Current "JIMs  JRNL" Edition
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- - And the Lord direct your heart in the love of God as you continue to faithfully serve Him - -

         TO:  Interested Onliners                                                                                                                 FROM: Jim Bramer, Retired Auditor-CPA                                                                                                                                                               
J I Ms  J R N L for the month of September 2008                                                            FILE:  0209-08/jrnl        
 (Click Here for "Blogger like" perspective/rationale)      

01 - "Thou Shalt" and "We Shalt"  Ministry money issues  (01)

          A Ministry is responsible for "WE SHALT" monies, or the Board of Leadership decides how to use General Purpose Fund (GPFund)  financial resources.  Also see other  "Board Discretionary, or Board Designated"  items below.   But acceptance of "OBLIGATORY" monies indicates that the Ministry must administer "THOU SHALT" funds. Ministry Fund Accounting is the science of handling such "OBLIGATORY" monies, or a Ministry must responsibly handle abnormal operating funds. Such issues have been around for a long time. See the "Obligatory" special purpose money found in II Chronicles 34:9-11; or note the paraphrased portions below of "II Kings Chapter 12":

     The Temple was still in disrepair, so the King said to the Priests: "Why haven't you done anything about fixing the Temple?  Do not use any more of those receipts for the usual operating needs, but from now on use it to get the Temple in good condition."
      So the Priests set up a special "Repair Fund" by making a hole in the side of a large chest and they set it on the right hand side of the alter at the Temple entrance. The doorkeepers put the people's contribution into this chest and this money was used just to repair the Temple.

         We have concluded that the best  Fund Accounting  term for such responsibilities is "Special Purpose Funds --SPFunds." Note below some of the SPFund terms we have encountered during our span of some 50 years in dealing with such matters.    Dedicated Funds; Spoken For; Strings attached; In/Out, or Nout  (short for "in/out" accounts --- get it ???); Restricted; SetASide; Designated; Trust Funds; TO FROM; Directed Gifts; Encumbered.
OBLIGATORY" matters include liabilities for monies owed to debtors or outsiders; such as: Unremitted withheld and accrued payroll taxes, Unpaid bills to vendors, prepaid revenue and unpaid installment Equipment and Facility loans. 
But  "
OBLIGATORY" elements regarding SPFunds  are different and usually have three common elements:

     1>  Donor Restrictions (we prefer the term "preferences') for Ministry Board pre-approved Ministry purposes, etc.
     2>  Board Designated that includes such things as:   Prior Year
GPFund Gain/Losses and Assessments to the GPFund  for named SetASide Purposes.
     3>  Often Ministry Self Funded Activities  are SPFunds -- examples are:  Church Vacation Bible School (VBS) ; AWANA:  certain Sunday School events or activities; Group group and Youth activities; Sports activities etc.  Often a portion of these Self Funded Activities is funded by the

02  -  Weekly Spending Controls issues at Small Christ-Centered Entities (02)

        I am sure you agree with me that it is essential to control one's spending ... be it at a Small Christ-Centered Ministry , Small Church or for each Christian Family Unit.    If you are a small entity who handle less than $99,999 per annum,  I trust that you are doing the necessary money record keeping so that you are able to do this.    In my opinion, too many are attempting to control their spending by looking only at the result of what has flowed through their  Bank account  ( we accountants call this the "Cash Basis" method of accounting).  Or you are NOT considering the buying that you have NOT yet paid for.  We accountants call this the "Accrual Basis" of accounting.
        Since you MUST control "all of your spending," you obviously need to know not only what has passed through your Bank account, but what you have not yet paid for,  etc.    Going to this "Accrual Basis" of accounting (the emphasis here has to do with expenses only - not income per se) sometimes can be a chore, but quite important. Such a process can embrace such matters as the following as you:

  •   Have a weekly transaction processing and reporting thrust

  •   Have virtually no charge accounts at multiple vendors - or you buy everything possible via the single Plastic provider.  Deal with a single vendor, as necessary, you pay them ASAP

  •   Manually write our few checks, or there is no need to write check via the computer, or type checks, etc.

  •   Make full use of such money record keeping computer systems as QuickBooks, Mvelopes, or Quicken

  •   Go to the Internet and access (and perhaps print out) Bank account transaction information

  •   Go to the Internet and access (and perhaps print out) Plastic transaction information

  •   Go online and weekly pay off the Plastic account balance

  •   Electronically move Bank (maybe Plastic) transaction data to your money record keeping software. If this is not practical, you manually post such transactions into your system.

  •   The weekly Plastic payment appears on the Bank statement, so you report only the Bank transactions and not worry about also reporting unpaid Plastic bills.

  •   Since you function weekly, there is no need for you to compare any inputted transactions to what has cleared, etc. Or you do NOT go through a reconciliation process and deal with "deposits in transit" and "uncleared checks".

     With these issues and Small Entities like the above in mind,  please Click Here and examine the FinFax accounting system

03 -  Seven Ministry "Fund Accounting" Goals or Objectives (8)

          Many Ministry Bookkeepers  (especially at Smaller Churches and/or Missionary Organizations)  have little formal accounting training and we as CPAs and related professionals MUST  take every effort possible to make their effort complete and yet as simple as possible.  Please  Click Here  for some Fund Accounting  perspective.  The seven steps that follow accomplish much of this.    

01 - Pooled Bank accounts

          A Ministry should  not  have separate Checking/Savings Bank Accounts for each Fund or Fund Group. All non General Fund monies must have Board approval; Church Sunday School Classes (or like Auxiliaries) are not  permitted to have their own Bank accounts;  The Board is always in charge - no  "Pass Through"  of money is allowed without Board approval as they make sure that all money is used for the Ministry's pre-approved purpose.  When a Ministry functions from a Pooled Bank Accounts approach it requires less bookkeeping chores,  plus the Ministry should earn as much "Interest Income" as any good steward.   Please  Click Here  and   Here for more details on this topic. 

          02 - Readily know the balance in each Fund

          The system needs to be designed so a Ministry can view its periodic Balance Sheet report and see the balance in each Fund or who belongs to pooled Bank Accounts - or Net Assets.  Please  Click Here for more Info. 

          03 - A single entry does the job

          You establish your Fund Accounting system so that a single transaction entry provides you with what is needed. Or you make as few Journal Entries as possible to accommodate the peculiarities of the Fund Accounting process.

         04 - Ease of setup and viewing of internal Financial Reports

          Your bookkeeping software ideally should provide you with the ability to go to its "Chart of Account" listing (Like that provided by QuickBooks - QBs)  and you easily gain access to all of transaction details within that Fund.   From there you design/produce 'easy to access" repetitive reports that meet your Fund Accounting reporting needs.

         05 - Spending Control (yea, Budget) capabilities

           It is essential that all "Decision makers" timely have Spending Control (Budget) information.    As for each "Special Purpose Fund",  conclusions are almost always arrived at from the available Fund Balance - seldom from line item info.  However,  in the  "General Purpose Fund",  action is determined by individual Expenditure line item "Actual to Budget" data, etc.  Click Here for information about an alternative to the usual line item Budget process.

          06 - Fund Balance "Carried Forward" Issues:

           As to Fiscal Year end features --- the computer accounting system needs to be able to accommodate such things as the following: 

      a>  The  "General Purpose Fund"   does have a Fiscal Year only annual emphasis; Example --- --  unused authorized annual budget amounts for this year are not  carried forward to the new fiscal year, etc. 
      b>  Each "Special Purpose Fund"  almost always does not have an annual (Fiscal year) emphasis as their Fund Balances are carried forward to future years.

         07 - Condensed or One-Page overview financial reporting

          The Ministry leaders (and/or decision makers) should, at least monthly,  be provided with a condensed (Click Here and see an Example) key item financial report of the entire endeavor.   Usually your accounting software (like QBooks) can not  provide such a condensed report, so it comes via an easily updated, but  manually produced,  Excel document.   This should include a Ministry's fiscal year-to-date recap of all of its  Income and Expenditures  - including "General Purpose Fund"  Actual to Budget data,   And then a current month end status report of its condensed Assets, Liabilities and Fund Balances.  Please Click Here for more information.

04  - Large restricted Estate Monies coming to a Church        (04)

        Below are some thoughts that I trust a Church's Board of Leadership will find helpful as they care for the significant responsibility of handling large  ($100,000 or more)  restricted Estate Monies coming to them.     

  •       Get a clear definition of the deceased's intention as to using this money for their stated purpose.  Example:  "To Fund 'Missionary Endeavors'".  Thoroughly discuss with family members and the attorney who wrote this person's will ,etc.

  •       Obtain  council  from a Church savvy attorney; especially as to applicability for using portions of this Estate Income for operations and projects at your needy Church, etc.

  •       Get  Help from your  Church denominational 's  finance people.   

  •       Consider naming this Fund after the donor.  Your Church Board SHOULD appoint a "Quasi Endowment Sub Committee" with clear definition of duties that might include matters as:   -- Sub-Committee members to include a family member and Denomination rep etc. -- This Committee should be as transparent as possible -- Establish written "Missionary Endeavor " use and Investment Policies -- Follow the "letter of the law" as to "Use for Missionary Endeavor" purposes; especially re any local and foreign non denominational uses etc. --  May need some specific applications thereof; especially as to how the Church denomination does do this etc. -- Conclude any Sister church funding issues, etc. -- Retain  someone to manage etc. --- perhaps a denominational person, etc -- perhaps remotely -- ask us about more than one entity having Internet access to the accounting system, etc. -- This management person provides the Board/Committee with financial reports as defined that include the monthly value/changes of the investments, etc.

  •       Perhaps 10% (a tithe) could go now for the Church's current "Missionary Endeavor" purposes and the 90% balance be invested as a nest egg with the investment income of this nest egg funding the understood "Missionary Endeavor" purposes (getting the good news of the Gospel of the Lord Jesus Christ to foreign and local human beings)  

  •       Handle this "Quasi-Endowment" as if were a non-church separate legal entity via a separate set of books.  The Estate income comes to church - assets are placed in Church's name or the this Estate's checks are  payable to the Church who establishes and places said checks in a separate checking account of the Church.

  •       Non Cash portion of the estate is converted to investments that follow the sub-committee's investment criteria.  Ask us at  about Investments that do "Double Duty" -  I call them "Replicating" endeavors, etc.

  •       Perhaps become an affiliated member of ECFA ( that provides assurance that you are handling your finances in ways that please the Lord, etc.

Please see additional link content below:
                Endowment - Quasi-Endowment
                General Investments  etc           
                Separate set of books                 

05 - Weekly "Giving Unit" statistics  (7)

        It seems that Churches could benefit from weekly "Giving Unit" statistics that provide its leaderships with whole dollar and percentages (not by named Giving Unit)  that provides scope and size of Donation Income as set forth below.  Of course, much of this could be '"fodder"  for applicable charts that readily depict weekly trends, etc.


GivIng  to

% of

Giving to

% of

Total wkly

Number of Giving Units Involved who gave:



Percent of

Total and/or




Giving Total



$5, 000 Plus

Percent of Total

This Wk















  Next Wk
















06 - Click below for potentially helpful Online Links for JIMs JRNL readers:      

1 - ECCU - Straight Talk on Giving    2 - IRS - Tax guide for Churches    3 - IRS - Housing Allowance   4 - ECFA - Contribution Policy    5 - Getting through the Money Maze  6 - Christian Computer Magazine online publication

07 -  Monthly Editorial - "For What It is Worth"  as rendered in November 2005  --     Polling by Email.

08 - Current "Ministry Finance" Truism (2)

    Below is one of my Ministry Finance precepts/beliefs/principles, or  "rules of thumb".    Please go to  0069  for a complete TRUISMS list.

    "RESTRICTED FUNDS -  such money restrictions come from both "Donors" and the "Board of Leadership".  Status of these up-to-date financial facts MUST be known daily.

          09 -  Prayerful Thots :  

       Thank you, Lord,  for the following challenge from one of our Pastors:  "We must grow in God-centerness; selflessness; high view of Scripture; appropriate perspective of the Gospel; Spirit empowered obedience and service; a vibrant love for the Church; a burdened love for lost mankind; and an adoringly exalted view of the Savior."  Indeed, oh Lord !! 

     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 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:   ----    Caution --- the non  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  Lists of our  articles (or Web Docs), can be found at  9707 and  9708

Below is probable "Ministry Finance Lingo", or "Frequently Used Vocational Terms" used herein.

            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 TeamQBOE = QuickBooks Online Edition;  QBooks or QBs = Quickbooks; RPFin 
= Righteous Personal Finance , SPFunds or SPFs = Special Purpose Funds


   Click Here  for an alphabetical list of topics within recent JIMs JRNLs  Editions    - Contact 

This document was updated last on:  November 15, 2010