Expenditure - not Expense 0067-02 ZZall

Expenditure - not Expense     0067-02 ZZall
                                                                          - - - Rejoice in the Lord always ... again I say Rejoice !!! - - -

                            TO: Interested Ministries                                                                                                            FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                                     FILE: 0067-02/all

                             RE: Expenditure-not Expense                                                                                                    Originated: September 1997

        Below is a hypothetical Online Email (EML) thread between any one of the following MFTeam members: PAT (Ministry Chief Executive), LEE: (Ministry Volunteer Treasurer), or FRAN: (Ministry Computer Bookkeeper) and Jim@bcidot.org Click here and go to List of threads (THRDs) at www.bcidot.org

FR: PAT

        As you know, Jim, I do not have a business background, but I do my best to understand our Ministry’s financial statements.
        I notice that our operating expense budget has such items as "Acquisition of Equipment" and "Mortgage Payments". I do not think of these as ‘expenses’ but as buying something or paying off a debt. Are these really expenses?

FR: JIM

   First, Pat, we have provided below a partial Publications List found on our http://www.bcidot.org Web Site. Hopefully you will find them speaking to these issues as you continue toward relevant Ministry Financial facts.
   But, the issue you raised can get a little confusing ...... that is why I like the term "EXPENDITURES" as apposed to "EXPENSES.". Notice how I have used the term "bills" below and how the income must be enough to pay for the "bills".

Earned or General Fund Income must pay the operating bills.

Sal/Benefits and department costs result in bills.

Other Ministry Operations involve bills.

Installment payments (on facility or equipment) are bills

Buying new Equipment can involve bills.

And the Ministry must be sure that Income is enough to cover all of the above bills

For full accountability the Ministry needs to ultimately show the payment of such bills as additions to accountable assets and/or reduction of applicable liabilities.

Often special Gifts come in for new Equipment.

FR: PAT

OK, how does this show up in our set of books?

FR: Jim

    Publication 0127-02 below contains information on an ACTIVE and DORMANT set of books within a Ministry.    Basically you have one set of books for the General Purpose Fund and Special Purpose Funds, as referenced in Publication 0041-01 below. This has a Current/Active emphasis and allows you to know daily just where you are in both of these areas of your financial stewardship. Please also consider the reflection of Land Building Equipment/plus related Liabilities matters raised and answered within the Memo LB&E Acctg, or 0102-02 link below.
    Then at least annually you record within a Dormant set of Books any acquisition of a Facility or Equipment items, plus record any reduction of any liability during that time.
    The annual financial report combines these two set of books and provides readers with full and complete financial status and activity.

LIST OF PUBLICATIONS

    Annual GAAP Church Financial Info 5700-07 ZZchu
    Current-Dormant Sets of Books 0127-02 ZZall
    Fixed Asset and LB&E Issues 0018-09 ZZall
    Fund Accounting - Not Fun 0041-01 ZZall
    Memo LB&E Acctg - 0102-02 ZZall
    Ministry Accounting Issues 0060-02 ZZall
    Reports, Ministry Finance 0084-01 ZZall
    Three Legged Accounting 0111-02 ZZall

                    Let me know at Jim@bcidot.org if you have questions about this 0067-02 article link contents, etc.

   The bulk of this Publication originated in September 1997 and was UPTD:May 03, 2008

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        (1) An Online Document, or WRIT (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
        (2) WRIT formats include the perspective of    Jim@bcidot.org   via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, a hypothetical Online conversation with members of the MFTeam; GLEANINGS, or Scripture within context of the MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; and via FAQ, response to Frequently Asked Questions