Reports, Year End Ministry Finances  0097-01  ZZall

                                                                        - - - Rejoice in the Lord always ... again I say Rejoice !!! - - -

                             TO:  Interested Ministries                                                                                                        FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                                    FILE:  0097-01/all

                              RE:  Reports, Year End Ministry Finances                                                                        Originated:  August 1982                  

PREFACE

    We believe you should keep your constituency appraised of your financial matters. And It adds a great deal of credibility to your Ministry when you annually have the appropriate attestation assignment (Review or Opinion Audit) by a CPA-Auditing firm. 
    However, Year End Ministry Financial report information, in our opinion, should flow from the Ministry Finance Team.   Or we believe an ideal year end report production steps would involve something like the following:

  •    The Ministry is knowledgeable about the current 'accordingly to hoyle'  (click here for more information re GAAP) year end reporting requirements.   This often requires special training by the CPA-Auditor ---- and it can include division of the year end audit into at least two two major segments.  The CPA-Auditor assist the MFTeam close the year books 'according to hoyle', and then they finish their attest tasks at a different time.
  •    We fully realize that this ideal is not always possible -- especially with smaller Ministries.
  •    But such an effort applies especially to Ministry who is interested in operating either with, and better than, what is required by ECFA for membership. Click here for more info.
  •    In our judgment, all too often a Ministry completes the last month of the year as they do any month of the year.
  •    They then await the CPA-Auditor who, in essence, works through the year end closing steps ..... and jumps through the necessary hoops to complete the audit.  And the MFTeam does its own thing about any year end financial reporting.
  •    In our judgment, the ideal goal is to have a complete 'according to hoyle' year end produced by the MFTeam. This would involve such things as:
    • All money owed to the Ministry (Acct Rec) is on the books.
    • All Ministry debt is on the books.
    • The annual deprecation entries are made.
    • For publicly supported Ministries, all expenses are appropriately allocated among Program, and the supporting services of Fund Raising plus Management and General.
    • The Ministry clearly defines Fund Balances (the technical term is 'Net Assets;) and reports as Unrestricted, Temporarily and/or Permanently Restricted.
  •    The equally ideal goal is to have the CPA-Auditor report mirror the dollars/formation/structure/segments of the MFTeam produced reports.  The CPA-Auditor then presents this same year end report data with a letter which does, or does not, attest to the 'accordingly to hoyle' numbers appearing in the report. Click here for more CPA-Auditor reports information.
  •    Such a process means that the MFTeam is not required to await the Auditor's report to know exactly 'how we did for the year'.   Plus the constituency's annual report production can go forward and not await numbers that appear only in the CPA-Auditor report, etc.  

YEAR END REPORT CONTENTS

    These annual Year End finance reports for the CPA-Auditor should include at least the following; Click here for Samples.

  1. Statement of Financial Position (Balance Sheet) at September 30, XXX1 and XXX0
  2. Statement of Activity (Income Statement)  for the Years Ended September 30,  XXX1 and XXX0.
  3. Statement of Functional Expenses for Years Ended September 30, XXX1 and XXX0 -- especially in a non-church setting.
  4. Statement of Cash Flows for Years Ended September 30, XXX1 and XXX0.
  5. Notes to the Financial Statements September 30, XXX1
  6. Schedules - as needed

YEAR END REPORT USES

We recommend you consider using these reports as follows:

WHO -- WHAT
  • Management and all Board .... all 6 of the above.
  • Sensitive Constituents ... all 6 of the above.
  • Others who ask ... generally the information appearing below within the suggested finance section of the annual report to the constituency will suffice.
  • Most government reports can be produced from the first 3 reports above.

REPORT TO YOUR CONSTITUENCY

    We recommend that you faithfully present Ministry financial information in your periodical (at least annual) report; mostly only from information in the above "2. Statement of Activity information." The usual constituent will want to know how much came in and how you used it. The content in a textual report might appear as follows:

This Year's Operating Statement

PerCent

Public Support and revenue

Contributions

$ 115,000

Revenue

$ 10,000

Total Income

$ 125,000

100.00

Expenses

Program A

$ 49,000

Program B

$ 19,000

Program C

$ 4,000

Total Program

$ 72,000

57.00

Supporting services

Management and

General

$ 4,500

3.50

Fund Raising

$ 14,500

$ 19,000

11.50

Total Expenses

$ 91,000

72.00

Excess before Capital Additions

$ 34,000

27.00

Capital Additions

$ 25,000

20.00

Excess after Capital Additions

$ 9,000

7.00

    In addition to, or in place of the above textual report, we recommend that you make maximum use of Charts and Graphs -- ask us for samples.

CONCLUSION

    Please let us know if we can assist you in this important phase of your financial stewardship, as you report to those who should know.

  The bulk of this Publication originated in August 1982 and was  .    UPTD: May 03, 2008

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        (1) An Onliner 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