TO: Interested
Onliners or Ministries
FROM:
Jim Bramer, Retired CPA-Auditor
FILE:
0211-02/jrnl
RE: J I Ms
J R N L for the month of November 2002
Originated: November 2002
PURPOSE: To contribute to making your Ministry Finance Team more effective:
This process allows me to share some rather personal comments/thoughts (and sometimes written Prayers) about Ministry Finance issues during this month of November 2002. Please go to 0200 for further explanation and links to earlier JIM's JRNLs. The four digit links xxxx below come from www.bcidot.org . See list of Frequently Used Vocational Terms at the bottom of this document. If you would like to receive the current 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 in these JIMs JRNLs; do NOT imply my endorsement per se. Further, if any of the links below do not work, let us know which one at LINK@bcidot.org. Incidentally, our more recent www.bcidot.org links (Web Docs) can be found at 9710.
Click on the topic below and go to the day it was mentioned.
- Auditor/CPAs - Ministry savvy list
- Church Management Software - CMS - matters
- Computer at Home - possible tax deduction
- GAAP - Generally Accepted Accounting Principles
- Gift Annuity rates, etc.
- Housing Allowances and Clergy
- Husband and wife work at a Ministry - one gets compensation, etc.
- Internal Audit Committee
- Mileage Reimbursement and IRS rates, etc.
- Nonprofitbooks - software endorsed by QuickBooks
- Paycheck computation Online
- Righteous Personal Finance matters
- Scrip and Unrelated Business Income, etc.
- Summerfield, Frank, Attorney and CPA
- Virtual Envelope and Personal Budgets
- Task Assignments vs Job Description
- Writing a check on Donor's Bank Acct - EFT systems etc
Someone at a Church has made known a Job Description of their Internal Audit Committee; you will also find info within 0113 and 0038 of value along these lines. In 0074 we have taken a slightly different approach to Jobs, or Tasks, at a Ministry. You will note that we have listed the Tasks and then provide assignment columns. Of course, you personalize this to your exact situation. This enables the Ministry Finance Team to initially concentrate on the things that need to be done, or tasks, and then assign them to the appropriate entity or individual. I hope this helps. By the way, go to 0091 and get a feel for how this old codger handles tasks.
Many of you use your Computer at home for Ministry. If it has some regularity (like a Church Treasurer using their Home Computer only) then please take note in 0092 of how I believe you can get a tax deduction charitable contribution. Or, realistically be reimbursed via the Ministry's budget without tax reporting requirements .... kinda like what we talk about at 0076 and the vehicle reimbursement per the IRS mileage rate, etc.
Do you manually go to the IRS and State tables and compute your paychecks? If so, please Click Here and be aware of an Online paycheck calculator resource. I believe certain features of this service are free and could be a real blessing to you.
I recently spent time with a Crown Ministries. volunteer/representative. Please go to 4999 for a list of other groups who help the individual Christian be righteous in handling their personal finances. One of the things we discussed was the use of Envelopes (you know, if money is in an envelope you have money to spend, etc.) as a alternative to a formal budget. A discussion topic was a Virtual Envelope format as it applies to all the ways we spend our money, not just cash. Please go to 0917 where we share some convictions on this topic. By the way, I trust that Churches are providing Personal Finance Management resources for their people. See 5005 for a Church Finance Policy reference to this.
Let's take the following scenario: Tim is a full-time staff member of a Ministry - let's say one of the Pastors at a Church. His wife Judy has some regular Ministry responsibilities that usually the Church hires someone to do, but Judy receives no compensation. Both Tim and Judy should have authorized budget for their respective Church costs, but many times Judy has to spend her own money. My preference is for Judy to have the Church write a check out for Judy's costs so the amounts are known and, in essence, are approved by the Church Board. By the way, read 0092 as to use of Home Computers for Ministry. If the check is payable to the Church then it is processed as a Donation by Tim/Judy. If it is payable to Tim/Judy, then this family determines what to do with it. I realize this often happens, but It is incomplete, in my judgment, for these amounts to not show on the Church books as expenses.
Using the computer effectively as a tool at a Ministry is essential. At churches they refer to this as CMS - Church Management Software, or System. In 0921 I discuss the "compartmentalization" of the use of CMS between the essential people information and the needed financial accounting system -- with the appropriate blend. Please also go to 0645 where I dialog with LEE with regard to a review of various CMS products and that the review does not mention the widely used QuickBooks product. The author has kindly advised me that the review was limited by the publisher and others to CMS "Stand-Alone" products and they purposely have excluded generic products like QuickBooks and others. This exclusion is too bad because a number of Ministries effectively use generic computer products like QuickBooks to do their Ministry Finances. Please Click Here and Click Here for Links to other known Church software reviews or articles.
Mr. Frank Sommerville is a Texas CPA and Attorney who specializes in meeting such needs for Churches and Christian Ministries. He regularly is a tremendous Online resource to those of us who have subscribed to the ChurchAdmin Free Yahoo Group: Please Click Here for more information about Mr. Sommerville.
Scrip is a fund raising mechanism - see 0101 for more information about Scrip. Questions have come up about the prospect of this endeavor being taxed as Unrelated Business Income (UBIT). Contact me at 0211-14@bcidot.org if you need more info.
One of the significant tax benefits to the clergy is their Housing Allowance. I have not followed this closely, but apparently in calendar year 2003 the amount can not exceed the house's "Fair Rental Value." Please Click Here for some references --- our website includes this 0016 Clergy tax info.
In 0907 and 0072 we make reference to Ministries getting permission to in essence write a check on a donor's bank account. This is especially helpful when someone at a Church makes a pledge to some special endeavor, like a Building Program. The Church takes the action not the Donor. Please Click Here for access to one of the many Online resources available to accomplish this.
I am seeing quite a bit of discussion out there about the use of Nonprofitbooks. My impression of this QuickBooks endorsed product is that it is designed to meet the needs of Non Profit Organizations who must file annual IRS form 990 information returns. In 0919, and via a recent Email to an Onliner on the topic, I tried to highlight what follows: 1> It has a non church emphasis since churches do not file annual IRS forms 990; 2> Use of this product forces the church to unnecessarily meet GAAP (see 0004 for more info) requirements DURING THE YEAR; 3> Fund Accounting is complicated enough, it is best to wait until the end of your fiscal year and then do the necessary complete GAAP reporting at that time, etc.; 4> Churches do NOT make management decisions based on “Functional Expense” accounting/reporting required by GAAP; and your accounting/reporting system MUST meet the needs of internal decision-makers as set forth within 0031.
If any of you have a Planned or Deferred Giving program that involves Gift Annuities, I trust when you click here you will find the information helpful as you set your life time Gift Annuity rates.
Having a Ministry savvy CPA-Auditing firm is important for Ministries that are particularly supported by the Christian public. Click here and see a list of such firms that have been allowed to make themselves known via Christian Management Assn. I trust you also find 0003 helpful as you conclude the type of CPA-Audit you need, etc. For those of you in Illinois, Click here for info about a volunteer CPA group available to Non Profit Organizations from this source:
Frequently Used Vocational Terms:
CMS = Church Management Software/System; GAAP = Generally Accepted Accounting Principles/Practices; GPFund or GPF = General Purpose Fund; MFTeam or MFT= Ministry Finance Team; QBooks or QB = Quickbooks; SPFund or SPF = Special Purpose Fund
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Click Here and go to a list of earlier JIM's JRNLs - Contact JimRetCPA@bcidot.org
This document was last updated on: December 08, 2006