Some churches still have NO policies and procedures in place. Some are worse - they have "unwritten" or "tribal knowledge" where only the chosen few are allowed to know anything about how finances are handled. Of course, this leads to a lack of trust and mismanagement of funds. No less than the treasurer for Jesus and his disciples was swayed for a few pieces of silver to betray the Living God. So here's a *start* to how your financial policy might be improved, based on things I've actually lived through as a lay leader in a church. (Yes, each one of these was a real world issue in 2018.)
0. Your budget should have foretasted income, not simply expenses you think you're going to get to by "faith". Especially in smaller churches where cash flow is critical, if people don't want to pledge, then the budget should look very small to accommodate. Sorry Pastors, this is something that just has to happen so you're going to have to preach on it from the pulpit. Setting aside obvious miracles of fish and bread, we have no indication that the disciples or Jesus EVER fabricated money. On the contrary, Paul worked to support his own ministry.
1. We're not going to do business with our friends. Or our relatives. If you are a congregant here and you want to do something for the church, great. We'll pay your itemized receipts for materials from a normal store. We will not write enormous checks to you, a close relative or friend, ever. ESPECIALLY not your live in girlfriend. Even if they do give you a 10% discount, it still smells bad years later. Do business with businesses, make your actions transparent.
2. Thou shalt not write checks to thyself under the guise of "missionary work". This SHOULD be enough to get your removed from the congregation in disgrace, if not charged with embezzlement.
3. If you write a check, it should be signed by someone else - TWO of you should know what's going on and why. And if you write a check it should be easily discernible years later what it was for. This is one reason stores give you receipts. Just keep them.
4. Designated Funds is a bad idea for a small church. Almost always. You should not try to bamboozle people who don't understand accounting with the "magic" of designated funds. If you're running a deficit budget or just aren't that large of a church, you shouldn't use them.
5. At no time is your personal house the appropriate place for the main financial records of the church.
6. If you have a contract with a professional to provide some level of professional help, it should be easily apparent to even a casual observer what that professional is responsible for. Those relationships are correctly done in a statement of work (contract) so it should be a simple list of bullet points, not a years-long discussion on who's responsible for what.
7. Any pastor who requests a raise based on "faith" when the congregation and bank account are shrinking should be sacked.
8. Committees of any type should never get to vote for themselves, nor should your nominating committee nominate itself.
9. Audit is a real word that means things to people. You can't just 'ignore' your charter to do one.
10. Math is a God given system to show you if you have enough money to do something. Don't fall into the trap that debt is somehow a "tool".
0. Your budget should have foretasted income, not simply expenses you think you're going to get to by "faith". Especially in smaller churches where cash flow is critical, if people don't want to pledge, then the budget should look very small to accommodate. Sorry Pastors, this is something that just has to happen so you're going to have to preach on it from the pulpit. Setting aside obvious miracles of fish and bread, we have no indication that the disciples or Jesus EVER fabricated money. On the contrary, Paul worked to support his own ministry.
1. We're not going to do business with our friends. Or our relatives. If you are a congregant here and you want to do something for the church, great. We'll pay your itemized receipts for materials from a normal store. We will not write enormous checks to you, a close relative or friend, ever. ESPECIALLY not your live in girlfriend. Even if they do give you a 10% discount, it still smells bad years later. Do business with businesses, make your actions transparent.
2. Thou shalt not write checks to thyself under the guise of "missionary work". This SHOULD be enough to get your removed from the congregation in disgrace, if not charged with embezzlement.
3. If you write a check, it should be signed by someone else - TWO of you should know what's going on and why. And if you write a check it should be easily discernible years later what it was for. This is one reason stores give you receipts. Just keep them.
4. Designated Funds is a bad idea for a small church. Almost always. You should not try to bamboozle people who don't understand accounting with the "magic" of designated funds. If you're running a deficit budget or just aren't that large of a church, you shouldn't use them.
5. At no time is your personal house the appropriate place for the main financial records of the church.
6. If you have a contract with a professional to provide some level of professional help, it should be easily apparent to even a casual observer what that professional is responsible for. Those relationships are correctly done in a statement of work (contract) so it should be a simple list of bullet points, not a years-long discussion on who's responsible for what.
7. Any pastor who requests a raise based on "faith" when the congregation and bank account are shrinking should be sacked.
8. Committees of any type should never get to vote for themselves, nor should your nominating committee nominate itself.
9. Audit is a real word that means things to people. You can't just 'ignore' your charter to do one.
10. Math is a God given system to show you if you have enough money to do something. Don't fall into the trap that debt is somehow a "tool".
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