01 - Financial Internal Controls and a separate Donation System  (01)

From Onliner:    
  
    Jim,  we have a separate Donation system (or database) that you advocate when we go to  0021 , and our auditors have said something about our missing the needed "Financial Internal Controls"  via a "Control Account and Subsidiary "  process.  Please explain this.

From   Jim@bcidot.org

            Within this context, you can identify with the need for the total of amounts due from each entity owing you money (Subsidiary list) agreeing with the total Accounts Receivable (Control Account) amount appearing within your Balance Sheet.  Also the same for Account Payable ...  the amount (Control Account) appearing within your Balance Sheet must be be in agreement with a total of the individual amounts (Subsidiary info) due to your vendors. Such agreement within most Computer Accounting Systems (like QuickBooks) is made easy by their use of integrated and affiliated databases, etc.  But this important "Financial Internal Control" feature is missing when you use a separate non-integrated Donations system (or database.)
            To accomplish this weekly verification that the Donation totals appearing within the General Ledger are in agreement with the Donations by Giver info within a separate Donation database system, I recommend that you maintain a separate Excel doc of Calendar Year  totals.  Or you accumulate the cash basis weekly batch totals (Control Account) of the donations that have been posted into the General Ledger and weekly verify that it agrees with the accumulated Year to date Calendar Year donation total (obviously you can produce a detailed list by donor if needed) as posted to this separate Donations system (Subsidiary info).  Of course, if for some reason you change the donation bank deposit info, (like NSF checks, etc)  then you will need to reflect this within both of these Control Account and Subsidiary records, etc.

02 - Mis-Appropriation of Ministry Resources - (02)

       As most of you know, I get Emails from anywhere that English is used within the Internet. Recently I interacted with a Ministry who experienced staff mis-use of resources (not money per se) as we discussed how this should be handled with this much loved staff person.        I  am impressed anew how essential it is for the "Sin Resolution" issues to be resolved first; or this person needs to confess their wrong to both the Lord and to the applicable Ministry people. Yes, Ministry resources were wrongfully consumed, but the more significant issue is for this person to be right with both the Lord and the Ministry so they can continue to effectively serve there.  Only after this takes place does the Ministry pursue such matters as: >>  Dollar value of resources mis-used; >> how it is to be repaid by the staffer: >> have a better written definition of work responsibilities at the Ministry with mutual expectations;  >> plus agreed possible personal use of any Ministry resources.

03 - eFiling with the IRS by Individuals - (03)

    The  IRS tells us that more than half of the nation's individual taxpayers filed their returns electronically last year.- one incentive, they received their refunds in two weeks or less.  More info is available at www.irs.gov about how the IRS is encouraging this and how they have free eFiling software and tax return prep services for those of us who have taxable income of $50,000 or less

04 - Coaching Ministries in their use of QuickBooks (04)

    One of my 2006 New Year's resolutions is to be better prepared to help Churches, Missionary Organizations and other such Ministries effectively utilize the QuickBooks software resources as they do their Ministry accounting.  Accordingly,  I have hopefully started this by setting forth more precisely my twelve "Assistance Specifics" steps as detailed within  0199  --  or what is involved in this process.  Then I provide at least five ""Coaching Options"  as to how such an experience could be accomplished.  I would appreciate any suggestions that any of you might offer after reading this.  Thank you.

05 - Reporting of Fixed Assets as "Memo Accounts"  -  (05)

    Please go to  0102  where I discuss this topic more in depth, but I have found, particularly at Churches, that they either minimize their accounting for Fixed Assets (Land, Building and Equipment - LB&E) or  they inappropriately do NOT show this information anywhere in their books as to how much money is tied up in these assets (see  0033  for information as to how to correct this). 
    Or, because they do NOT make daily decisions from such information, they update these accounts annually and reflect it in their Balance Sheet via what I call "Memo Accounts"  -- see the Fixed Asset sample report below where the total is "None" because the "Fixed Asset Equity" of $4,960 shown below is an asset offset.  By this process they do not clutter up the "Funds"  (or  Net Assets like Fixed Asset Equity) area below with this non operating information. Some of you have a separate LB&E set of books (see  0127  for details) which is updated at least annually and then included in your annual report.

Assets:
	Cash in Banks		$ 15,000
	Due to us		$ 2,500
	Total			$ 17,500
Fixed Asset:
	See Excel for Details		$ 11,350
	Accum Depreciation		$ (2,890)
	1st of Yr Unpaid Debt		$ (3,500)
	Fixed Asset Equity		$ (4,960)
	Total			None
Liabilities:
	Due to Vendors		$ 1,500
	Held for Others		$ 250	$ 1,750
Funds:
	Donor Restrictions		$ 4,350
	Board SetASides		$ 5,000
	Board Discretionary		$ 6,400	$ 15,750
	Total			$ 17,500

06 - Use of QuickBooks to do Endowment and/or Trust Fund Accounting - (06)

    Please take the time to read the content of  0680  where I set forth a way to use the Equity Accounts within QuickBooks (QBs) and the applicable QB Class features to account for Endowment and/or Trust Funds and what goes on therein.  Let me know by Email if anyone is interested in trying out this system with me.  Thank you.

Click below for Potentially Helpful Online Links for JIMs JRNL Readers      

                    Unrelated Business Income at a Church     ----  http://www.thechurchreport.com/content/view/659/32/
                    Church and Ministry Software Analysis  ---  http://www.nacba.net/PDF_FILES/CMS%20List.NBN%202005.pdf
                    Pastors and preaching about Money for the Church ---  http://www.ctlibrary.com/le/2002/fall/5.42.html
                    Righteous Personal Finance info at www.bcidot.org   --  http://www.bcidot.org/rpf/4999-99.html
                    Ministry Accounting Services ---  http://www.aactinc.org/fam.htm
                    Deputizing (Missionary Financial Support, etc) info via ECFA -- http://www.ecfa.org/ContentEngine.aspx?Page=Comment78  .
                    QuickBooks Online Editions - 2005 update --- 
                                       http://oe.quickbooks.com/index.cfm?sc=EML-001-ENEW?priorityCode=3008906329&CMP=NLC-Vanilla_Ind_Nov05
                    Focus on Accountability via ECFA - http://www.ecfamembers.org/pdf/Newsletters/FOCUS_4Q_2005.pdf
                    Free Microsoft software for 501 (C-3)  Non Profits -  http://www.techsoup.org/stock/microsoftprogram.asp

          Bible Verse and/or Prayerful Thots:

    Lord, up above in the JIMs JRNL I make reference to "Coaching Ministries in their use of QuickBooks."   My prayer, Oh Lord, is that I do a better job in this effort beginning in 2006 as applicable Ministries make full use of this accounting software tool/resource.  I particularly ask your blessing on their use of viewing my desktop from their Computer now that more of them have fast Online connections. 

     This "Blogger" like monthly endeavor (99) allows me to share some personal comments/thoughts as to Ministry Finance issues plus matters concerning Righteous Personal Finance for Christian people.  Please go to  0200  for further explanation and links to earlier JIM's JRNLs.  The four digit links  xxxx  and some  "Click Here" herein come from www.bcidot.org sources. 
    If you would like to receive the next monthly JIM's JRNL during the first week of the subsequent month,  please join the following Yahoo Group:   ---- http://groups.yahoo.com/group/JIMsJRNL/.    Caution --- the non  www.bcidot.org  web links that I reference herein do NOT necessarily imply my endorsement.  Further, if any of these links do not work, let us know which one at LINK@bcidot.org.  Lists of our  www.bcidot.org  articles (or Web Docs), can be found at 9703.  9704  9705.   and  9706

 Probable "Ministry Finance Lingo", or "Frequently Used Vocational Terms" used herein, appear below:

            BLVR =  Someone who has accepted Jesus Christ as Lord and Savior, CBA = Church Business Administrator, CBAer;  CMS = Church Management Software/System;  CPA = Certified Public Accountant;  GAAP = Generally Accepted Accounting Principles/Practices;  GPFund or GPF = General Purpose Fund; MFTeam or MFT= Ministry Finance Team;  QBOE = QuickBooks Online Edition;  QBooks or QB = Quickbooks; RPFin  = Righteous Personal Finance , SPFunds or SPFs = Special Purpose Funds

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Click Here and go to a list of earlier JIM's JRNLs - Contact JimRetCPA@bcidot.org

This document was updated last on:  May 25, 2007