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         TO:  Interested Onliners                                                                                                                 FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                        
   
         RE: J I Ms  J R N L for the month of October 2005                                                                           FILE:  0210-05/jrnl        
                (Click Here for "Blogger like" perspective/rationale)      

FR: Onliner Pat:
        You recommend that we concentrate on the important finance matters before us as a Ministry. Please elaborate, Jim.

FR: JIM (Bramer):
        Recently my wife wrote me a note; the words in the note contained 'i's and 't's. But, since I knew exactly her frame of reference, she did not worry about 'dotting' the 'i's or 'crossing' the 't's.  My  MFTeam  analogy, Pat, is that sometimes we get lost in all of our financial report numbers and statistics (dotting the ;I's and crossing the 't's) and we do NOT concentrate on the important 'stuff' they are telling us.  You might remember my use of the acronym "MIFI."

FR: PAT
        I agree, Jim, as a MFTeam member, I want to use these numbers as 'fodder' for making timely and good Ministry decisions. I believe I know what you mean, but remind me once again the use of the term "MIFI".

FR: JIM
        OK, Pat. MIFI stands for M)ost I)mportant F)inancial I)ssues in the life of the Ministry. It is imperative that the MFTeam concentrate on these MIFIs and not get side-tracked by the least important.

FR: PAT
        I hear you, Jim ..... and I agree. Please help me as a Ministry leader to do this. Please remind me again, from your perspective, just what are the major responsibilities of our MFTeam?

FR: JIM
        An excellent place for the MFTeam to start on this topic, Pat .... the MFTeam responsibilities include at least the following:

                                                             Finance Communications

        Financial information MUST be timely and be understood; MFTeam members must know appropriate Ministry Finance activity and status history in order to make rightful decisions. Much of this is accomplished by making use of efficient computer finance systems and/or tools. Please link to  Sample Financial Statements.
        MFTeam meetings MUST contribute to effective Finance Communications. Prepare in advance; insist that finance issues be forthright, and that decisions are well documented and clearly understood.

            Mutual Expectations

        Be certain that all MFTeam members understand and accept their specific finance responsibilities. Be sure nothing 'falls between the cracks'.  Please link to  Tasks  for a laundry list of most of such tasks.

            Finance Policies and/or Procedures

        I believe that the MFTeam must conclude and write down Financial Policies. By the way, I like to define a "policy" by what you 'always do ' or by what you 'never do ', within a certain set of circumstances. When appropriate, such matters can be preceded by some written perspective or philosophy on the issue under consideration ----- hopefully all such policies end up in a 'Finance Policy Manual'.  Please link to  Sample Financial Policies  for a means to initialize such an endeavor.

            Operate within your Income

        The MFTeam must see that Ministry Income is obtained in order to meet the necessary Ministry Expenditures. Then see that each Ministry "Dollar Accountability Group"  lives within its income. Please link to a  Sample Actual to Budget report.  Please go to  0010  for more Ministry Budget info.

            Finance Credibility

        Keep financial promises with staff and vendors;  plus have and maintain proper financial relationship with Ministry constituents.  Know and honor the required IRS and other governmental requirements.

            Provide Resource Enhancement/Safety

        Fiscal resources should be protected.  Establish and maintain appropriate financial internal controls.  See that residual assets are prudently utilized and invested.  Use credit advisedly, pay your debts as agreed.

FR: PAT
        Aha, if we are going to be an effective MFTeam, it looks like we have our work cut out for us!!!

FR: JIM
        That’s true, Pat, but be sure and delegate to the staff as much of the 'grunt work' and 'transaction processing' as possible.
        Your MFTeam Chairman should learn to know what is most important. Further, in my judgment, your MFTeam minutes should clearly state and rank your MIFIs. Link here to a MFTeam meeting time allocation analysis that might assist you toward spending quality MIFI time at each of your meetings. 
        Also encourage your Board of Leadership to have periodic "Long Range Planning" sessions so you can integrate related financial aspects.

FR: PAT 
        Thank you, Jim. Like you, I have attended Board or MFTeam meetings where we seemed to have a 'micro-manage' mindset and often did NOT view the current and anticipated "big picture". I trust we can use some of this material to  'jump start'  our MFTeam so we appropriately deal with our MIFIs

     Donations come into the Ministry for restricted purposes; they are to be used for a stated approved Ministry operational purposes. Sometimes money is set aside by the Board of Leadership (Board) for specific purposes --- or there is a designation of "internal" funds.   Please go to  0070   for some more perspective on what we call SPFunds. The info shared at  0094  might also be of value.
     A related issue is that some SPFund money is handled for Ministry Activity Operations and Reimbursement. Please go to  3444  for more specifics.
     Of course, being good stewards of these "Special Purpose" fiscal resources gives rise to the whole 'Fund Accounting" issues that Ministries must address.

GENERAL PURPOSE FUND - GPFund

     This, of course, is the accounting (management) for unrestricted monies given for the general regular operations of the Ministry. This Board discretionary income is usually under some type of expense "line item"  Budget control; as apposed to "if a SPFund has a balance, we can spend it" control.   You will note that GPFund is singular, while SPFunds are plural.
     Please go to  0002  and discover what is said about expense control alternatives to the above "line item"  budget control method. Especially the practice of immediate assignment of GPFund discretionary income to expense areas in order of expense priority. If no money to assign, then no balance to spend, etc.

COMPUTERIZATION RE FUND ACCOUNTING - Chart of Accounts

     Computerization of Fund Accounting is usually wise. Please access  0601 for information about using the desktop software product known as Quickbooks ™ (QB) to do this. Also go to  0801  for information using the Quickbooks Online Edition via the Web (QBOE via the Web) software via the Internet.
     Please go to  0069  for more info about Chart of Accounts structure for Ministries like: Churches,  Christian Schools, Mission Agencies, Christian Conference/Camps or any any other Christian Ministry.

MANAGE YOUR BANK BALANCES

     Many Ministries often insist on having a separate Bank Savings accounts for SPFunds so that such assets can be 'married' up to the respective SPFund. We embrace heartily the need for "SPFund Integrity"  with as little inter-fund borrowing as possible. The understood intent is to insure that "my SPFund money does not get spent for some other purpose" --- especially if the  GPFund is "lagging behind". 
     But a  'whole bunch'  of Bank/Savings accounts is administratively a MESS. Please remember that a related objective is to "Manage your Bank Balances" and obtain the maximum yield from all Bank accounts; never unnecessarily leave money in an account that does NOT bear interest or substantially reduces your Bank Service Fee Expense.  Please go to  0006  for more information on this topic.

ONE PAGE FINANCIAL STATEMENT

     Please go to  5022  for a sample "One Page Financial Statement"  that gives you a 'Big Picture" view of your overall finances as it recaps the normal operations of the General Purpose Fund and the Special Purpose Funds --- plus a separate high profile unusual Building/Construction endeavor.

                Online Giving resource ---- http://www.e-giving.org/
                QuickBooks Online -  free for Non Profit Organizations  --- http://oe.quickbooks.com/nonprofits.shtml
                Article on Ministry Fund Accounting  ---  http://www.churchbusiness.com/articles/0c1comp1.html  
                Online Backup Services  ----   http://www.pcworld.com/reviews/article/0,aid,121970,00.asp 
                Crown Ministries and their new Envelopes Budget software endorsement ---      http://www.crown.org/newsletter/default.asp?issue=332&articleid=433&MemberID=396870      http://www.crown.mvelopes.com/
                Evangelical Christian Credit Union (ECCU) new Investment Company ---   http://www.churchbusiness.com/hotnews/52h8115441.html    
                Church Internal Financial Controls are essential  ---  http://www.churchbusiness.com/articles/381feat1.html    
                United Methodist Local Church Audit Guide ----   http://www.gcfa.org/FinalLCAG.pdf                                       
                ECFA (Evangelical Council for Financial Accountability) Qrtly publication --- http://www.ecfamembers.org/pdf/Newsletters/FOCUS_3Q_2005.pdf
                2005 Church Mgt Software charts/grids by Nick Nicholaou (Nick@mbsinc.com)  -- http://ccmag.gospelcom.net/1005/1005coverstory.pdf
                Estate Planning - Retirement, etc - via Biola University . ---  http://www.giftlegacy.com/plgive_donor_story.jsp?P=6&WebID=GL2004-0102