Budget at a Church-Comments 5008-77 ZZchu

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                              TO: Interested Churches                                                                                FROM: Jim Bramer, Retired CPA-Audit 
                                                                                                                                                             FILE: 5008-77/Chu

                               RE: Church Budget Comments                                                                    Originated:  July 1996                       


            In my "travels" I learn of what appears to be an relevant topic for the " MFTeam." Below are some 'quickie' comments or thoughts on the topic of Church Budgets.  Let us know at  Jim@bcidot.org   if what appears below rings a bell with you and you would like to interact.


            Church Budget Calendar Issues......

                        (for example, if the Fiscal year ends in June)

            Annual Budget Approval Process.......

                    Factors include:

  •  During Fiscal Year to end June 30, xxx1;

  •  The Congregation meets during May xxx1 to review/comment on a "Preliminary Annual Budget" for the year to end June 30, xxx2; and

  •   The Congregational Annual meeting is June xxx1 where it approves the "Authorized Annual Budget" for the upcoming year to end June 30, xxx2.  During Months 8 and/or 9 (February xxx1 or March xxx1)  - - - -

       DEPARTMENT HEADS ....

              >      Review their current Budget to Actual status
              >     Give reasons for wide variances ..... some might be:
              
              If spent MORE than Budget Amounts ....

         --  Responded to perceived emergencies...

-- Current Budget was not realistic .... we needed more than we realized in order to carry out our Ministry.

-- We did not really know what our Ministry plans would cost.

 -- Frankly, we did not understand our ongoing financial reports enough to make intelligent buying decisions. 

  -- We just plain goofed!

                           If the authorized Budget amount NOT really needed ..

 -- Current Budget was not realistic ... we really did NOT   need that much in order to carry out our Ministry.

 --  Frankly, we padded the current Budget 'just in case'.

************

       RE: Balance of This Year (thru June 30, xxx1)

> As to the remaining months of the fiscal year....
> Department had anticipated what is going to happen (the operative word is PlanJect) between now and then and seek what money is needed for the remainder of the year.  During Month 10 (April xxx1)

                        RE: Upcoming new Fiscal year (thru June 30, xxx2)

  > Department head makes plans for the entire upcoming year and then, using current and past historical Ministry costs, estimate (the operative word is "PlanJect") what it is going to cost to carry out these plans.
   > Department head submits and re-submits to the Finance Committee until such 'PlanJections' becomes the "Preliminary Proposed Budget."

                           During Month 11 (May xxx1)

> The Finance Committee presents the entire "Preliminary Proposed Budget" to the Board for review and ratification.
> The Board then presents the "Preliminary Proposed Budget" to the Congregation for review and comments.

                           During Month 12 (June xxx1)

 > The congregation approves the "Preliminary Proposed Budget" and it then becomes the "Authorized Annual Budget" for the year to end June xxx2.

                            During Month 7 (January xxx2)

 > As necessary, the entire process above takes place and the Congregation approves an "Adjusted Annual Budget"

**************

 COMMENTS.....

          The Board needs to define when it is necessary to go through the mid year Month 7 process. Hopefully, there is an Board policy, approved by the Congregation, whereby the Board can authorize mid-year Budget increases of up to some $5,000 (or a specified percent of the approved Annual Budget), before it is necessary to go back to the Congregation at mid-year.
           The Board needs to define when it is necessary to go through the mid year Month 7 process. Hopefully, there is an Board policy, approved by the Congregation, whereby the Board can authorize mid-year Budget increases of up to some $5,000 (or a specified percent of the approved Annual Budget), before it is necessary to go back to the Congregation at mid-year.

          


   Please Click here for list of Church resources here on www.bcidot.org. This publication originated in July 1996 and was.   UPTD: April 24, 2010

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