewed for
adequacy and effectiveness annually by the committee on finance and
submitted as a report to the charge conference annually.
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We suggest the following resources may be helpful in developing
Internal Controls policies: a)Guidelines for Leading Your
Congregation 2009- 2012 Finance may be ordered from Cokesbury (ISBN
9780687648917 for $2.95). b)2009-2012 United Methodist Church
Financial Records Handbook may be ordered from Cokesbury (ISBN
978-0-687-65573-1. Internal policies, at a minimum, might include:
who collects, counts, records, and deposits all monies who is part
of the counting team (not less than two non-family members should
count and verify offerings (258.4a) distribution on contribution
records authorization process for purchases check signing policy
bank reconciliation reimbursement policy with documentation petty
cash disbursement/purposes/accounting
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258.4 contd a) The committee shall designate at least two
persons not of the immediate family residing in the same household
to count the offering. They shall work under the supervision of the
financial secretary. A record of all funds received shall be given
to the financial secretary and treasurer. Funds received shall be
deposited promptly in accordance with the procedures established by
the committee on finance. The financial secretary shall keep
records of the contributions and payments.
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258.4 contd d) The committee shall make provision for an annual
audit of the financial statements of the local church and all its
organizations and accounts 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
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o The audit may include: 1) a review of the cash and investment
reconciliations 2) interviews with the treasurer, financial
secretary, pastor(s), finance committee chair, business manager,
those who count offerings, church secretary, etc., with inquiries
regarding compliance with existing written financial policies and
procedures 3) a review of journal entries and authorized check
signers for each checking and investment account 4) other
procedures requested by the committee on finance.
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www.gcfa.org/audit
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moumethodist.org/forms/ Search Audit The committee shall make a
full and complete report to the annual charge conference.
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o The audit shall be performed by an audit committee composed
of persons unrelated to the persons listed in (2) above or by an
independent certified public accountant (CPA), accounting firm, or
equivalent.
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258.4 contd f) Contributions designated for specific causes and
objects shall be promptly forwarded according to the intent of the
donor and shall not be used for any other purpose. 11 g) After the
budget of the local church has been approved, additional
appropriations or changes in the budget must be approved by the
church council. h) The committee shall prepare annually a report to
the church council of all designated funds that separate from the
current expense budget. 11. See Judicial Council Decision 976.
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o Receives funds o Oversees counting o Keeps donor records
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o Keeps records o Prepares reports o Disburses funds
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o www.gcfa.org Departments & Services Legal services o
www.churchlawtodaystore.com Church & Clergy Tax Guide
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Everybody asks, so here it is
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o Apportionments are based solely on expenses reported on Table
II of the year end statistical reports, lines 53 through 62 minus
61A. o These lines represent the operating expenses of the church
and exclude expenses related to capital improvements, building
programs, and preschool programs.
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1. Average Qualified Expenses 2. Find Conference Total Expense
3. Determine the Decimal 4. Multiply by the Budget 5. Consider the
30% Limit
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o To calculate a churchs 2013 apportionments we average their
qualified expenses from the 2011, 2010 & 2009 year end
statistics for each church.
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Church No.Church Name 2009 Qualified Expenses 2010 Qualified
Expenses 2011 Qualified Expenses Three Year Average 12065Southwest
City$23,120$23,538$24,596$23,751 12066 Saint James UMC
(Joplin)$59,283$51,212$42,198$50,898 12067Saint Paul's
(Joplin)$726,911$734,657$771,399$744,322
12068Stella$25,659$32,649$30,325$29,544 12071Trinity
(Joplin)$3,900$3,400$3,700$3,667
12073Wanda$4,657$12,108$12,051$9,605
12074Washburn$12,911$13,867$11,500$12,759
12075Wheaton$37,791$39,971$37,930$38,564 12076Pathways
(Alba)$93,420$116,178$115,768$108,455 12081Schell
City$23,890$24,400$24,295$24,195 12083Plenitud UMC$0 $41,665$13,888
Conference Total$86,815,298$88,225,274$90,861,500$88,925,043
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o We then total all of these expenses for every church across
the conference.
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Church No.Church Name 2009 Qualified Expenses 2010 Qualified
Expenses 2011 Qualified Expenses Three Year Average 12065Southwest
City$23,120$23,538$24,596$23,751 12066 Saint James UMC
(Joplin)$59,283$51,212$42,198$50,898 12067Saint Paul's
(Joplin)$726,911$734,657$771,399$744,322
12068Stella$25,659$32,649$30,325$29,544 12071Trinity
(Joplin)$3,900$3,400$3,700$3,667
12073Wanda$4,657$12,108$12,051$9,605
12074Washburn$12,911$13,867$11,500$12,759
12075Wheaton$37,791$39,971$37,930$38,564 12076Pathways
(Alba)$93,420$116,178$115,768$108,455 12081Schell
City$23,890$24,400$24,295$24,195 12083Plenitud UMC$0 $41,665$13,888
Conference Total$86,815,298$88,225,274$90,861,500$88,925,043
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o Whatever portion of the total your church represents is your
decimal or the percentage of the apportionments total for which
your church is responsible.
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Church No.Church Name 2009 Qualified Expenses 2010 Qualified
Expenses 2011 Qualified Expenses Three Year Average 2013 Decimal
12065Southwest City$23,120$23,538$24,596$23,7510.00026709 12066
Saint James UMC (Joplin)$59,283$51,212$42,198$50,8980.00057237
12067Saint Paul's
(Joplin)$726,911$734,657$771,399$744,3220.00837022
12068Stella$25,659$32,649$30,325$29,5440.00033223 12071Trinity
(Joplin)$3,900$3,400$3,700$3,6670.00004124
12073Wanda$4,657$12,108$12,051$9,6050.00010801
12074Washburn$12,911$13,867$11,500$12,7590.00014348
12075Wheaton$37,791$39,971$37,930$38,5640.00043367 12076Pathways
(Alba)$93,420$116,178$115,768$108,4550.00121962 12081Schell
City$23,890$24,400$24,295$24,1950.00027208 12083Plenitud UMC$0
$41,665$13,8880.00015618 Conference Total $86,815,29 8 $88,225,27 4
$90,861,50 0$88,925,043100.0000000
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o Your decimal is then multiplied by the approved budget and we
get your apportionment.
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o There is one exception, no churchs apportionments may
increase or decrease by more than 30% in any given year.
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1. Average Qualified Expenses 2. Find Conference Total Expense
3. Determine the Decimal 4. Multiply by the Budget 5. Consider the
30% Limit
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o Local Church Spending relating to the Conference Total The
Conference Total spending has been increasing between 2% and 3% per
year. o The Conference Budget o Closed Churches o Please note that
the three year averaging of expenses will reduce the impact of any
one years variance.