ECFA and Small Publically Supported Ministries

ECFA and Small Publically Supported Ministries - 0192-01 ZZhlp

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                   TO:   Interested Onliners                                                                                                 FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                                                      FILE: 0192-01/hlp

                    RE:   ECFA and Small Ministries                                                                                      Originated: January 2003

IMPORTANT RECENT NOTICES:

         Small Ministries should be aware of the   FinFax accounting system as discussed when you go   Here. and Here . ECFA now has new "Affiliated" membership whereby all Ministries with $1,500,000 or less per annum can derive the benefits of ECFA and pay their Auditors less money.   Please go to 0210 and link to ECFA for more information.

     - PREFACE -

         One of the merits of the tremendous ECFA (Evangelical Council for Financial Accountability) organization is that it declares to the Christian Public that their members are appropriate stewards of money handled. Please Click here and go to ECFA's web site for more specifics. As many of you know, my heart is for the small non-church Publicly Supported Ministry (I often reference them as Mom-Pop endeavors) who handles $99,999 or less per annum. Another view covers those who handle less than $500,000 per annum ... hereafter referred to as "Small Ministries ". It is extremely hard for them to afford both the required CPA-Auditor relationship and the ECFA membership fees; yet they need to be externally accountable like everyone else to their constituency.    These Ministries are more in need of good financial stewardship/accountability than even larger Ministries due to such reasons as:

1> Often untrained volunteers handle the money;
2> Their overall "Mom and Pop" organizational culture;
3> Their leaders are often non-business people;
4> Due to size, they have limited internal financial controls;
5> Plus the overall aspect of limited financial resources.

         Accordingly, such Ministries need to 'get with it' and be good fiscal stewards as defined by the standards that ECFA requires of it's membership. See more thoughts about this within 0922 . Also go to 0930 for information about a proposed Web Based eExchequer Service. Central to all of this is properly handling financial transactions within context of meeting the overall ECFA standards as presently corroborated after their year end by a CPA's annual report. Please see 0003 for more CPA audit specifics. Such Ministries desperately need CPA-Audit services but usually can not afford even the discounted $75-$100 hourly fees that some CPA firms might offer.

    There must be some viable alternatives for these Small Ministries so that they can ultimately be a part of ECFA. Although some of what follows is quite radical (especially from a Retired CPA-Auditor), surely some of these needs can be met via something like the following:

-- ASSURORs - Not CPA-AUDITORS

    I recommend that the annual attestation be done by an independent ASSUROR professional. Please note that I have changed the title to "ASSUROR" from "AUDITOR" in order to distinguish this effort from the usual Auditor CPAs in order to better ID such proposed ASSUROR professionals who are listed below:

1> - CPAs who serve the public, but have chosen to not do CPA-Audits or Reviews; as they do not want to work through the necessary "Peer Review" and related involved requirements.
2> - CPAs, presently working for one employer or those that are retired; they want to serve in this way, but are not currently qualified to do CPA-Audits or Reviews
3> -- Any non CPA Accountant, like the following, who become ECFA ASSURORs when they met the "to be defined" ECFA ASSUROR requirements and regularly pass muster with ECFA.
                              -- A Public Accountant who is not a CPA
                              -- An Enrolled Agent
                              -- Any qualified Retired Accountant

     I(1) You will find of interest that I am NOT one of these proposed regular ECFA ASSURORs for reasons found within 0047.   But I might be available to work Online as an ECFA qualified ASSUROR and work with test Ministries and ECFA to get this effort underway.

-- IRS Form 990 emphasis

    Unlike the usual CPA-Audit report, there is no Annual ASSUROR report per se, as the content of the annual IRS Form 990 provides the necessary financial information like: Balance Sheet/Income Statement//Functional Expense Statement. etc (I know we have NPO GAAP 'fancy' names for all of these now).

- The annual form 990 (Not 990EZ) would be signed by the ASSUROR and
- It would be prepared basically in compliance with NPO GAAP - see 0004 for more GAAP info.
- The annual form 990 would be available online at Guidestar or to anyone via snail mail from these Small Ministries.
- The constituency of such a Small Ministry would be annually informed about an available Annual Constituency Report (this could be via Email, etc) plus being an ECFA member and that such a report and the 990 is available to them.

-- ASSUROR's Check Off list

      ECFA would compile a concise "what did the ASSUROR do" list as part of their assignment. The objective is for ECFA to be further satisfied that their standards are met via this ASSUROR professional. The ASSUROR would complete this list online by answering "yes" or "no" and submit to ECFA, etc. This list would at least cover certain specifics about such topics as:

                   -- See the "ECFA Standards of Responsible Stewardship" list that involves fiscal matters
                   -- Financial policies and procedures
                   -- Internal Financial controls and Internal Audit issues

- During the Year

       Many of these ASSURORs would have a valuable and needed "hands-on" relationship with the Small Ministry during the year -- see Compilations mentioned within 0003. This could be a relationship that is 'across the street' or 'across the Internet' as detailed within 0109. ---- and it also could be involved in the eExchequer effort discussed at 0930. Such a relationship is designed to meet both the Small Ministry's practical needs throughout the fiscal year but also to contribute in meeting the annual ECFA ASSUROR requirements as described herein.

     Let me know if you would like to discuss this further with me or with ECFA, etc

IMPORTANT RECENT NOTICES:

         Small Ministries should be aware of the   FinFax accounting as set forth when you go   Here. and Here . ECFA now has new "Affiliated" members whereby all Ministries with $1,500,000 or less per annum can derive the benefits of ECFA and pay their Auditors less money.   Please go to 0210 and link to ECFA for more information.

      This publication originated in January 2003 and was. UPTD: September 12, 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, or a hypothetical Online conversation (thread) with members of a MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; or via a FAQ, or a response to Frequently Asked Questions.