ST PETERS CONGREGATION’S FINANCE POLICY AND PROCEDURES

ST PETER FINANCE POLICY Page 1

ST PETERS CONGREGATION’S FINANCE POLICY AND PROCEDURES

1. PURPOSE OF THE POLICY

1.1. This Finance policy is aimed at providing a regulatory framework for the control of income and expenditure in accordance with the ELCSA NT Church wide Constitution and Finance Policy. Through this policy, the Congregation commits itself to handle its finances in a way that is sustainable and consistent with the word of God. All finances within the Congregation belong to God’s mission and shall be used for God’s mission only. This Financial Policy is aimed at providing a regulatory framework for income and expenditure controls in terms of which the revenue structure of the congregation shall be determined.

1.1.1. Efficient, satisfactory and transparent administration of income and

expenditure shall occur for the benefit of the Congregation.

1.1.2. Financial viability and sustainability of the Congregation shall be obtained.

1.2. The policy also provides general statements of direction and purpose that allow users to exercise good judgment in the daily operation of the Congregation and promote the efficient use of resources in the Congregation. The Congregation further commits itself to comply with the generally accepted financial principles.

2. DEFINITIONS

2.1. All terms derived from ELCSA NT Constitution and applied in this policy shall

carry the same meaning as assigned to them by the constitution of ELCSA NT

unless otherwise determined.

2.2. Any noun in singular also denotes plurality of it, any reference to a particular

gender includes the opposite gender.

2.3. “Congregation” means St Peters Congregation ELCSA NT.

2.4. “Member” means:

All adults and children who have been received into the ELCSA NT through Baptism, Confirmation and /or application;

All members transferred from other Lutheran Congregations according to the regulations of the Congregation;

All persons baptised in the name of the Triune God and in a recognised

manner who have been admitted from other Denominations after having


been instructed in the Lutheran doctrine and who have expressed their

adherence thereto.

“Contributing member” means a member who joins the Congregation as well as confirmed members who have been under parental care but have become economically active for the first time;

“Visiting Member” refers to a member who has formally announced his/her presence but has not formally declared himself/herself as a full/ permanent member of the St Peters Congregation.

“Economically Active Member” means a member who has a regular/ irregular source of income;

“Member in Good Standing” refers to a member who is compliant with the financial contributions clauses of this policy as applicable to him/her. The contrary hereof defines a Member-not-in good standing;

2.5. “Executive Committee” means the collective entity comprising of the Chairperson, Deputy Chairperson, Treasurer, Secretary, Deputy Secretary all duly elected by the Congregation and the Pastor in Charge;

2.6. “Annual General Meeting (AGM)” means a properly constituted gathering of all

congregants of St Peters once a year, or on special arrangement as the need may

be, with the purpose to consider the business of the Congregation and resolve

issues at hand;

2.7. “Council” means the Congregational Council ( CC) as elected by the St Peters in

accordance with the provisions of ELCSA NT Constitution;

2.8. “LMC” means Language Ministry Committees as defined by the Congregational

Council in terms of the Congregation’s schedule/ Constitution.

2.9. “Mandatory Contributions” means financial contributions as prescribed by the

Congregational Council and payable by members;

2.10. “Contracts” means contracts and/or Agreements concluded by the Council

and other parties with vested interest;

2.11. “External Auditing” means auditing or reviewing services rendered by the

external independent qualified auditor(s) as appointed by the AGM upon

request by the Council. Internal Auditing means auditing services rendered by any

member of ELCSA NT with requisite skill upon a request by the Council;

2.12. ‘’Operational Fund” means monies accumulated from contributions by

members for the purpose of general management of the Congregation;

2.13. “Service Fee” means a fee applicable to a member not in good standing who

seeks a service.

3 SCOPE OF POLICY

3.1. This policy governs all financial activities of the Congregation and all its

substructures with effect from 1 February 2018.

http://www.businessdictionary.com/definition/independent.html

http://www.businessdictionary.com/definition/qualified.html


3.2. All members of the Congregation are affected by the provision of this policy and

shall comply accordingly.

4. POLICY PRINCIPLES

4.1. The Council reserves the right to audit or cause to audit the books of all the

Ministries of the Congregation;

4.2. Assets accumulated in the name of the Congregation shall be used for the benefit

of the Congregation only;

4.3. The Treasurer and all authorized signatories shall consider budgetary approval as

a standing authorization by Council to execute financial expenditure as per

allocation. The Congregational Council shall from time to time determine the

expenditure fund limit to be exercised by the Congregational Office of St Peters.

The treasurer with the support of the LMC treasurers shall draw and present an

annual budget to the Congregational Council for approval and subsequent

ratification by the Congregation during the Annual General Meeting (AGM);

4.4. A user friendly process and reporting system without sacrificing the generally

accepted accounting principles shall be adopted.

4.5. Enhancement of financial growth and sustainability shall be promoted;

4.6. The Congregational Council shall establish an Internal Audit Committee and

mandate it with all matters related to internal audit.

4.7. Unplanned and/or emergency expenditure shall be fully motivated for by the

requester and considered by the finance committee and or Congregational Council;

4.8. Fruitless, wasteful and out of proportion expenditure shall be avoided to the best

ability of the Congregational Council.

4.9. This policy is subject to annual review by the CC subject to ratification by the

AGM.


5. REVENUE STRUCTURE

5.1. Mandatory monetary contributions

5.1.1. An economically active member is required to contribute a prescribed

annual amount toward the Operational costs of the Congregation as

determined by the CC.

5.1.2. Members are required to make a minimum of R300 00 a month towards the

Congregation’s Operational costs to be reviewed annually by the CC.

5.1.3. Should an economically active member not in good standing require a

service, he/she shall be required to contribute a service fee equivalent to the

amount outstanding due by the member, for example if a member’s

contribution is outstanding by one month the service fee will be R300 , R600

for two months R900 for three months and so on.

5.1.4. There will be a three months waiting period for a new member or visiting

member before accessing services except burial services. In the event of a

burial service being required before the three months expire and before any

contributions are made, a new member/ visiting member will be required to

contribute a service fee of R900 (equivalent of three months

contribution).Should a member have already contributed one or two months,

a member will then contribute an amount equal to the outstanding month/s.

Any member may conclude a written arrangement with the Council

represented by a Coordinator of his/her LMC for instalment payment.

A non-economically active member is exonerated from all mandatory

contributions subject to the recognition of their exceptional condition by the

Council.

Members older than 65 years are exempted from all mandatory contributions

but are expected to make if possible an annual pledge to the best of their

capabilities.

5.1.5. A member who suspended his/her membership due to unavoidable

circumstances e.g. family relocation or related commitments or loss of

employment shall continue where he/she left off.

5.2. OTHER CONTRIBUTIONS

5.2.1. Members are encouraged to participate in contributing towards all the

activities of the congregation and of their respective LMCs.

5.2.2. LMCs are at liberty to augment their contribution to all congregational

events by way of fund raising projects that are approved by the Council;


5.2.3. LMCs and Forums are at liberty to determine their sources of income to

finance their activities and carry out projects for the benefit of the

Congregation.

5.2.4. All Fund raising projects will be subject to approval by the Congregational

Council’s Fundraising sub-committee.

6. PLEDGES

A pledge is done when a member commits to give a monthly/annual amount to the Congregation, this derived from taking time to make a prayerful decision, as to how much one wishes to give.

6.1. Members are encouraged to make pledges to the Congregation regularly.

6.2. Members are encouraged to make pledges in cash or in kind in recognition of

whatever blessings they might have received from the Almighty.

All contributions may be made by:

Bank Stop or Debit Order - to be arranged by Member.

Electronic Funds Transfer. (EFT)

Cash in the numbered envelopes provided, to be placed on the Offertory collection during the congregation service.

7. PROCEDURE FOR THE ADMINISTRATION OF INCOME

7.1. The CC Treasurer Shall maintain a close working relationship with all LMC and

Ministries treasurers to ensure consistency and financial discipline among all

structures

7.2. The Treasurer shall play a leading role in appointing and directing volunteers who

count monies collected during congregation services.

7.3. The Treasurer shall take full banking responsibility for the counted cash.

7.4. The responsibility in 7.3 above may be delegated in writing to nominated officials

in the Congregational office.

7.5. The CC Treasurers in consultation with the congregational office shall set out

procedure for the LMCs and Ministries access to funds in their respective ledger

accounts at all material times.

7.5.1. All Forums and ministries shall manage their finances and keep a ledger

account of not less than R1000.00 in the Congregation’s bank account.


7.5.2. A members deposit contributions into a specified bank account and submit

proof of payment to the LMC Treasurer or Congregation’s Office.

7.5.3. LMC Treasurers will receive monthly income reports as acknowledgement

of contributions made by the members.

7.5.4. LMC Treasurer will use the monthly schedule of contributions to provide

feedback to members at various levels of the LMC.

8. ADMINISTRATION OF EXPENSES

8.1. Operational expenses

8.1.1. These include routine expenses such as office administration requisites,

cleaning material, water, telephones, electricity, rates and taxes, subsistence

and travelling, general repairs and maintenance, etc, and are covered by a

budgetary allocation. No quotations shall be required.

8.1.2. A comprehensive motivation shall be submitted to full council for advance

approval of any anticipated over-expenditure

8.1.3. Cross-transfer of budget allocation from one expense account to another is

permissible only within budget estimates and upon approval by executive

committee and the ratification by the council.

8.1.4. Official travelling and accommodation require three quotations at all times.in

the event of three quotations not being possible, a comprehensive motivation

to that effect shall be submitted.

8.1.5. Travelling by own car for official Congregational errands shall be

reimbursed at prescribed rates per kilometre but limited to rates prescribed

by SARS. Rates will be subjected to annual review.

8.1.6. Accommodation on official trips shall be financed by the Council only in

institutions rated three stars or less, and travelling for that purpose exceeds

300 kilometres one way.

8.1.7. All activities of the substructures shall be financed only if they have been

approved by the Council during budgeting process, otherwise a detailed

motivation shall be submitted by the concerned party.


8.2. Capital expenditure

8.2.1. A comprehensive motivation supported by budget allocation and three

quotations shall be presented to the council for all capital expenses.

8.2.2. The budget provides for all foreseen expenditure but cost-saving

opportunities are always available and should be considered through cost

comparison mechanisms, seeking alternative suppliers and a thorough

assessment of the need for each and every expenditure at a point in time. A

budget provision is not a must-spent item.

8.2.3. The normal budgeting procedure that includes but is not limited to the

consideration of zero based, historical facts, mechanical and other forecast

based on both patterns of usage and inflation indices shall be applied.

8.2.4. Budget parameters shall be presented by the council to the finance

committee and shall be factored in together with inputs by wards, leagues

and associations.

9. MANDATES

9.1. The Council shall mandate not more than five Council Members to be cheque

account signatories and mandate the bank on signature arrangements to be

honoured by it.

9.2. Bank signatories to authorise all operational expenditure within the budgetary

provisions.

9.3. The Council to approve/disapprove all capital expenditure on the basis of the

motivation presented.

9.4. Over-expenditure is foreseeable and must be motivated for to the Council well in

advance.

10. FINANCIAL REPORTS AND SUBMISSIONS

10.1. Treasurer compiles a monthly financial report and submits it to the Council.

10.2. Treasurer shall compile Annual Financial Statements in consultation with the

Finance Committee, and submit same to the Executive Committee, the Council

and the AGM.


10.3. The annual financial report shall comprise of the following:-

10.3.1. Cash flow statement

10.3.2. Income statement with notes

10.3.3. Balance sheet with notes

10.3.4. Change of Equity statement

10.3.5. Debtors statement-Age analysis with a progress report on collections

10.3.6. Creditors statement with notes

10.3.7. Finance Committee submits Audited Financial Reports to the Council for

approval and presentation to the Annual General Meeting of the

Congregation.

11. AMENDMENT OF THE POLICY

The policy will be amended annually.


ANNEXURES TO THE POLICY

Annexure A

RESPONSIBILITIES OF THE FINANCE COMMITTEE

1. Manage the budget compilation process;

2. Recommend fund raising projects and implement same upon approval by the Council;

3. Advise the Council on options available for investing surplus funds; 4. Provide the Council with the quarterly financial reports and the Executive

Committee with the monthly overview of the financial situation.

5. Provide Congregants with a six months reconciliation of their mandatory contributions in July and January of each year;

6. Advise the Council on all matters of finance in nature and implications of specific

decisions under consideration.

7. Recommend to the Council the mandatory contributions and collection procedures for such contributions and pledges;

8. Develop and recommend write-off policy for irrecoverable assets and

uneconomical assets.

9. Arrange and execute hand-over of financial records and assets in the event of the relevant authority changing hands;

10. Ensure proper and safe keeping of accounting records for the period of ten years

and update the archives annually.

11. Develop and implement policy on contracts for leasing/renting


Annexure B

RESPONSIBILITIES OF THE INTERNAL AUDIT COMMITTEE From an internal audit oversight perspective, the Committee is primarily responsible for:-

considering and monitoring the independence of the external auditors and the appropriate rotation of the lead audit partner and to make recommendations to the CC/AGM on the appointment and dismissal of the external auditor;

overseeing the effectiveness of the Congregations’ internal control systems, ensuring that they are designed in response to identified key business and control risks, and have been effective throughout the year;

reviewing the scope and effectiveness of the external audit functions; ensuring that adequate books and records have been maintained; monitoring proposed changes in accounting policies; considering the accounting and taxation implications of major transactions; reviewing and reporting on compliance with IFRS, King III where applicable

requirements; reviewing of managements’ evaluation of the Group’s going concern assertion

remains appropriate; reviewing the interim and annual financial statements to ensure that they give fair

presentation, consistent with information known to the Committee, before submission to the Board;

considering the appropriateness of the expertise and experience of the Treasurer on an annual basis;

determine the fees to be paid to the auditor and the auditor’s terms of engagement;

ensure that the appointment of the auditor complies with the provisions of the Schedule and any other legislation relating to the appointment of auditors;

determine the nature and extent of any non-audit services which the auditor may provide to the Congregation;

pre-approve any proposed agreement with the auditor for the provision of non-audit services to the Congregation;

receive and deal appropriately with any concerns or complaints relating to the accounting practices and internal audit of the Congregation, the content or auditing of the financial statements or any other related matter;

make submissions to the CC on any matter concerning the Congregation’s accounting policies, financial controls, records and reporting; and to perform other functions as determined by the CC, including development and implementation of policy and a plan for a systematic and disciplined approach to evaluate and improve effectiveness of risk management control and governance.


Annexure C

FINANCIAL DOCUMENTS

The following documents are prerequisites for a generally accepted accounting process;

1. Receipt slip

2. Proof of payment

3. Purchase/Payment requisition

4. Bank deposit slip

5. Trial balance

6. Bank account reconciliation statement

7. Bank statement

8. Cash flow statement

9. Income statement

10. Balance sheet (Financial Status)

11. Assets register

12. Cheque book

13. Specimen signature as per current bank signatory mandate.

14. Motivation for capital expenditure

15. Motivation for expenditure outside budgetary provision.

16. Monthly schedule of contributions

17. Remittance advice

18. Cheque Requisition

19. Invoices/Statements

20. Quotations


Annexure D

PROCEDURE OF CLARIFY MEMBERSHIP STATUS OF THE ST PETERS CONGREGATION

1. Members as per definition of membership in the Finance Policy continue to be members.

2. Where a member is on the records, however has neither paid membership contributions, nor has been in services, nor has shown no interest, or where post sent to them is returned with “addressee unknown” , the following steps are to be taken:

a. Where a phone number is available, telephone contact is to be attempted. If after being contacted the person expresses interest in continuing to belong to the St Peter congregation, then no 1above applies. Where the person indicates lack of interest in continuing membership, or indicates to having joined another congregation the no.3.applies. A note on the telephone conversation is to be made.

b. Where a phone number does not exist, or the phone is not answered, or answered by different people, a letter (e-mail or post) is to be written, requesting the persons to indicate whether they are interested in continuing membership. Where an answer is received within a month indicating interest, 1. Applies. Where no answer is received, or the letter is returned addressee unknown, 2. Applies. A note on the correspondence is to be made, and the correspondence is to be kept.

3. Where people have indicated that they do not have interest in continuing membership, their names, together with a note on how this information was obtained, is to be presented to Congregational Council. The CC will then decide to remove these people from the membership of the Congregation.

4. A letter and certificate of removal is to be sent to the last known address of the persons removed.

N. B. Any member requiring a service should start first by informing the coordinator at the Pastoral Redemptive Community (PRC) they belong to. Pastors will not render any service required by a member without the recommendation of the PRC coordinator.

Documents

ST PETERS CONGREGATION’S FINANCE POLICY AND PROCEDURES