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 TO:  Interested Onliners or Ministries                                                                                             FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                      FILE:  0206-04/jrnl
   
 RE: J I Ms  J R N L  for the month of June 2004                                                                                                      Originated:  June 2004  

PURPOSE:  To help your  Ministry Finance Team  be more effective:

Phiscal Philosophy - Policies (1) - 0052-01   

   That's right, I meant to spell it "Phiscal" --- I know it really is spelled 'Fiscal', but after all, it sounds like the beginning of "Philosophy", doesn't it? By the way, my dictionary tells me that fiscal means: "Having to do with finances, treasury, funds, or that good old English word Exchequer." I'm using the word "Philosophy" to mean: "an expression, or statement, of what we believe on a given subject; a system of principles that guide us in carrying out an objective".  Hence, this article's purpose is to help you both define and determine what you and, ultimately, your mostly Non-Church Ministry believes about such issues as:

  A. How money is to be obtained for the Ministry, I prefer to use the term "Fund Gathering", since you strategize to 'gather' it and not 'raise' it.
  B. Finance policies (yea, rules and regulations) as the Ministry becomes steward over such financial resources.   

		Sample of Phiscal (Fiscal) Philosophy Expressions
						Yes	Maybe	No
1.	The Lord is the source of all the Ministry's money and financial assets
	and they all belong to Him, we are stewards, or trustees, over monies
	entrusted to us by our constituents and the Lord will ultimately hold us
	responsible for their use.					___	___	___
2.	We are part of His ministry and the Lord is not poor.  He will supply the
	financial needs of His endeavors.  We should only tell the Lord of the
	Ministry's financial needs and NOT communicate such needs by spoken
	or written word to others.					___	___	___
3.	We adhere wholeheartedly to the preceding 1st sentence.  We, can,
	however, be used as the Lord's vehicle to inform others of various financial
	needs in His ministry. We should use every discrete means at our disposal
	to make these things known.					___	___	___
4.	Hard sell at it's extreme is a "1" and is defined as "always asking for
	for money;" Soft sell to an extreme is a "10" and is defined as "Never
	asking people for money." Our desire is to be perceived by our constituents
	as a number:					-- _____--
5.	Since the Lord owns everything, we believe that funds should be gathered
	from all sources: Christian and Non-Christian.  This includes all interested
	Foundations.					___	___	___
6.	We desire to discretely have access to people via mailing lists. We want
	to both convey "Non-financial appeal" news and make financial needs
	known to all constituents in this way. The approximate number of times
	that we expect to make such appeals per year are:					--- _____---

		Sample Statement of Financial Policies
						Yes	Maybe	No
A>	All donors and staffers must understand that money
	is given to the Ministry and subject to the absolute control
	of the Board. Such statements should be on all relevant
	literature. There will be times when donor preferences
	(designations) should NOT be honored. If this is required,
	steps will be taken to give "No appearance of evil" in the
	eye of the Lord and the Donor.					____	____	____
B>	All financial dealings to be done with integrity and
	to honor the Lord. While we may not be an actual member
	of the EVANGELICAL COUNCIL FOR FINANCIAL
	ACCOUNTABILITY www.ecfa.org  , our standards will
	equal or exceed theirs.					____	____	____
C>	It will be our policy to borrow money for the necessary
	equipment and buildings as would be done by a prudent
	business man. We do NOT always adhere to the premise
	that all money must be gathered before we proceed on
	these issues.					____	____	____
D>	We believe we should carefully use an agreed portion
	of our current income to provide for the future in the form
	of Deferred or Planned Gifts.					____	____	____
E>	All financial mailing lists of our Ministry representatives
	are to be jointly owned by the two and are to be used
	as determined by the Board.					____	____	____
F>	The staff handbook is to carefully set forth the financial
	understanding with each representative as to their
	responsibility for "Fund Gathering," as applicable.					____	____	____

       As discussed in depth within  0066 ,  you need to have financial controls as to Ministry expenses and their payments by check.  Here are some principles: 

• Expenses need to be pre-authorized;
• Within these constraints, an official buys something;
• An unrelated person pays the bill and produces a check;
• Two independent officials sign the check --- each view the various buying documents and;
• The last one voids them so they cannot be fraudulently re-used.
• There are regular "Budget to Actual" reports in order for the right officials to monitor what HAS ACTUALLY HAPPENED as compared to what SHOULD HAVE HAPPENED.

    There should prudently be 'more', rather than 'fewer', people involved when you are acting as a financial trustee and disbursing someone else's money; this way people are checks and balances on one another. Further, it takes more people to get into collusion and do something wrong.
     The references below to Online Payments mean that Net Pay is automatically deposited to the Staff member's bank account, or you use the Online Banking features to electronically pay applicable repetitive checks (see Same each Month below) which automatically go to the named vendor's bank account.  In the example below, the Ministry decided that all checks of $1,000 or more require two signatures.  I trust you find of interest the types and volume below.   

								Jan thru
......Checks ......		January	%	February	%	March	%	Mar	%
Online Payments:
Net Pay		10	7%	10	9%	10	7%	30	7%
Same each Month		20	14%	20	18%	20	14%	60	15%
Signed Manually:
Up thru $1,000 -Single sig		105	71%	69	66%	105	71%	279	68%
Over $1,000 - Two sigs		13	8%	17	15%	12	8%	42	10%
Totals		148	100%	116	100%	147	100%	411	100%

        Your Board Members are very savvy people, but most are not accountants; however, to function properly, they must have an understanding of Ministry finances.  The Ministry Finance Team - MFTeam  should make corrections if any of the following questions re Ministry financial reports are answered "No". Do your present financial reports:

•     Allow a Board member to quickly know if the Ministry's income is meeting it's operational expenditures?
•     Provide information so this person knows "where the Ministry should be" in relation to financial targets?
•     Give you comparative data so the financial "trends", or directions, can be observed?  
•     Meet Board member's needs as to where the financial resources came from and where they went for a period of time?
•     Reflect the understood status of financial resources and obligations as of a certain point in time?
•     Provide such needed info on a timely and regular basis?

    In the web pages found at   0114   and  2039  we recommend that you have a Plastic buying system, or you use -- as a purchase order system alternative -- Credit cards to control staff and volunteer buying.  CAUTION:  Please comply with the following:

>> The Ministry should NEVER pay Interest charges to its operational Credit Card -- or the balance of this Credit Card must be timely paid off each month
>> If the Ministry does not have enough money to do this, then immediately discontinue your Plastic buying and buy from available cash only.
>> Further, such a lean Ministry financial status probably means that the Ministry should utilize a finance system that immediately assigns the available General Fund receipts in priority order and provides buyers with weekly reports of how much, if any, they can now spend.. See  0002  and  0204  for more specifics.

•    The BLVR knows each week how much money they have in pre-determined Financial areas (QVE Envelopes) of their life.  The BLVR can make purchases if there is available money per the weekly QVE report -- see sample above.  If there is not enough money in said QVE Envelope to make the purchase, no can buy this week, etc.  The BLVR operates from the applicable Envelope balance -- not from the Bank Account Balance.

•   The QVE-Envelope system embraces purchases by "Credit Card" as well as by "Check."

•   A BLVR could partner with a Internet Onliner HLPer who insures that the QVE-Envelope System is functioning as it should within context of the BLVR's RPFin.

•   The BLVR and the HLPer make full use of applicable Internet features and tools. 

•   This could include the use of Online Banking where bank transactions and Credit Card data are electronically placed into the QVE-Envelope system.

•   This could include the use of Online Bill Management resources - see 0926 for more info.

   (1)  Set up more QVE Envelopes only if really needed to control more detailed spending

--- JARs, Envelopes or Boxes in the Cash only OLDEN DAYS ---

    Do any of you identify with the following?  In the OLDEN DAYS we would take the green stuff and coins that we received at payday and physically place agreed amounts into jars, envelopes, or boxes .. which I will call JARs. We had a JAR for each category of  'HOW ARE WE GOING TO SPEND OUR MONEY' ... JAR examples included: 

• Tithes/offering,

• Food and Supplies,

• Lodging - rent or mortgage/taxes,

• Transportation,

• Rainy day or Emergency need,
  Kids schooling, and 

• Everything Else

    After dividing up our periodic receipts into these JARs, we took the money from the appropriate JAR and paid the bills ...... if there was any money left in a JAR, then we were within our Budget. We established certain 'rules' for borrowing between JARs to insure a pay back --- or how to handle an agreed grant from the one JAR to another.   Some of us still handle our cash receipts like this.