Financial Policies 
and Procedures
Handbook

XYZ
Baptist
Church

	Table of Contents	

I.	Policy Statement
II.	Excerpts from Constitution and Bylaws
III.	Finance Office
IV.	Love Offerings
V.	Budgeting
VI.	Ministry Records and Monthly Reports
VII.	Periods of Expenditures
VIII.	Purchasing / Expenditures / Reimbursements
A.	Purchase requisition System
B.	Other Check Requests 
1.	Honorariums
2.	Expense Report / Reimbursements
3.	Auto Mileage Reimbursements
4.	Capital Assets and Equipment
5.	Pagers, Cell Phones, Communications
C.	Church Issued Credit Cards
D.	Designated Funds
E.	Cash Advances
IX.	Charge Accounts
X.	Check Writing
XI.	Check Signing
XII.	Accountability
XIII.	Financial Records Retention
XIV.	Handling of Cash, Checks, and Fees
A.	Petty Cash
B.	Cash Receipts
C.	Checks
D.	Fees
E.	Cash Transmittals (Deposits)
XV.	Contributions Policy 
XVI.	Boards and Fee Based Programs Policy (1990)
XVII.	Solicitations and Benevolent Causes
XVIII.	Adopt-A-Family Guidelines
XIX.	Foundation
XX.	Facilities Stewardship Policies
XXI.	Audits
XXII.	Addendums
A.	Expense Report / Reimbursement Request
B.	Purchase Requisition / Check Request
C.	Purchase Requisition - Capital Assets & Equipment
D.	Cash Advance Report / Reconciliation
E.	Mileage Reimbursement Form
F.	Honorariums and Guest Expense 1099
G.	Cash (Deposit) Transmittal Form
H.	Church Issued Credit Card Monthly Statement Payment Voucher
Finance Ministry Team Presentation Form
I.	
I.	Financial Policy Statement

INTRODUCTION

The proper administration of church funds requires a complete and thorough budget control system.  This control system is used not to penalize any person or program, but rather to assure that funds are distributed according to priorities imposed by the will of the membership and that expenditures are limited to the income received by the church.

The Lord Jesus himself instructed us to use diligent judgment in fiscal matters:

"For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?  Lest haply, after he hath laid the foundation, and its not able to finish it, all that behold it begin to mock him, Saying, This man began to build, and was not able to finish."
	Luke:  14:28, 29, 30 (K.J.V.)

Sound judgment should be exercised in the management of those funds which the Lord, through His servants, has made available to the church.  Any funds received by the church are intended for the furtherance of Gods Kingdom.  They must be handled accordingly.

GENERAL

The financial program at XYZ Baptist Church is supported by its membership through tithes and offerings which are classified either as designated or undesignated depending upon instructions of the contributor.  All designated funds shall be contributed for the regular religious or benevolent programs of the church or for Special Needs deemed compatible with our church program by the church Finance Ministry Team.  No designated offerings shall be accepted if they are to be used for other than these previously stated purposes.  See Item XIV for further definition of contributions.

Ultimate responsibility for expenditures shall be vested in the church membership. 

However, due to the fortunate growth of our church, it is necessary for day-by-day fiscal operations to be administered by a smaller functioning body.  This body is the Finance Ministry Team whose members shall be elected by the church in business session.*

*Establishment of the Church Treasurer and Finance Ministry Team is defined in the XYZ Baptist Church Constitution and By-Laws (Revised 1994, Article IV, Sec III, page 20; Article VI, Sec VII, page 24)

Any church member may bring a need to the Finance Ministry Team by advising the pastor for administration or member of the Ministry Team for inclusion on the regular meeting agenda.  However, official requisitions may be paid only by the Finance Ministry Team.  All items of equipment and supplies are owned by XYZ Baptist Church as a body, as compared to ownership by an individual class, department, or organization. Donations of material objects will be received by the church with the understanding that donors relinquish all restrictions on such objects.  In this way, an item is available equally to all according to need.  If an organization needs equipment or other facilities, they may be requisitioned by notifying the minister in charge of the activity involved.  All requests shall be considered on a priority of need basis.  The objective in utilization of the funds of XYZ Baptist Church shall always be to secure the greatest dollar value in every expenditure made for the church.  Adequate planning for all expenditures shall be encouraged through the preparation of the annual church budget.

DISBURSEMENT FORMS (See Addendum)

There are distinct benefits accruing from the purchase requisition system.  It provides internal control on all expenditures.  This allows the church, through the Finance Ministry Team, to know at any given time how many bills are outstanding.  It not only discourages but prevents "free lance" spending on the part of unauthorized people.  This, in turn, builds a greater confidence in the churchs financial program.  Advance requisitioning encourages and even requires advanced planning on the part of both the organizational leadership and staff.  The quality of work in the churchs organizational life will be upgraded as long-range planning is done.

The Finance Office shall have authority to write a check only when that authority is granted by the Finance Ministry Team through a requisition, except for those fixed and budgeted expenses which are of a recurring nature, such as mortgage payments, salaries, utilities, etc.  Fixed recurring items paid by the Treasurer on a regular basis shall be reviewed by the Finance Ministry Team at least once each year, preferably at the September meeting; and any changes considered appropriate shall be made a part of the minutes of that meeting.

Requisitions from staff members on items exceeding $1500 shall require authorization from the pastor for administration and or the church treasurer.

FIXED EXPENSES

The Treasurer has authority to pay these amounts monthly (based upon the current-year budgeted amounts) as funds are available, simply by writing checks for signature by the authorized person.

Local Benevolence is administered by the Pastor and Deacon Chairman.  As requests for benevolence are received, they are channeled to these individuals who will investigate the need and take appropriate action within the budget limitation for this purpose.  The requisition must be signed by either the Pastor or Deacon Chairman before it is valid.  The finance office needs only to prepare the check for payment.

Mission Organizations - Requests from Brotherhood, RAs, WMU, GAs and Acteens need to be authorized by the respective directors and approved by the appropriate staff member.  Other requests for mission and evangelistic funds must be made through an appropriate elected church leader or staff member in consultation with the pastor.

COMPENSATION & BENEFITS  (See Fixed Expenses above)

All compensation shall be made as specified by the Personnel Ministry Team and/or the  Personnel Policies Handbook and administered by the finance office and the church treasurer.

FINANCE MINISTRY TEAM  OPERATION

Members of the Finance Ministry Team are elected by the Church as provided at Article IV Section III of the Constitution and By-Laws (Revised 1994) of XYZ Baptist Church. 

At the first Finance Ministry Team meeting each year, the elected members shall choose a Chairman, Vice-Chairman and Secretary who shall serve for the full church year.  Roberts Rules of Order shall be the guide for establishing procedures for meetings of the Ministry Team.  The Secretary shall prepare minutes of all meetings.  The Chairman shall, at the beginning of each meeting, furnish an agenda of the proposed business of that meeting to each member along with a copy of the minutes of the last meeting.

Also at the beginning of each periodic meeting, members of the Finance Ministry Team shall be furnished with reports communicating; (a) budget amounts and expenditures by line item reflecting amounts by previous month and year-to-date. (b) Status of Cash - designated and undesignated.  This report shall be prepared by the pastor for administration and reviewed by  the treasurer.

The Church Sunday bulletin and mailed postcards shall be the official medium to notify all members of regularly scheduled finance Ministry Team meetings.  Members shall be called individually by the office of the pastor for administration when special meetings are to be held.

Minutes of all Finance Ministry Team meetings shall be on file in the church library and available to any church member upon request.

General Information  The church budget shall be the guide for all spending.  All spending outside of the budget must be authorized by the church.

On matters which are presented to the Finance Ministry Team reserves the option of referring the matter back to the originating source for such additional information as deemed appropriate.

In the case whereby the Finance Ministry Team is requested to act upon a request for an un-budgeted item, which will necessitate a reduction in another budget line-item, then the person making such request shall advise the Finance Ministry Team as to the budget line-item from which the funds shall be taken.

It shall be the policy of the Finance Ministry Team that in no case shall a check be signed and co-signed in blank.

All requests requiring Finance Ministry Team action shall be presented to the pastor for administration in writing not less than one week prior to the regularly scheduled meeting.  Requestor shall also complete the presentation form (addendum item) and have multiple copies available for the team during verbal presentation. Any exceptions shall be considered at the discretion of the majority of the Ministry Team members in attendance.

Procedure for Handling Funds:  All funds collected during regular church services shall be collected by at least two individuals together and deposited in the church safe until Monday morning when counted by the Teller Ministry Team.

A volunteer Teller Ministry Team  shall be solicited by the pastor for administration and approved annually by the Finance Ministry Team.  They shall count and prepare the deposit each Monday Morning.  The Ministry Team shall deposit all cash and forward batched sets of checks, stamped for deposit, to the Finance Office for verification.

Amount of any deposit shall be recorded on a cash (deposit) transmittal form provided by the Finance Office with the number of the depository bag and the initials of the person making the deposit.

Special emphasis should be placed on contributions for the 30th and 31st of December.  The Ministry Team responsible for this period should assure that someone is available at the church during reasonable hours to accept these contributions.

At least two persons shall always be present during counting of funds.  Any irregularity or problem encountered by a counter should be communicated to the pastor for administration  immediately.

Any contributions made to the church office at times other than during regular or special services shall be deposited as soon as is practical.  If church staff or employees deem it appropriate, then they should notify the Finance Chairman.

Meal Payments - Funds from Wednesday night meals shall be collected each Wednesday evening and deposited as soon thereafter as practical.

II.	Excerpts from Constitution and Bylaws

Article IV
SECTION III.	FINANCE Ministry Team

1.	Responsible for encouraging and promoting the financial program of the church and administering church financial policies.

2.	The Ministry Team shall consist of not less than twelve (12) members.  The Ministry Team shall serve on a rotating basis with four (4) new members being elected each year for a three (3) year term of service.  The Treasurer is an ex-officio member of the Finance Ministry Team.  Staff Liaison - Pastor and Minister of Administration.

3.	The duties of the Ministry Team are to prepare and present budget to the church annually, oversee and keep records of all expenditures by the church, approve expenditures properly authorized and budgeted, make recommendations to the church in regard to expenditures not budgeted or above approval limit, and meet monthly as a Ministry Team to transact and discuss the financial business of the church and take action.  Also responsible for handling the collection, accounting and deposits of all offerings received, including Wednesday meals.  The Ministry Team shall work closely with the staff and Ministry Teams as to capital improvements and new furnishings purchases.  Report monthly to the church during business meeting the financial status through the treasurers report and other reports.

Article VI
SECTION VII.  Treasurer.  It shall be the duty of the Treasurer to preserve, and pay out, all money, or things of value, keeping at all times an itemized account of all receipts and disbursements, with the assistance of the Church Finance Office.  Payment of all bills shall be made promptly by check and all funds received for denominational or other causes shall be remitted at least monthly by check.  It shall be the duty of the Treasurer, with the assistance of the pastor for administration and the church finance office, to submit a financial report at its regular monthly business meeting for the most recent month for which the church finance office has closed the books, not to exceed 2 months passed.  All books, records, and accounts kept by the Treasurer and the church finance office shall be considered the property of the church.  The books of the church shall be audited annually by an independent auditor under the direction of the audit Ministry Team.  The Treasurer shall, upon the election of his/her successor, at the completion of the fiscal report, promptly deliver to the new Treasurer all books, records and accounts in the hands pertaining to or relating to the duties of the office which he/she is relinquishing.

III.	Finance Office

The church Finance Office shall be staffed by the Finance Assistant who shall be supervised by the Pastor for administration.  The finance office shall be responsible for all matters relating to the financial operations of the church on a day-to-day basis.  Personnel may be added as needed in consultation with the Personnel Ministry Team.  These policies shall address the specific requirements of policy enforcement of the Finance Office.

IV.	Love Offerings

All love offerings must be pre-approved by the Finance Ministry Team.  Such requests may be made in the monthly meeting of the Ministry Team by the pastor or  appropriate staff administering the event.  See the statement on ASolicitations and Benevolent Causes@ for further policy  regarding the collection of funds in Sunday School departments and classes and other small groups.

V.	Budgeting

The proper administration of church funds requires a complete and thorough budget control system.  This control system is used not to penalize any person or program, but rather to assure that funds are distributed according to priorities imposed by the will of the membership and that expenditures are limited to the income received by the church.

The church fiscal year shall be January 1 through December 31.  A proposed budget for the fiscal year will be prepared by the church staff and appropriate Ministry Teams.  This process shall be guided by the Finance Ministry Team on a Azero base@ plan.  Ministry budgets will be prepared by staff and Ministry Teams based on planned programs as established in planning sessions by the pastor and staff in January and February.  Each line item requires a full explanation with supporting detail for the planned expenditure.  Forms are provided for each line item request.  The Finance Ministry Team will seek to use projections in giving preliminary guidance to the staff on July 1.

All preliminary budgets shall be completed and  submitted to the pastor for administration by staff and Ministry Teams no later than August 15 each year.  The pastor for administration shall compile all requests into a summary spreadsheet supported by the detail worksheets for each line item.  Copies of this information will then be distributed to the Pastor and Finance Ministry Team for initial review.   

During the months of September and October, the Finance Ministry Team will evaluate all requests, preparing a proposed budget by the November church business meeting.  At this time the proposed budget will be mailed to the congregation and formally presented in business session.  Budget hearings will then be conducted on at least two Sunday afternoons in November.  In their December meeting, the Finance Ministry Team will then consider issues, additions, and deletions from the proposed budget as a result of the budget hearings.  The proposed budget will then be discussed and voted in church business session in December.

VI.	Ministry Records and Monthly Reports

The staff member in charge of the line item is responsible for maintaining a log of purchase requisitions and/or check requests issued by line item.  The Finance Office maintains no responsibility for these records.  Once per month the Finance Office will prepare and distribute reports detailing by line item the amount expended this month, year to date, budget, and percent of budget expended.  Staff should monthly reconcile their logs to the monthly report prepared by the Finance Office.    Any discrepancy should be reported to the Finance Office within 10 days of receiving the report.  The pastor for administration and the Finance Office shall provide all other reports as requested by the Finance Ministry Team.

VII.	Periods of Expenditures

Payments for expenses should be made in the same period incurred.  Check requests are required to be submitted within the time period of the expenses incurred well in advance of the due date.  It is prohibited to make purchases from expended line items and delay payment until such a time funds become available.  

VIII.	Purchasing / Expenditures / Reimbursements
A.	Purchase Requisition System

All purchases shall be guided by the church purchase requisition system described in the Financial Policy statement.

2.	Other check requests 

6.	Honorariums - form 1099 for payment of honorariums shall be used with all information completed.

7.	Expense Report /  Reimbursements - form AEmployee Expense Report / Reimbursement@ shall be used with all receipts and documentation attached per IRS regulations.  This form shall apply to all cash reimbursements as well as personal credit card reimbursements.

3.	Auto Mileage Reimbursements - for AAuto Mileage Reimbursements@ must be used with all information completed.  Eligibility for this reimbursement is determined by the Personnel Ministry Team.

4.	Capital Assets and Equipment - form ACapital Assets and Equipment@ shall be used for all items in excess of $1500.

5.	Cell phones, pagers, and other electronic communications - purchases and monthly expenditures shall be guided by the corporate accounts administered by the pastor for administration and or personnel ministry team guidelines.  Plans may include but not be limited to a non-accontable professional allowance.

3.	Church Issued Credit Cards

1.	Church VISA cards will be issued for each program ministry.

2.	Use of the church issued VISA cards

The attached payment voucher with appropriate line item assignment shall be completed and signed for payment of each monthly statement of charges.  The payment voucher is due 10 days after receipt of statement.  If voucher is delinquent, all statements will be paid by the Finance Office thereafter with line item assignment made by the pastor for admn.  Adjustments to line items will be made the next month when proper voucher is received.  The above procedures are instituted to avoid late charges and interest for unpaid balances.  Lost and/or stolen cards are the responsibility of the program ministry and should be reported to the Finance Office immediately.

3.	Documentation required

All receipts for charges made shall be attached to all payment vouchers.  When entertaining, names of individuals are to be written on the receipt.  Gratuities of no greater than 15% are approved.  Packing slips, internet order confirmation notices, and other supporting documentation should be included with payment voucher as a receipt for use of card.

4.	Travel expenses

Air tickets for coach fare only.  Spouse expenses must be pre-approved by executive pastor. Card use for convention / meeting expenses shall be applied to pre-approved convention / meeting line item in personnel budget and noted as such on monthly payment voucher.  The Finance Ministry Team does not approve of the use of church credit cards for the attainment of personal frequent flier miles, travel points, or rebates other than those that can be turned in to the church for use by the church.
	
		5.	Monthly statements will be reviewed by the pastor for administration, the executive pastor, and the church treasurer.

		6.	Abuse, if any, of the use of the church issued credit card shall result in the surrender of the card, with no reimbursement for use of personal credit cards.

D.	Designated Funds

Designated funds exist in certain instances for the specific use of the intended fund.  Expenditures from these funds shall be the responsibility of the Finance Ministry Team.  The pastor and staff may make requests for the use of these funds in accordance with the fund, but in all cases, this request must be made in advance of any expenditure.  The pastor and chairman of the Finance Ministry Team shall be the clearinghouse for all such approvals.

E.	Cash Advances

Cash advances are allowed for ministry related convenience.  A check request / purchase requisition shall be completed and forwarded to the Finance Office for the preparation of the check.  The check shall be issued with a cash advance envelope (Cash Advance Report) for the return of all receipts supporting the cash expended along with any unused cash.  The reconciliation must be completed on the front of the envelope.  This envelope must be completed and returned to the Finance Office within 5 days of the conclusion of the use of the cash or event.

F.	Cash Reimbursements

Cash reimbursements are allowable.  Reimbursements are only made with valid receipts.  Reimbursements for entertainment expenses should be made with a receipt with the names of those participating on the receipt.

In all cases of cash reimbursement, a cash reimbursement form should always be used (see addendum) clearly completed with all the information and authorizations required.

IX.	Charge Accounts

IN NO EVENT SHALL ITEMS BE PURCHASED AND CHARGED TO THE CHURCH WITHOUT DUE PROCESS OR REQUISITION AND APPROVAL AS AUTHORIZED IN THIS POLICY.

The establishment of vendor charge accounts is expressly prohibited except by the Finance Office.  Authority to charge items to the church must be granted through the issuance of a purchase requisition to be taken to the vendor, once an account is established.  Faxes may be used, however, only authorized individuals will be permitted to use charge accounts.

X.	Check Writing

Checks shall be written once per week.  All check requests, reimbursements, etc., shall be submitted by Wednesday noon for issuance of check on Friday.  Emergency checks are  prepared if signatures are readily available.  However, emergency checks shall not take on the nature of reimbursements due to the requestor=s procrastination.  

From time to time, especially during holiday periods or vacation of personnel in the Finance Office, announcements will be made concerning special circumstances for the timing check requests.  

XI.	Check Signing

The Finance Ministry Team shall annually elect a minimum of six (6) check signers in addition to the Treasurer, Pastor for administration, and Assoc Minister of Admin.	

XII.	Accountability

The final authority for the expenditure of funds rests with the congregation.  However in the course of daily business, staff who supervise line items have the authority to write purchase requisitions and check requests for the line items charged to their supervision except as where otherwise noted.  The requesting staff member must legibly sign all check requests,  purchase requisitions, and other requests for disbursement.  The pastor, chairman of Finance, and check signers will review the expenditure and reserve the right to question the request.  In this case, the request may require further documentation or approval.  An annual audit will be performed on all expenditures and documentation.  Subordinates may prepare check requests but the staff supervisor is accountable for review and signature.

XIII.	Financial Records Retention

Copies of:

All check requests / purchase requisitions		5 years
Cash Receipts					5 years
Copies of Checks for fees, etc			5 years
Conservatory and Weekday Preschool
Student and Fee records			5 years
Cash (Deposit) Transmittals Vouchers		5 years	
All Accounting Records				7 years

XIV.	Handling of Cash, Checks and Fees

A.	Petty Cash - The Finance Ministry Team prohibits the use of petty cash funds.

2.	Cash Receipts - sequentially numbered receipts are required to be issued immediately for all cash receipts of any nature.  All numbered receipts must be accounted for at all times.  Receipt books can be obtained from the Finance Office.  The original shall be given to the payer.  A copy shall be attached to the cash transmittal (deposit) and a copy shall be retained.  All receipt books are to be labeled as to the time period applicable and retained for 5 years.

It is prohibited to retain cash and checks overnight at a desk or work station.  All cash must be placed in a church safe every day.

C.	Checks - any checks received for payment of fees, sale of t-shirts, materials or other items shall be stamped with a church endorsement stamp IMMEDIATELY and be copied in duplicate.  One copy shall be attached to the cash transmittal (deposit) and one copy retained as a receipt for 5 years.

D.	Fees - fees charged for ministry program related activities and materials is allowed.  However, it is expressly prohibited to use cash collected as petty cash or payment for the event or materials.  Reconciled cash transmittals (deposits) must be made and church checks issued for expenses related to the event.

E.	Cash Transmittals (Deposits)

1.	Each ministry office that collects cash, checks and fees is responsible for preparing a weekly cash transmittal (deposit) of money received.  These funds are to be stored in a church safe until the cash transmittal (deposit) is ready.

2.	The deposit itself should be prepared using the A Cash (Deposit) Transmittal Form and forwarded to the Finance Office by 9:00 am Friday morning the same week for deposit.

3.	Documentation - Each cash transmittal (deposit) shall contain copies of all receipts supporting the cash and copies of all checks supporting the checks.  Adding machine tapes  (2) should be included for each verifying the amount.  The transmittal form should be completed in its entirety, signed, and verified.

4.	Ministries and/or programs that make their own bank deposits will submit the above documentation (E-1,2,3) with a deposit slip copy by Friday morning the same week of the deposit.

5.	All transmittals are required to be prepared and signed by the person preparing the transmittal AND verified and signed by one additional person.  

XV.	Contributions Policy (4/10/91)

Preamble
As each one has received a special gift, employ it in serving one another as good stewards of the manifold grace of God.  I Peter 4:10.

As the church’s needs are so plentiful, it will be the policy of XYZ Baptist Church to always encourage and administer the proper use of contributions and gifts beyond the tithe God has provided for us in a manner which brings Him glory and which is consistent with the current policies of:

A.	XYZ Baptist Church Constitution and By-Laws, and
B.	XYZ CHURCH Finance Committee Policies and Procedures Handbook

All of our deliberations will be, to the best of knowledge and belief, in total accord with the teachings of God as they relate to mans stewardship and within the written laws of the United States of America.  XYZ CHURCH will comply with all Federal and State laws to protect the giver as well as the church.  Further, XYZ CHURCH is not in a position to suggest or give tax advice concerning contributions and gifts.

Designated Cash Gifts

A.	Designated cash gifts will be accepted by the church for specific activity (ies) in the church’s adopted program and will be applied to the church’s operating budget (s) for that activity (ies).
B.	Gifts to the church designated for the use of a specific individual (s) will not be accepted and will be returned to the donor.
C.	Designated funds used for gifts or travel require the approval of the pastor or the XYZ CHURCH Finance Committee.  If the use of the funds is deemed urgent and the Pastor is unavailable, the XYZ CHURCH Deacon Committee Chair or the XYZ CHURCH Finance Committee Chair may approve the use of the funds.

Undesignated Cash Gifts

A.	Undesignated cash gifts beyond the tithe are encouraged and will be applied to the general operating budget of the church and shall be used in the manner deemed most appropriate by the pastor and the XYZ CHURCH Finance Committee.

B.	XYZ CHURCH does not accept as contributions any receipts for items bought by individuals for the use by the church (i.e., refreshments, teaching supplies, etc.).  Individuals making purchases on behalf of the church should submit those receipts to a staff member for possible reimbursement.

Undesignated Non-Cash Gifts

A.	Non-Cash Gifts: The gifts of stock, land, furniture, books, art, etc., will be acknowledged by letter from the church at the time of the gift, indicating the date received and a brief description (a legal description where appropriate) of the gift.  XYZ CHURCH cannot assume responsibility for substantiating deductibility for tax purposes of such gifts; the giver should seek out such information from tax counsel if tax deductibility is sought.

B.	Time & Service: No credit can be recorded on a giver=s record of contributions for the time and/or services contributed to XYZ CHURCH.

3.	Gifts in kind are recorded to the contributors non-cash contribution record and are an addendum to the computer generated cash contributions record.  The contributors total contribution record shall consist of the detail statement of cash contributions and contribution receipts for each non-cash contribution made.  Consolidated statements are available upon request.

Records of Contributions

A givers file of contributions will reflect the following:
1. Detail list of cash contributions.
2. Receipts for each gift in kind.
3. A consolidated statement for the above, if requested.
4. Gifts that are received on or before December 31 of the tax year.
5. Gifts that are unconditioned and without personal benefit.
6. Gifts that are for the use of the church and its specific activities.

To be included in a given year=s record of contributions, the gift must be received on or before December 31; if the gift is mailed to XYZ CHURCH, the envelope must reflect a postmark no later than December 31.  The rule of receipt shall apply in all cases.  Checks dated December 31, but actually received afterward (other than those checks delivered to the church by the U.S. Postal Service bearing a postmark of December 31 or earlier) shall be applied to the next year=s record of contributions.

Confidentiality of Contribution Records

The church Finance Office maintains strict confidentiality of all contribution records.  Without exception, no records are released without a signed release form from the contributor.

XVI.	Boards and Fee Based Programs

Introduction

Various programs of the church receive fees as a normal procedure for the program services, offered by the church.  Two examples of such programs are Weekday Preschool and the XYZ CHURCH Conservatory.  The programs are considered to be ministries of the church and do not "stand alone" in their own right.  The following policies and procedure statements are meant to give guidance to the operation of these programs and the board members who supervise them.

Policies and procedures

A.	All boards are to follow guidelines established by the church for their operation (attached).  Each board must follow the list of duties adopted for its operation, which includes the annual election of its officers.

B.	Each board is to meet regularly, preferably at least once per quarter.  Minutes of each meeting should be prepared by an elected secretary.  Copies of adopted minutes of meetings should be forwarded to the staff coordinator for review.  The staff member who supervises the program should maintain a file of all minutes and activity records of the work of the board.

C.	Fees received for the operation of these programs shall be deposited into the general fund of the church and shall not be considered expendable by governing boards, Ministry Teams, and staff.  The Finance Ministry Team shall review fees received and annual budgets (explained below) and make decisions in consultation with the Personnel Ministry Team, the board supervising the program, the staff members, and the pastor with regard to the financial status of the program.  The Personnel Ministry Team shall handle personnel reports, projections (explained below), and other personnel issues in like manner.  Expenses shall always be held at and below fees received unless otherwise noted, and be guided by prepared budgets.

1.	Offices and secretaries administering the programs may collect fees for the program.  Each check must be immediately stamped for deposit and receipt prepared and given to payer.  Appropriate records should be posted by secretary or staff member and receipts should immediately be given to the church Finance Office for deposit.  In no case should checks or cash be retained for any period of time.  If needed, copies should be made of checks for office use, and checks immediately taken to Finance Office for deposit using the prescribed procedures for cash transmittals (deposits).  Refer to Financial Policies for prescribed handling of cash, checks, and receipts.

2.	Exhausted receipt books should be forwarded to Finance Office.
Each month a report showing detail of fees received and transmitted to the Finance Office for deposit should be completed and forwarded to the pastor for administration for the Finance Ministry Team.  This report should show detail for students, fees per student classification, and total income for the month.

D.	Each board is to prepare  a projected budget of expenses for the next fiscal year for submission to the Finance and Personnel Ministry Teams (see attached budget work sheet).  This budget should project pure operating expenses.  If adopted it will be used as a guide for purchasing and meeting the expenses of the program.  Budgets should be prepared independent of projected program fees received and fee projections should not appear on budget work sheets.  Boards and staff should present this budget with full supporting detail and avoid budgeting expenses for any other church program.  There should be no attempt to expend all projected fees received.

1.	Equipment purchases should be itemized in detail.
2.	All other expenses should be itemized with enough detail to show the nature of the expense.

Expenditures from adopted budgets shall be authorized by requisition identifying appropriate information and account numbers.  Staff member administering the program should give a monthly report to the board of expenditures and receipts and other pertinent information of the financial status of the program.  The Finance Ministry Team may ask for additional explanation of expenses from either the board chairman or staff member in charge of the program.

Monthly financial statements shall include sections for each "fee-based" program reporting the annual budget, current month, and year-to-date expenditures.  These monthly reports shall be given to the staff member supervising the program, Finance Ministry Team, and Personnel Ministry Team.

E.	Each board is to prepare each year for the Finance and Personnel Ministry Teams a fee report.  This report should be divided into two parts.  The first part should include an explanation of the basic fee, a summary of fees received during the current year, and support statements for these fees (i.e., number of students, types of fees, fee received per student, number of days of operation).  The second part should include a projection of the same information for the next fiscal year.  Obviously, as in the case of the Conservatory, it will be difficult to project sign-ups for lessons, however, this will be taken into account when reviewing these reports.  Any fee increases/changes recommended by the board must be clearly noted.  The board chairman and staff member supervising the program shall recommend to the Finance Ministry Team of any proposed fee changes.  Proposed fee changes will be considered "adopted" only when they have been approved by the board making the recommendation and also by the Finance Ministry Team.  The Finance Ministry Team shall reserve the right to study and work with the appropriate boards to change the fee if needed.

F.	Each board is to prepare  each year for the Personnel Ministry Team a personnel report.  This report should be divided into two parts.  The first part should include a report of personnel for the current year (i.e., list names, positions, and compensation for each instructor, etc.) and summarize compensation paid.  The second part should include a request for personnel needed for the next fiscal year and compensation detailed on an individual basis and in total.  All requests for additional personnel must be clearly noted and documented.

1.	All requests for additional personnel must be presented with a job description for the position.
2.	A complete justification for the new or changed position must also accompany report.
3.	Job descriptions must be approved by both the governing board and the Personnel Ministry Team.

It shall be the policy of the church with guidance from the Personnel Ministry Team to maintain the following relationship with those providing services in the following ways:

1.	Weekday Preschool teachers shall be compensated with the wage to be recommended and approved by the Personnel Ministry Team.  Taxes shall be withheld by the church and matching social security shall be paid by the church.  W-2 forms shall be issued to each individual.
2.	Conservatory instructors are considered to be professional musicians and therefore shall be compensated on a contractual basis.  Contracts with instructors should be for the period of instruction and contain compensation amounts, dates of compensation, and all other terms necessary as adopted by the board and Personnel Ministry Team.  Contracts should be signed prior to the beginning of the instruction term by the professional instructor and the chairman of the board of the program.  A contract-based compensation does not involve any tax withholding obligation by the church or social security contribution.  Form 1099s will be given to each instructor to report their annual compensation from the church.

G.	The Personnel and Finance Ministry Teams will annual appoint Ministry Team liaisons to boards.  These representatives should be invited to all meetings of boards and be aware of all business conducted.  They should also receive copies of all minutes of meetings and annual budgets and reports.

XVII.	Solicitations and Benevolent Causes

The Finance Ministry Team wishes to clarify church policy regarding solicitations and benevolent causes.

The Finance Ministry Team understands the needs of many in the community and otherwise and appreciates the desire of the church membership to give aid to those in need.  However, church policy prohibits private solicitations through the Sunday School or any other church organization.  Exceptions to this statement would be projects such as "Adopt-A-Family" or any other project which is sponsored by the church are adopted as a program or emphasis churchwide.  In summary, any solicitations other than those adopted by the church and/or Finance Ministry Team are discouraged.  Any Sunday School class or any other church organization wishing to use their own forum to solicit funds for any cause must first have Finance Ministry Team approval.

With regard to contributions given to the church, tax laws clearly state that donations to the church specifically for the benefit of some named individual are not tax deductible.  Gifts given to the church must always go to the general fund offering or church approved designated funds for the gift to be tax deductible to the giver.  Therefore, the church always reserves the right to apply any gift to the general fund, approved designated funds, or otherwise approved projects and funds as deemed appropriate by the proper Ministry Teams and church business action.  The purpose of this policy, clearly, is to always protect the tax deductibility of the gift to the giver and maintain the integrity of the church where tax laws apply.

Cash gifts given to the church where the recipient is named as the gift is given (written on the check or otherwise) fall into the above category and are not tax deductible.  The church does have an approved benevolent fund for the purpose of helping those in need.  Gifts designated to that fund are used solely for that purpose.  When gifts are designated to that fund, suggestions can be made to the pastor and deacon chairman of people in need.  They, in turn, can then follow outlined steps to disburse funds from this benevolent account to help these in need.  This procedure protects the tax deductibility of the gift to the giver and keeps the integrity of the church clear to the IRS.

The Finance Ministry Team in no way wishes to diminish the Christian spirit of giving and helping, especially during the holiday season.  Very simply stated, persons or groups in the church wishing to give benevolent help to someone specifically should give cash and other items directly to that person and not through the church.  Groups seeking a coordinated effort for direct benevolent help to an individual should contact the Missions Ministry Team, Deacons, the Pastor, or the Associate Pastor for assistance.

Classes, departments, and other groups wishing to participate in the "Adopt-A-Family" project should use the attached guidelines for participating.

XVIII.	Adopt-A-Family Contribution Guidelines

The "Adopt-A-Family" program is an approved program of the church and therefore has been established as a designated fund.  Contributions may be received to this fund for the church to disburse to help families in need.  The following guidelines should be followed:

1.	Sunday School classes and other groups may work as a group in planning and carrying out their ministry to these families.

2	Contributions may be collected and turned in by the group for their ministry plans under the following outline:

a.	The contributor must use a church offering envelope for the gift.

b.	The envelope must be completed by writing "Adopt-A-Family" and the amount at the top of the envelope along with the name and address of the contributor.

c.	These offering envelopes can be collected, totaled, and turned in by a representative of the group.

d.	Contributions not enclosed in an envelope could possibly go to the general fund in error, therefore it is imperative to use envelopes for contributions.

3.	Someone from the class or group must give to the pastor for administration in writing a "suggestion" for the disbursement of these funds from the Adopt-A-Family designated fund for the class/group ministry project.  The pastor for administration will then handle the disbursement and work with the group so see that the funds are used appropriately.

The use of these guidelines will insure compliance to church policies for benevolent help and protect the deductibility of gifts to the contributor.

XIX. 	Foundation

This handbook shall incorporate the policies and procedures set forth in the Faith Family Foundation of XYZ Baptist Church administration guide in the administering of the foundation.   

XX.	Facilities Stewardship Policy 

This handbook shall incorporate the policies and procedures set forth in the Facilities Stewardship Policy of XYZ Baptist Church in the in all regards, especially those related to the financial stewardship of all church facilities, costs, fees, and expenses relative to such use.

XXI.	Audits

The Finance Ministry Team, the pastor for administration, the church treasurer, and the Finance Office shall budget for, plan, and accommodate an annual independent audit of all financial records and the preparation of an audit report and statements.  Such statements shall reflect guidelines for 501c(3) non-profit organizations and conform to those reporting requirements.  Arrangements for the annual audit shall be made by those listed above with a CPA firm meeting the criteria to perform such an audit.

XXII.	Addendums

A.	Expense Report / Reimbursement Request
B.	Purchase Requisition / Check Request
C	Purchase Requisition - Capital Assets & Equipment
D.	Cash Advance Report / Reconciliation
E.	Mileage Reimbursement Form
F.	Honorariums and Guest Expense 1099
F.	Cash (Deposit) Transmittal Form
G.	Church Issued Credit Card Monthly Statement Payment Voucher
H.	Finance Ministry Team Presentation Form