Mission Agencies Fin Policies Q & A     8502-01 ZZmis

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                  TO: Interested Mission Agency                                                                                            FROM: Jim Bramer, Retired CPA-Auditor 
                                                                                                                                                                         FILE: 8502-01/mis

                   RE: Financial Policies Q & A                                                                                                 ORIGINATED: Aug 1994


   The objective is for a 'Publicly Supported Ministry' to conclude and write down Financial Policies and be sure they are authorized and in the Board Minutes. 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, a policy matter 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'.
   However, I am aware that the preparation of a
'Finance Policy Manual' is not always done, even though policies have been concluded but not written down. Certain Finance Topics/Issues presented below are done in a format so that answers allow policy determination, and, hopefully, this will function in lieu of formal Finance Policy Manual. Of course, it is important to have Missionary/Staff finance methods and procedures - yea a Staff Handbook.


-             - TOPIC / ISSUE --                                                                   YES      NO      N/A

A. INCOME

    > As a good steward, be sure that all

incoming funds are under the maximum

Internal Controls. See 0039

____   ____   ____

    > We have concluded our Fund Raising

or Fund Gathering philosophy and policies

in a separate document. See xxxx

____   ____   ____

> We will accept designated funds in

compliance with understood IRS regulations.

____   ____   ____

< We will be sure that our finance system

allows us to conform to both our Staff Handbook

policies and IRS requirements.

____   ____   ____

< Any Ministry literature or tapes produced

by Ministry Staff becomes the property of the Ministry

Any possible Ministry Staff royalty or amount of 

Inventory or scope of such Inventory is to be concluded

annually.

____   ____   ____

< All Staff honorariums, particularly

those in cash or checks payable to the Staff

Member, are to flow through the Ministry.

____ ____ ____

< All monies not designated for specific

Staff/Projects (Board Discretionary Funds)

are to be managed righteously as would a

prudent person holding funds in trust.

____ ____ ____

< Fund Accounting;

     External designations will be honored so

such fund balances are known regularly.

Any regular borrowing of such funds will be

not be allowed.

____ ____ ____

      There may be Internal designations, or

Board authorized Set-A-Sides. Borrowing

of these funds may be permitted upon

authorization.

____ ____ ____

B. EXPENSE

< All of the following Staff Issues are

to be thoroughly covered in the Staff Handbook;

clergy status; salaries; housing allowances;

bonuses; social security; retirement; and such

benefits as medical and life Insurance.

____ ____ ____

< Staff ministry expenditures, or Minis-

try Expense Reimbursements (MER), are to be in

compliance with authorized project and bill

paying policy.

____ ____ ____

< General Fund (GFUND) Operations --

A Budget is to be authorized annually; subject

to possible mid-year adjustments.

____ ____ ____

< All Expense advances will be settled

within a 30 day period of time.

____ ____ ____

C. FINANCIAL ACCOUNTABILITY

< We will have an annual audit and

report on our finances by an outside

Auditor/CPA.

____ ____ ____

< We will have periodic examinations

and internal audits by the Board/agents.

____ ____ ____

< A part of our annual constituency

report will include a brief annual financial

report to clearly show, as a minimum, how much

came in and how it was spent.

____ ____ ____

D. ASSETS

< Cash

     Non of our cash deposits will be in a

un-insured account at a financial institution .

____ ____ ____

        Our goal is to earn the maximum

amount of yield on the maximum amount of

deposits for the maximum of time.

____ ____ ____

< Non-Cash

      We will book all purchase of

Capital assets over _______; we will

regularly inventory our Capital assets

for full accountability.

____ ____ ____

       We will not 'play the stock market';

either directly or indirectly; any stock gifts

will be turned into cash within 30 days of

receipt.

____ ____ ____

      Generally we NOT invest any of our

Board Discretionary Funds in anything but

insured deposits with financial institutions .

____ ____ ____

E. LIABILITIES

< Borrowing philosophy and limits;

Generally we will not borrow from

external sources; Credit Cards will be

paid within 30 days.

____ ____ ____

As would a prudent business man, we

may borrow (certain leases are borrowing) to

fund purchase of certain equipment or vehicles

____ ____ ____

As would a prudent business man,

we may borrow to acquire certain land or

buildings.

____ ____ ____

As would a prudent businessman, we

may borrow from certain Board Discretionary

Funds to acquire capital assets.

____ ____ ____

F. INSURANCE

> Periodically the Board will conclude the

amount of necessary insurance for:

        General Ministry Liability

____ ____ ____

        Specific Tangible Asset coverage

____ ____ ____

G. GOVERNMENT MONIES

> Payroll taxes to be handled in

accordance with understood regulations

____ ____ ____

> This Ministry will not accept or be

responsible for any non-payroll Federal, State,

County or local Funds.

____ ____ ____

H. DEFERRED/PLANNED GIVING

> Generally, no operational funds will be

used to operate a Deferred/Planned Giving

program.

____ ____ ____

I. AUXILIARY ENTITIES

     > Such entities are a subsidiary of ours

and subject to Board control and Tax Exempt

Status and regulations.

____ ____ ____

      > The activity in their separate

Bank account will be reported annually

to the Board for unified finance accounting

and reporting

____ ____ ____

J. BOARD FINANCES

> No conflict of financial interest item

shall be allowed any Board member.

____ ____ ____

> Annually a Non-Staff Board Treasurer

will be elected with written and agreed Minis-

try expectations. Generally this Board member

will NOT do the bookkeeping, but will concentrate

on understanding and communicating finance

matters to those who should know.

____ ____ ____

> There will be a Board appointed Finance

Committee that will be chaired by the Board

Treasurer or the Treasurer's appointee.

____ ____ ____

K. WHEN MINISTRY HAS FOUNDER'S NAME

       < The founder's salary, benefits and

other financial 'fringe benefits', including

personal use of Ministry assets, will be annu-

ally authorized by Board action to insure that

these matters are fully known to all Board

members 

____ ____ ____

     < Generally this above information will

be supplied to any Board qualified constituent .

____ ____ ____

     < The Founder's annual tax return will be

available to any Board qualified constituent.

____ ____ ____

< As with any Staff Member, the Board

will authorize employment of any Founder's

family member.

____ ____ ____

< The founder's name is NOT in the

name of this Ministry, but the above requirements

do apply.

____ ____ ____

FISCAL YEAR

< Our Fiscal Year End of ___________ is

after full consideration of the fact that

December 31 is generally a poor logistical time

to end a Ministry finance year.

____ ____ ____


      Please Click Here for a list having to do with Mission Agencies topics here on www.bcidot.org.   The bulk of this was originated August 1994 and was UPTD: April 20, 2010

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