- - And the Lord direct your heart in the love of God as you continue to faithfully serve Him - -

Links on the www.bcidot.org Web Site include:      HOME  |  ABOUT  US   |    OUR PURPOSE   |   SITEMAP   |  COMPUTER FUND ACCTG  |  HELPS   |  GLOSSARY 

           TO:  Interested Onliners                                                                                                   FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                        
   
           RE: J I Ms  J R N L for the month of March 2006                                                               FILE:  0203-06/jrnl        
                (Click Here for "Blogger like" perspective/rationale)      

01 - Fiscal Fuel:  (01)

        Some of us like to view Ministry finances as one of the "FUELs" needed to be righteously used, or expended, to accomplish the Ministry's purpose. Very simply .... it takes money (a necessary FUEL) in order to get things done!
        There are not only Cash/Money fiscal "FUELs",  but other non-Cash fiscal resources like facilities, equipment, materials and access to tools. For some Ministries these non-Cash assets may be in the form of sums due the Ministry for services provided plus appropriate use of Computer and the Internet.  But suffice is to say, the Ministry needs to prudently use these God-provided resources, or FUEL,  as it judiciously ---

M)arshals  ---- First you must rightfully 'obtain' money', or garner the FUEL. 
M)anages ---- Then you MUST prudently manage and efficiently use such resources as FUEL in carrying out the purpose of the Ministry.
M)aintains ---  Land, Buildings and Equipment is FUEL that is spent now and is applicable to a longer period of time ...   make the very best use of these resources.  Sometimes the FUEL is temporarily not used ...manage money deposits  prudently.  Be righteous about 'hoarding' ... the FUEL needs to be properly consumed. 

    These efforts take responsible human beings who carefully use their "Gift of Administration" and proper tools/systems as the Ministry covers the two economic areas of resourceful  funding and purposeful spending.

02 - Debt Servicing of Facilities/Buildings etc  (02)

    Are you getting money/pledges to fund a new Building at your Church or Ministry -- or are you in the process of determining how you might pay the Principal and Interest (or do the Debt Servicing) once you borrow the needed money to finish it?  If so, you hopefully will find helpful the following dialog:

FR: Onliner -
        To remind you, Jim, we are a church with an annual operating budget of over $750,000. Our present facilities are paid for, but we need more room and are gearing up for a new building construction in the near future.   Thank you for making available information about Church Debt in  0126. We anticipate getting a mortgage for part of the costs as we expect to not only make monthly payments of Principal and Interest (you refer to this as "Debt Servicing," but also make payments on the Principal only as Building Fund designated gifts come in, etc. Via a Financial Stewardship campaign we will be asking our people to make 'over and above' pledges to this special Building Fund project.  Do you have any finance and accounting observations?  

FR: JimRetCPA@bcidot.org
      Let me place the following hypothetical information before you; by the way, the Church's fiscal year flows from May 1st to the following April 30th  

Anticipated new Facility costs		$850,000
Anticipated Donations		$250,000
Amount to finance via a mortgage		$600,000
Probable monthly Mortgage payments		$4,000

FR: Onliner -
        Our actual numbers, of course, are quite different, but that's OK as they should serve our purposes here.

 FR: JIM -
       For the applicable period of time, the church should take an approach of what I call VIRTUAL DEBT SERVICING. I define this as: 

    The Church increases its "General Purpose Fund" budget to include the amount of  anticipated Mortgage payments  (Debt Servicing) on money that it knows it will need to borrow in order to complete its Building/Facility Construction project. This Board Discretionary money is placed in its own Building Fund.  We take these steps because the weekly giving must ultimately be enough for such an actual "Debt Service" payment.

   Some initial sample scenario considerations:
        1>  The May xxx0 through April xxx1 budget includes $48,000
                 ($4,000 times 12) as the VIRTUAL DEBT SERVICING
                 amount.  
        2>  In May xxx0 and every month thereafter the 
        3>  Church writes a check to itself for $4,000 and
        4>  Places it in the Building Fund 

FR: Onliner  -
        It may take a while before the weekly offerings to the General Purpose Fund are enough to fund the Monthly VIRTUAL DEBT SERVICING amount. What do we do then? 

   FR: JIM -
        The leadership needs to monitor this very closely since the long term goal is to make the actual Mortgage Payment of Principal and Interest, or Debt Service,  payment from the weekly giving to the General Purpose Fund.  Plus be able to reduce the amount borrowed by the amounts designated for the Building Fund.  However, in the initial stages of the VIRTUAL DEBT SERVICING effort the General Purpose Fund might run a deficit. See the sample year end scenario below:

						Weekly
	General Purpose Fund:					or divide
						by 52
Total Annual Income					$498,125	$ 9,579
Expenditures:
	VIRTUAL DEBT SERVICE			$ 48,000
	All other approved
		expenditures		$462,877
Total Annual Expenditures					$510,877	$ 9,825
	Year End (Deficit)				$(12,752)	$ (245)

        In this case, the above $12,752 would come back to the General Fund from the Building Fund, since there really is no construction, etc at this time, and eliminate the General Fund deficit.  Why --- because the $48,000 was Board Discretionary inter-fund transfers (the Board made this transfer voluntarily) to the Building Fund and now it can be sent back, etc.  If the $12,752 deficit amount comes closer to $48,000, the Church obviously has problems with any type of actual future Debt Servicing by the General Fund.  There may need to be cuts in future Operational costs.

FR: Onliner -
        What difference would there be if we no  longer will be spending some $3,000 monthly  ($36,000 for the year) for Facility or Building Rental?

   FR: JIM -
        The major difference would be the relationship between the annual $36,000 and the above annual amount of $48,000.  Or the Church would need, of course,  to annually fund as Virtual Debt Servicing within the General Fund the difference between $48,000 and $36,000, or $12,000.   CAUTION:   Be aware of some additional Facility Operating costs you will also have with your own Building that you may not have had at the place you were renting.

FR: Onliner -
        Thanks, Jim -----I think I  'get the message'.  I will take all of this up with our Church leadership and probably be get back to you with further questions.

 03 - "After the Fact - ATF"  QBuxBox Weekly Internet Accounting system - (03)

       I have set forth within  1211  the "AFT (After the Fact) QBuxBox Weekly Internet Accounting System." This is designed to be used by Small Ministries (be it a beginning Church or any other type of Ministry or Missionary Organization) who handles less than $500,000 per annum. This AFT concept can also be adapted by  BLVRs  in their pursuit of  Righteous Personal Finance - RPF.
        This  ATF  system is designed to make maximum use of  "Internet Centric"  (or Internet Friendly) resources with a weekly processing/reporting emphasis. Or you weekly go Online to your Bank Account and/or Credit Card Statement and post such "After The Fact" transactions to older versions of the QBPro (QBs) computer software obtained out on eBay.  When you use this method you no longer need to reconcile your Bank or Credit statement to what you have posted.  You place all receipts into pre-defined QBuxBoxes  (Envelope if you please) and you spend only if there is money in that QBuxBox, etc.

04 - Simply a Web Online Site or an Online Ministry  (04)

    OK OK, I can hear you .... so what does this have to do with Ministry Finances, Jim.  But I am intrigued by the following statement and I trust that Ministries will learn from such observations.

        Businesses of all sizes are learning how to incorporate the Internet into a broader communication and marketing tool, or they are using their website to take orders, interact with customers, educate people, and promote their products/services.
        Many church web sites, on the other hand, are limited to STATIC information, such as a map to the church and a statement of beliefs.  Increasingly, churches need to determine whether they want to have an  ONLINE SITE  or an ONLINE MINISTRY.  Right now, it seems that most only have the former, if they have anything at all.

05 - Occasional Dealing with a CPA - Auditing Firm - (05)

From Onliner:  
     I am searching for a sample letter to use in bidding out our church's audit. We have not had an audit during the past 5 years.  I'm having a bit of difficulty in finding such a sample, and since your website at www.bcidot.org was very helpful, I'm wondering if you have a sample you could share?

 From JimRetCPA@bcidot.org
        Thank you for connecting up and your encouragement.  I do not have such a sample per se, but it seems that once you have decided what you want the CPA-Auditor to do (see options below) , then you would send them a letter that says something like:  “We need a CPA-Audit firm to do so and so (perhaps using some of the verbiage within the 0003-01 below); when would you be able to do it and how much would it cost?”    Below are some more link resources at  www.bcidot.org and some thoughts about a Church-Ministry occasionally dealing with an outside CPA-Auditor: 

  a>   Apparently your Financial Institution (due to their loan to you) does not need an annual financial statement as attested to by a CPA-Auditor.
   b>   Therefore you might retain a Church finance savvy CPA-Auditor in your general area -- go to this web site  www.ecfa.org  (under the Professionals tab) for a listing of such CPA-Auditors
   c>   Then emphasize the need to know if you have good operational grades ..... see content of 5128-77 below  ....especially “Financial Internal Controls” .... as listed within 0039-01 below.  Usually that is what a Church-Ministry really needs to know ... namely, are we handling our finances as we should be, etc.
    d>   Not emphasize the need for presentation of financial statements per Generally Accepted Accounting Principals (GAAP) via an Audit or Review attestation effort -- see content of 0003-01 below.
    e>>  In my view, sometimes a year end Compilation (see 0003-01) and an amplification of a CPA’s Management Letter via the content of something like 5128-77 is most helpful.   This way a Church-Ministry can obtain a third party opinion of their financial operational issues and discover how to correct any weaknesses. 
    f>>   You would then appoint two or more Internal Auditors (usually from your Finance Committee) to monitor at least the correction of such acknowledged weaknesses, etc.  See portions of 0113-01 below. 

          http://www.bcidot.org/all/0003-01.html        (Audits)
          http://www.bcidot.org/all/0004-01.html        (GAAP)
          http://www.bcidot.org/all/0039-01.html        (Financial Internal Controls – Ideals)
          http://www.bcidot.org/chu/5128-77.html      (Grades by an Auditor re Church Finances)
          http://www.bcidot.org/all/0113-01.html        (Internal Audit Committee)

06 - Issues re viewing Jim B's Desktop - (06)

    As most of you know, in serving Christian Ministries remotely via www.bcidot.org  (Ministry Finance Helps), we work with reps of such groups whom I reference as Onliners.  One of the very helpful resources in this effort is for the Onliner to join me in viewing and discussing the contents of my Computer Desktop. This is especially helpful in assisting Onliners with "how do I" issues (like viewing a sample Quickbooks file contents  on my desktop with sample Chart of Acct structure and then even together process some sample tranx) since both of us can use the Computer mouse. This is explained further in  0130.  
    My problem is that when I offer this within an interactive Email process, very few of such Onliners respond and connect up. Below are six possible reactions. I am interested in your comments as I would like to make greater use of this resource.

   1> I have successfully used www.GoToMyPC.com  and was pleased. I am willing to provide my email address to be used by Jim@bcidot.org as a reference to potential users.
   2> I have successfully elsewhere used  www.GoToMyPC.com
   3> I have used it and was NOT pleased
   4> I have not used it because I do not have the necessary fast online connection
   5> I have not used it because I am NOT comfortable remsotely connecting up my computer and its data with someone else
   6> I have not used it for other reasons that I will send directly to JimRetCPA@bcidot.org

Click below for Potentially Helpful Online Links for JIMs JRNL Readers      

         ECCU's  - Assistance in obtaining/preserving money for New Ministry Facilities ---- http://www.eccu.org/churches/storehousefund.php   
         ECCU's -  Viewing cleared checks online ---  http://www.eccu.org/downloads/CheckImagesFAQ.pdf
         ECCU's -  Short term investments - Money Mover --  http://www.eccu.org/downloads/money-mover.pdf
         Ten Common Mistakes in Choosing Donation software   ---    0001
         Online Giving Increase Information  --- http://www.churchbusiness.com/hotnews/58h2151422.html         
         Source of Planned Giving helps -- http://www.nationalchristian.com/ncf_home3.htm

This Month's links on   www.bcidot.org  Web Site:

    As some of you know, I have, since 1999, been placing  xxxx-xx  web page links into www.bcidot.org . Below are some links for this month that I believe warrant sharing with you. I appreciate your continued prayers for the relevancy to readers of these  xxxx-xx  web pages.

Name                                                                        Web Page xxxx-xx Link

    School Acct Rec (Schar) Truisms                                       http://www.bcidot.org/schar/7010-01.html  
    Ministry Finance Team Information                                      http://www.bcidot.org/all/0000-99.html
    Ministry Finance Reporting                                                 http://www.bcidot.org/all/0084-01.html

Current "Ministry Finance" Truism

    Below is one of my Ministry Finance precepts/beliefs/principles, or  "rules of thumb". Please go to  0069  for a complete TRUISMS list.  QUOTE:   Financial Reports worth preparing should be worth reading and understood by those who should know!