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9. FINANCE COMMITTEE
The Finance Committee will consist of the chairman of the deacons, treasurer, assistant treasurer, and three members of the church elected on a rotating basis, one new member to be elected annually. The treasurer will serve as chairperson.
The purpose of the Finance Committee will be to plan, direct, and coordinate the financial activities of the church.
To achieve its purpose, the Finance Committee will:
1. Prepare and recommend to the church an annual budget to be adopted before the beginning of each year.
2. Administer the budget within the income of the church.
3. Recommend and administer the financial policies of the church.
4. Assist the treasurer in financial matters pertaining to receiving and spending of funds and presenting reports to the church.
5. See that the correct procedures are followed by all persons involved in the giving and expenditure of money.
6. Allocate funds as necessary to finance the programs of the church as directed by its members.
7. Encourage a sense of stewardship among church members.
8. Review the treasurer’s report annually.
9B. FINANCE COMMITTEE POLICY
The church fiscal year shall begin January 1 and conclude December 31.
All persons, including program coordinators, committee chairpersons, staff members, and division directors will submit their budget requests to the Finance Committee by the second Sunday of October.
Adoption of Budget
The committee will present a proposed budget for church approval at least one month before January 1.
Budget items are considered pre-approved and may be spent provided cash funds are available at the time of the expenditure. All expenditures should be reasonable and appropriate. The Finance Committee has the responsibility for determining if the funds are available.
The Finance Committee must approve expenditures exceeding the budget up to $500. The church must approve any additional expenditure with the exception of the percentage allocations, insurance, and utilities. For amounts exceeding $500, a request must be presented to the Finance Committee. If approved, the Finance Committee will make a recommendation to the church in business meeting as to the source of funding.
Emergency expenditures are disbursements that require immediate attention to address a matter that affects the safety and welfare of the church. Emergency expenditures may be made by an authorized individual or by the majority of a committee. Emergency expenditures up to $500 may be made upon notification of the Finance Committee. Emergency expenditures over $500 may be requested, but must be approved by a majority of the Finance Committee. If budgeted funds are not available, the Finance Committee will determine the source of funding. All emergency expenditures will be reported to the church at the next regular business meeting.
Disbursement of Funds
The church treasurer will be responsible for the disbursement of church funds according to the budget adopted by the church or as otherwise directed by the church. The treasurer will sign all checks. In the absence of the treasurer, the assistant treasurer is authorized to sign the checks.
The treasurer is authorized to open and close bank accounts as directed by the church. The church maintains bank accounts that include the general account, the emergency fund, and the money market account. The church also has a separate bank account for the cemetery fund which is under the control of the Cemetery Committee.
All expenses should be properly documented. The purpose of the documentation is to confirm the validity of all expenses and provide confirmation to the congregation about the good stewardship of church funds. It is recognized that some expenditures will be difficult to document, but, generally, receipts should be given to the treasurer. All receipts must be signed and should show the budget category from which the expenditure is to be taken. All receipts should be for church purchases only and must be given to the treasurer within a reasonable time. The receipt should be received before the payment is made.
If payment cannot be made by check, reimbursements may be allowed. A receipt is required and must be given to the treasurer within a reasonable time. The one making the purchase must sign the receipt and should state the budget category from which the expenditure is to be taken. The receipt should show church purchases only. The treasurer will make the payment within a reasonable time after the receipt is presented.
As the church is a tax-exempt organization, all purchases should endeavor to use this status. It is understood that in some cases this is difficult, but reasonable measures should be used to follow this policy. A tax exemption certificate for large purchases may be obtained from the treasurer.
Church Credit Card Use
When goods and services are bought for the church, the vendor should be requested to bill the church directly. Church credit cards may be made available to church members with the approval of the Finance Committee. These cards are to be used for church purchases only. Receipts for credit card charges must be submitted to the treasurer, or, in the absence of the treasurer, to a member of the Finance Committee, no later than two weeks following the date the charge is made. Payment will be made directly to the credit card company.
Members are encouraged to support the ministry of the church through regular gifts and offerings to the general operating budget of the church. These funds may be used as directed by the church to fund any area of ministry that the church may designate. Each year a budget is prepared that directs how the gifts from the congregation will be used. The church reserves the right to move money from one budget item to another to insure adequate resources for ministry areas. The church may authorize the Finance Committee to adjust items within the budget as necessary and report such changes at a church business meeting.
Designated gifts may be received from individuals for the ministry of the church, but the designated fund must be established and approved by the Finance Committee and the church before the church accepts the gift.
When the designated gift is a gift of property, not cash or cash equivalent, the church reserves the right to use the property for purposes designated by the church. The Finance Committee will work to honor the intention of the donor; however, the church, acting on the recommendation of the committee, reserves the right to use or dispose of the property in a way that benefits most the ministry of the church.
The process of establishing a designated fund by the church will include:
1. Any member of the church or community may request that a designated fund be established.
2. The individual making the gift should present a verbal or written request to the Finance Committee requesting that such a fund be established.
3. The Finance Committee must approve the establishment of the requested fund and recommend the establishment of such a fund in business meeting.
4. The church must approve the establishment of the requested fund before a contribution can be accepted.
5. If the Finance Committee or the church fails to approve a request for a designated fund, the designated fund cannot be established and the church will not accept the gift.
6. Contributions must be received designated to a specific fund and cannot be for a specific individual.
7. A list of contributors and a record of their contributions shall be maintained.
The Finance Committee will include the following in their recommendations to the church:
1. The purpose of the fund and how it furthers the mission of the church.
2. The procedure on how the fund will be used.
3. The procedure on how the fund will be closed.
4. A statement that if any funds remain when the designated fund is closed, an attempt will be made to notify the donor(s) that the remaining funds are being transferred to another designated fund or to the general budget.
The church, in exercise of its religious and charitable purposes, has established a Benevolence Fund to assist persons in need. The church welcomes contributions to the fund. The administration of the fund, including all disbursements, is subject to the control and discretion of the benevolence committee and the church. The Benevolence Committee may consider recommendations from anyone, and the committee will try to honor them. The church recognizes that assisting persons in financial need is a continuing mission of the church and has established this fund as an ongoing fund. Should the church vote to close this fund in the future, all money in the fund will be placed in the general fund of the church.
The church, in exercise of its religious purposes, has established a Building Fund to provide for the future expansion needs and growth of the church as related to its properties and facilities. The church welcomes contributions to the fund. The purposes of the fund include the construction of new facilities, the purchase of property, and major remodeling. The administration of the fund, including all disbursements, will be the responsibility of the church in business meeting. Consideration will be given to any recommendations from the Building and Grounds Committee. All memorial contributions, unless otherwise designated, will be deposited in the Building Fund. The church recognizes that planning for the future needs of the church is a practice of good stewardship and has established this fund as an ongoing fund. Should the church vote to close this fund in the future, all money in the fund will be placed in the general fund of the church.
Building and Grounds Fund
The church, in exercise of its religious purposes, has established a Building and Grounds Fund to maintain the church buildings, grounds, and equipment. The church welcomes contributions to the fund. The church will begin budgeting to this fund, three years in advance of the anticipated need, for any project that exceeds $10,000. When church funds are adequate at the end of the church year, the remaining balance in the annual operating budget of the Building and Grounds Committee will be moved into this accumulating fund. The primary purpose of the fund will be to finance projects that exceed $10,000. When funds allow for it, this fund may be used for other expenses that exceed the Building and Grounds budget allowance for a particular year. The administration of the fund will be the responsibility of the church in business meeting. Consideration will be given to any recommendations from the Building and Grounds Committee. The church recognizes that maintaining the church properties is a practice of good stewardship
and has established this fund as an ongoing fund. Should the church vote to close this fund in the future, all money in the fund will be placed in the general fund of the church.
The church, in exercise of its religious purposes, has established an Emergency Fund to provide for financial emergency. The church welcomes contributions to the fund. The administration of the fund, including all disbursements, will be the responsibility of the church in business meeting. Consideration will be given to any recommendations from the Finance Committee. The Emergency Fund shall not exceed the normal operating expenses of the church over a three-month period. The church recognizes that planning for future, unexpected needs is a practice of good stewardship and has established this fund as an ongoing fund. Should the church vote to close this fund in the future, all money in the Emergency Fund will be placed in the general fund of the church.
The church will receive gifts to honor the memory of deceased individuals. The following information should be recorded: the name and address of the donor, the name of the person(s) in whose memory the gift is given, the date and occasion of the gift, a description of the gift, and the designated use of the gift. The church will try to honor any request by the donor as to how the gift is to be used. If the request cannot be honored, an attempt will be made to contact the donor and a decision will be made about the use of the gift. Unless otherwise designated, all memorial gifts will be deposited in the Building Fund. An acknowledgement will be sent to the donor and to the family of the one whose memory has been honored.
Monthly budget reports will be made available to the membership of the church at the regular business meeting. The treasurer will present a financial report to the church body at this time. The treasurer will provide a report for the Annual Church Profile each year. An annual summary financial report will be available to the church membership.
Annual Review of Financial Records
The Finance Committee will review annually the financial records of the church. If the committee has a concern about anything in the financial records, its members will recommend audit procedures to the church. The committee will recommend that an accountant who is not a church member be employed to audit the church financial records.
The church believes in the biblical basis of mission giving as commissioned by the Lord Jesus Christ in Matthew 28:18-20. The church will commit to giving the allotted percentages as stated in each yearly budget to mission causes through the Cooperative Program, associational missions, and others approved by the church.
Special Mission Offerings
The church supports and encourages all church members to give to special mission offerings over and above their tithes. The church recognizes and participates in special offerings promoted by the Southern Baptist Convention, the Kentucky Baptist Convention, the North American Mission Board, and the International Mission Board.
The goal of the church will be to maintain three months of reserve funds to be used in the case of emergency or temporary budget shortfall. This will be designated as an Emergency Fund. Reserve funds are defined as the monthly expenses that it takes to operate the church.
Property and Liability Insurance
The church will insure the church property at the fair market replacement value. At least every three years, the trustees will review the church’s current property and liability insurance coverage. The Building and Grounds Committee will conduct a church safety audit annually. The church will maintain adequate workmen’s compensation and automobile coverage.
The church secretary will provide contribution statements to each donor of the church in the month of January. These statements will show the name and address of the church, the individual amounts with dates and purpose of contribution, the total amounts contributed in each area, the grand total of all contributions, the signature of the church secretary, and the date the statement was generated.
Church Usage Fees
Church members and nonmembers may reserve the church facilities for personal use if the reservation is not in conflict with the church’s schedule. The church will determine the usage fees.
Secure Financial Records
The church will be responsible for maintaining adequate financial records in the church facilities. These records include individual contributions to the general operating budget, contributions to designated funds, and monthly budget reports. These records are stored on the computer in the church office, and a backup system is used to secure the records in the event of a fire or natural disaster. All records are backed up once a week, and the secretary moves one back-up copy off site. The computer financial records are protected by a password that can only be accessed by the church secretary and treasurer. The password will be changed upon the resignation of the secretary or treasurer. Important documents are stored in a bank safety deposit box. The chairman of the trustees and the treasurer have keys to this box.
Since the church is funded by charitable contributions, it must be governed by the six requirements of the IRS for a contribution to be tax deductible. The requirements are
1. The contribution must be a gift of cash or other property and not for personal services rendered.
2. The contribution must be delivered before the close of the year. Charitable contributions must be claimed in the year in which they are delivered to the church.
3. The contribution must be unconditional and without personal benefit to the donor.
4. The contribution must be made to or for the use of a qualified tax-exempt charitable organization. Contributions made directly to individuals are not deductible.
5. The contribution must be within the allowable legal limits as specified by the IRS.
6. The contribution must be properly documented.
Charitable contributions are deductible only to the extent that they exceed the value of any benefit received by the donor. When donations to a fundraiser include a service such as a meal or car wash, only the portion of the donation that exceeds the value of the service will be deductible.
Registration fees for camps, retreats, concerts, etc. are not considered tax deductible because the donor is receiving “value” for the donation.
The church believes in the biblical practice of financing the work of the church through the faithful giving of tithes and offerings; however, there are some ministries of the church which need additional funding for their special programs, such as summer camps for youth and children.
Additional funding should be in the form of donations at fundraising events or by designated giving at any time. The people contributing to these programs should consider their giving “in addition to’, not “in place of” normal giving. Contribution credit will be given according to IRS guidelines.
Fundraising events must be scheduled at least thirty days in advance and must be approved by the church council.
Money from fundraising events should be counted and given to the church treasurer or to a member of the Finance Committee as soon as possible.
The Finance Committee should review all requests for special offerings other than mission and benevolence offerings. Once the request is made to the committee, it will be relayed to the appropriate committee or to the church council for approval.
Financial Matters at Business Meetings
Anyone needing to introduce, at a business meeting, a financial matter requiring action, should notify the treasurer or a member of the Finance Committee in advance of the meeting so that any applicable information can be checked ahead of time and brought to the attention of the church. This should eliminate any delays in the action needed.
Retention of Church Financial Records
The church will retain most of its records for a period of seven (7) years. Records that will be kept indefinitely are the following:
Articles of Incorporation
Cash books/check register/canceled checks for important payments
Contracts, mortgages, notes and leases (still in effect)
Correspondence (legal and important matters only)
Deeds and bills of sale
Financial statements (end of year)
Insurance records, current accident reports, claims, policies, etc.
General and private ledgers/Journals
Minute books for director and stakeholders, including by-laws and charter
Property records and outside appraisals
Up-to-date asset inventory
9C. FINANCE COMMITTEE PROCEDURE
The Finance Committee will seek input on the proposed budget from all church members by making requests in the church bulletin, during the worship services, through the video system, on the website, and at any other available opportunity.
A budget request form will be sent to each committee chairperson, program coordinator, division director, or staff member requesting his/her particular needs for the budget.
The budget request form should be returned to members of the Finance Committee before the second Sunday of October, and the requests will be considered in the preparation of the new budget proposal.
Adoption of Budget
The Finance Committee will have the budget proposal available at the conclusion of the morning worship service on the Sunday prior to the November business meeting for all church members to review and study.
The proposed budget will be presented and discussed at the November business meeting.
Voting on the proposed budget will be done by secret ballot at the beginning of the morning worship service on the Sunday following the business meeting.
The votes will be counted and the results will be given at the end of the service.
The budget must be approved by a majority of those voting; otherwise, it will be returned to the Finance Committee for reconsideration.
The revised budget will again be presented and discussed at either a called business meeting or the regular December meeting.
The voting procedure will be the same as for the original proposed budget.
Collection of Sunday School Offering
The church uses an envelope system in its collection of offerings.
Each person who gives an offering, regular or designated, will fill out an envelope in his/her Sunday school class, making sure the information on the envelope includes the name, date, and amount of offering. If the contribution is a designated offering, the designation must be written on the envelope and the check.
An envelope is prepared for all checks given without envelopes.
The envelopes are given to the class secretary who counts the money and records the information that is needed.
The class secretary then puts the individual envelopes in a large envelope and gives it to the Sunday school secretary.
The Sunday school secretary counts the offerings from all classrooms and records the totals in the church record book.
The envelopes are stored for the church secretary who later electronically records the information on each individual’s annual contribution statement.
A list of the total coins, currency, and checks received is prepared by the Sunday school secretary.
The list is placed, along with the money, in a bank bag and is given to the church treasurer or to someone designated by the treasurer to receive the offering.
Collection of Worship Service Offering
Offerings given during the morning worship service may be placed in envelopes.
Offerings are collected by the ushers and are given to the ushers coordinator and assistant treasurer, or their designees, who count the offering.
If a check is received without an envelope, the counter will fill out an envelope.
The information is recorded in the church record book.
All envelopes are stored for the church secretary who later electronically records the information on each individual’s annual contribution statement.
A list of the total coins, currency, and checks received is prepared by the ushers coordinator.
The list and money are placed in a bank bag and are given to the treasurer or to someone designated by the treasurer to receive the offering.
The treasurer counts the offerings for both the Sunday school and church worship services, prepares the deposit ticket, makes the deposit, and records the data in all records. The following Sunday, the treasurer returns the Sunday school and church worship lists, along with the treasurer’s official totals and the amount of the deposit, to the Sunday school secretary. The total offering is placed on the offerings board in the church sanctuary.
Collection of Sunday Night Offering
Youth and children’s ushers collect, on a rotating basis, the offerings given during Sunday night services.
The treasurer and ushers coordinator, or their designees, count the money, record the total, and place it in a bank bag.
Envelopes are prepared for checks received without envelopes.
The treasurer recounts the money, prepares the deposit ticket, and records the amounts in all records.
The offering is divided equally between the Children’s Fund and the Youth Fund unless particular contributions are designated for one fund or the other.
The following Sunday, the total sheet with balances for the youth and children’s funds is given to the Sunday school secretary. The balances are placed on the offerings board in the church sanctuary.
Establishment of Designated Fund
The Sunday school secretary, ushers coordinator, assistant treasurer, or their designees observe, during the counting process, the gift as a potentially new fund.
The counters make a note or highlight the description and amount on the counting slip as a potentially new fund.
The treasurer temporarily records the gift in the “Other” category of designated offerings.
The treasurer determines if the gift is a tax-deductible charitable contribution and is compatible with the mission of the church.
The treasurer presents the gift and a recommendation for action to the Finance Committee.
If the Finance Committee determines that the gift is acceptable as designated, it presents the request for a new designated fund to the church during the next regular or special business meeting. Upon approval and activation of the fund, gifts are accepted from all of the church membership and others over and above tithes and offerings. If not approved, the donor is contacted and encouraged to redirect the gift to an existing fund or to agree to place it within the general budget. If that is not possible, the gift is returned.