GCBA Proposed Fin. Pol.

 

 

Gulf Coast Baptist Association

 

 

Financial Policies and Procedures

 

 

                

 

GULF COAST BAPTIST ASSOCIATION

FINANCIAL POLICIES AND PROCEDURES

 

TABLE OF CONTENTS

 

ARTICLE I.  FINANCIAL ORGANIZATION & RESPONSIBILITIES

 

            Section 1.  Office Clerical Staff                                                     Page 3                      

      Section 2.  Budget Planning                                                          Page 3

            Section 3.  Finance Team                                                              Page 4

            Section 4.   Association Treasurer                                                 Page 5

 

ARTICLE II.  RECEIVING, SECURING, COUNTING, AND DEPOSITING ASSOCIATION OFFERINGS

     

ARTICLE III.  SPENDING ASSOCIATION OFFERINGS

 

            Section 1.  Chart Of Accounts                                                       Page 5

      Section 2.  Annual Budget Preparation, Adoption and

                       Administration                                                              Page 6

            Section 3.  Restricted Fund Accounts                                          Page 7

            Section 4.  Payroll and Related Taxes                                       Page 7

            Section 5.  Disbursements                                                             Page 7

                              A.  Choosing Vendors

                              B.  Soliciting Quotes And Awarding Purchases       Page 8

                              C.  Receiving Merchandise and Services

                              D.  Honorariums

                              E.  Paying Bills

                                    1.  By Check

                                    2.  By Association Credit Cards

                                    3.  By Reimbursement To Staff Or Association Member                     

      Section 6.  Travel By Association Ministerial Staff, Employees,

                        and Groups On Association Business                    Page 10

      Section 7.  Ministerial Staff Salary and Employee Benefits

                        A.  Ministerial Staff Salary                                            Page 11

                        B.  Employee Benefits                                                  Page 12

                        C.  Housing Allowance                                                 Page 12

                        D.  Cell Phone Allowance                                            Page 12

     Section 8.  Non-Ministerial Staff                                                    Page 12        

 

ARTICLE IV.  ACCOUNTING FOR ASSOCIATION OFFERINGS AND THINGS OF VALUE OWNED BY THE ASSOCIATION

 

      Section 1.  Accounting Work Flow Of Weekly, Monthly, Quarterly,

                       and Annually                                                                 Page 13

Section 2.  Reporting To Association                                           Page 14

            Section 3.  Inspection of Financial Data by Association

                             Members                                                                       Page 14                                 Section 4.  Inventory of Association Property                             Page 14

            Section 5.  Record Retention                                                        Page 15

 

ARTICLE V.  SAFEGUARDING ASSOCIATION OFFERING AND PROPERTY

 

            Section 1.  Internal Controls                                                          Page 15

            Section 2.  Auditing                                                                         Page 16

            Section 3.  Insuring of Those Handling Association Funds      Page 16

            Section 4.  Insurance                                                                      Page 16

           

ARTICLE VI:  IMPLEMENTATION                                                            Page 16

 

ARTICLE VII:  AMENDMENTS                                                                 Page 17

 

ARTICLE VIII:  COMPLIANCE                                                                  Page 17

 

ARTICLE IX :  EXHIBITS                                                                            Page 18

 

ARTICLE I

 

FINANCIAL ORGANIZATION AND RESPONSIBILITIES

 

Section 1

 

Office Clerical Staff

 

The Financial Assistant shall hold the primary responsibility for the following activities.  Other office clerical staff may be called upon to assist with these activities from time to time at the discretion of the Association Missions Director (AMD).

 

A.  Receiving, securing, counting, and depositing all Association income (see Article II)

     

B.  Disbursement of Association funds (see Article III)

      1.  Chart of accounts

      2.  Annual budget

      3.  Designated accounts

      4.  Payroll and related taxes

5.  Disbursements for materials and services

6.  Travel by Associational staff and employees on Association business

7.  Ministerial staff salaries and employee benefits

8.  Non-ministerial positions

 

C.  Accounting for Association income (see Article IV)

1.  Work flow—weekly, monthly, quarterly, and annually

2.  Reporting to the Association:  preparation and distribution of financial reports

3.  Inventory of Association property

4.  Record retention

 

 

Section 2

 

Budget Planning

 

According to the Constitution and By-Laws of the Gulf Coast Baptist Association, the Finance Team is responsible for the preparation of a detailed yearly budget.  These responsibilities include:

 

1.    estimating the anticipated and potential annual income, based on past income,  prevailing economic conditions, planned program growth, and Association growth goals;

 

2.    soliciting, receiving, and considering budget requests from the Association staff and other Association teams;

 

3.    preparing an itemized proposed budget that reflects realistic needs to support the programs planned and that challenges the stewardship responsibilities of the Association.

 

4.    furnishing the proposed budget information to the Executive Board on or before its last regular meeting prior to the Fall Meeting of the Association; and

 

5.    presenting the proposed budget to the Association at it’s Annual Fall Meeting

 

 

Section 3

 

Finance Team

 

The basic function of the Finance Team is to oversee the use of the Association’s  financial resources, review the monthly financial reports, and advise the Treasurer on financial matters.

 

The Treasurer will serve as ex-officio member of this team.  Per the Association’s Constitution and By-laws, the Team shall consist of 6 additional members.  Members are elected to a term of 3 years, with terms staggered so that 2 members rotate off of the team each year.   No more than one member from any single church shall be named to the Finance Team at the same time.  The Team shall elect its own chairman annually.

 

It will be the responsibility of the Finance Team to:

 

1.    develop and recommend financial policies and accounting procedures to the Association;

 

2.    maintain a continuing review of Association finances and make recommendations required to keep the Association in a sound financial condition;

 

3.    arrange for loans from financial institutions when specifically authorized by the Association;

 

4.    review the monthly financial statements before they are presented to the Executive Board and the Association;

 

5.    receive and consider requests for expenditure of Association funds outside the approved budget.

 

 

 

 

 

 

Section 4

 

Association Treasurer

 

According to the Constitution and By-Laws the AMD shall serve as Treasurer of the Association. 

 

It shall be the duty of the Treasurer to receive, preserve, and pay-out, upon receipt of invoices approved and signed by authorized personnel, all money or things of value paid or given to the Association, keeping at all times an itemized account of all receipts and disbursements.  The Treasurer is authorized to disburse funds only as set out in the budget unless so ordered by the Executive Board or the Association.  It shall be the duty of the Treasurer, or his designee, to render to the Executive Board at each regular meeting an itemized report of the receipts and disbursements of the preceding period. 

 

The Treasurer’s report and records shall be subject to a review of transactions by the Finance Team.

 

     

 

ARTICLE II

 

RECEIVING AND SECURING ASSOCIATION INCOME

     

All personnel who handle Association monies shall be approved by the Executive Board to ensure that they are included under the Association’s commercial crime coverage insurance. 

 

 

ARTICLE III

 

DISBURSEMENT OF ASSOCIATION FUNDS

 

Section 1

 

Chart of Accounts

     

A chart of accounts with a description of each account shall be established and revised as needed.  This will ensure accuracy in bookkeeping, coordinate budget planning, and cost accounting.  All Associational leaders responsible for spending Association money shall be familiar with the account number assigned to each budget item under their respective area of ministry.

 

 

 

 

Section 2

 

Annual Budget Preparation, Adoption, and Administration

 

While the Finance Team is responsible for the preparation and adoption of the annual budget, it is the responsibility of the Treasurer to administer the budget.  The authority for disbursements comes from the budget adopted by the Association.  Current financial situations may dictate reduction or postponement of approval by the Treasurer or the Finance Team.

 

A.   Budget preparation and adoption by the Association

 

See Article 1, Section 2, page 3

 

B.   Monitoring and administering the budget

1.    The Financial Assistant, the Finance Team, and the AMD shall cooperate with each other in the task of monitoring the income and expenditures as the budget year progresses.

2.    In the event regular income trends becomes less than expenditures, closer monitoring and measuring of the budget shall be taken to ensure that operating cash is maintained at a reasonable level.

a.    Prior to initiating a purchase, the Financial Assistant or responsible staff member shall alert the AMD and the Finance Team, and a decision will be made whether or not the purchase is essential at the present time.

b.    In the event operating cash may not be sufficient to pay the next month’s bills, the Financial Assistant shall advise the AMD and the Finance Team and a plan should be developed.

C.   Authorizing over-expended budget accounts

1.    If it becomes apparent, during the monitoring process, that the funds budgeted for an account are not sufficient to maintain the desired program, then the Finance Team may reallocate budget from another account within the same budget section in order to keep the section total within budget.

2.    If excess funds do not exist, the Finance Team may request an amendment to the annual budget.  Any such amendments must be approved by the Executive Board.

 

D.   Authorizing unbudgeted expenditures

      The need for services or materials not included in the annual budget shall be estimated by the responsible group and submitted to the Finance Team and Executive Board for approval.

 

E.   Emergency Purchases

In the event circumstances occur that result in the immediate need of an expenditure of funds that are unbudgeted or create an over-expenditure of an account, the AMD is authorized to expend such funds, after notification of the Moderator and Finance Team Chairman.  Subsequent to the expenditure, the AMD will provide the Finance Team and Executive Board information documenting the emergency and need for action.

 

 

Section 3

 

Restricted Fund Accounts

 

A.   All donor restricted gifts shall have Finance Team approval before they are accepted.  Once donor restricted gifts are accepted, they are under control of the Association.  Such donor restricted gifts will be considered restricted until such time as expenditure is made or a period of one year passes.  At that time the funds are released from restriction and shall be available for Association operations or other identified purposes.

B.   Restricted funds shall be monitored and administered in accordance with the desire of the donor.  A file is to be maintained in the Association office by the Financial Assistant with instructions on each fund.

 

 

Section 4

 

Payroll and Related Taxes

 

The Financial Assistant, monitored by the Finance Team and AMD, shall be responsible for administering the payroll, related taxes, and required reports.  This responsibility shall be administered in compliance with Association By-Laws, Personnel Policies and Procedures, and the applicable current regulations and reporting requirements of the State of Mississippi and the Internal Revenue Service.

 

 

Section 5

 

Disbursements for Materials and Services

 

The authority for disbursements comes from the budget adopted by the Association annually.  Planned expenditures which were included in the budget planning process (missions, salaries, payroll taxes, social security, employee benefits, housing allowances, utilities, etc.) have standing authorization when budgeted and do not require additional approval.

 

A.   Choosing vendors

1.    Vendors and suppliers shall be chosen carefully, taking into consideration things such as quality, price, timely delivery, negotiated quantity, and cash discount when feasible.

2.    With the assistance of the Financial Assistant, a preferred list of reputable vendors who supply the particular materials and services we commonly use will be developed and maintained.  The underlying guide and motive shall be securing the very best value for our Lord’s money.

3.    Contractors working on Association property will be bonded and adequately insured.

 

B.   Soliciting written quotes and awarding budgeted purchases

1.    Written quotes shall be solicited on unique and competitive projects, equipment, materials, and contract services from vendors specializing in the product or services needed.

a.    The responsible ministry team or staff member, if possible, shall secure three (3) written quotes on all purchases in excess of $2500.

b.    The quote will be awarded to the supplier with the best evaluated quote.

c.    The successful vendor shall be informed and appropriate documentation shall be executed.

 

C.  Receiving merchandise and services

      1.  Deliveries by vendor or mail will occur as follows:

a. Inspect merchandise received and compare with the delivery ticket or packing             list.

b. Rectify any differences between the two.  Sign the delivery ticket or packing list   and keep a copy for verification with purchase order.  Some items may be back-ordered and delivered later.  File the delivery tickets and hold for invoice and payment.

Purchases made at vendor’s location by a representative of the Association will occur as follows: 

a.  Return the receipt to the Financial Assistant for payment.

b.  Reference the appropriate budget account on the receipt.

 

Services/repairs made on Association property will occur as follows:

a.    At completion of work, sign vendor’s service order.  Indicate on the ticket the appropriate budget account.  Inspect the work performed, if appropriate.

b.    Financial Assistant shall hold this package for receipt of invoice and payment.

 

D. Honorariums which exceed $600.00 annually paid to non-employees, e.g., guest   speakers, evangelists, etc. are reported by the Association on Form 1099-Misc. as income.  The accountable reimbursement plan shall be used to reimburse travel expenses

 

E. Paying Bills

Bills shall be paid timely and in accordance with the vendor’s terms or those mutually agreed upon.  Caution should be taken not to miss a cash discount or an early payment advantage.  Request should be made for a copy of any invoice on the statement that appears to be delinquent for investigation.  Caution shall be taken not to make a duplicate payment.  Bills are paid in the following manners:

 

 

By check

The Financial Assistant prepares the check and attaches it to the supporting documents.   All checks require two signatures and may be signed by any approved signers.

 

By Association credit cards

The Association has issued credit cards to each member of the ministerial staff as well as the Financial Assistant.  Credit limits have been established at $5000 for all cardholders.  Changes to these credit limits require the written approval of the Treasurer.  New cards will be assigned as necessary to new staff members.   The Financial Assistant will draft a letter, signed by the Treasurer, requesting new cards and establishing the appropriate credit limit. 

 

Association credit cards are intended for use for Association related expenses only.  NO personal purchases may be made with the Association’s credit card.

 

Gulf Coast Baptist Association operates under an accountable plan for expense reimbursement.  As such, it will be the policy of Gulf Coast Baptist Association to comply with all applicable requirements of the Internal Revenue Code Section 1.274(d) with regard to expense documentation.  All expenses charged on the Association credit cards must be substantiated with an original itemized receipt containing the following documentation:

                                               

a) Who – all receipts for meals, travel and other entertainment expenses must contain the name of each individual receiving benefit from the expense.

                        b)  What – a statement of the Association-related purpose for the charge

            c)  When – the date that the expense was incurred

            d)  Where – the location of the expense incurred

 

All members/staff using a credit card will be personally responsible for any purchase for which they do not obtain and turn in a proper itemized receipt.   

 

In case of a lost or stolen card, the Treasurer or the Financial Assistant shall be notified immediately so that the credit card company may be notified.

 

By reimbursement to staff or Association member

Budgeted expense items for the Association costing $250.00 or less, purchased with personal funds by the staff member responsible for administering their area of the budget, will be reimbursed upon presentation of a paid receipt. 

 

 

 

 

 

 

SECTION 6

 

Travel

 

The Association employs an accountable reimbursement plan with the following terms and conditions: 

 

A.   Ministry related business expense

The Association will reimburse only reasonable ministry related business expenses incurred by a member of the Association staff.  Subject to budget limitation, such expenses will include:

1.    Business use of personal automobile at a rate not to exceed the current IRS standard mileage rate.  Mileage must be substantiated by an accompanying mileage log and submitted for payment no more than 60 days after the expense is incurred.

2.    Business travel away from home:  transportation, lodging, and meals on overnight trips.

3.    Convention, conference and workshop expenses.

4.    Continuing education expenses.

5.    Subscriptions, books, and tapes, if related to ministry or employment.

 

B.   Travel by Association sponsored groups

1.    In the event it is necessary for a group; e.g. Disaster Relief or other, to travel outside the Association area the following should be presented in advance to the AMD.

a. Estimate of total cost to include food and lodging.

            b. Number of persons (including names and name of leader with contact number).

            c. Mode of transportation to and from destination.

d. Number of days expected to be gone with departure and arrival dates.

            e. Funds needed for advance deposit, registration or reservation.

            f. Group leader will be responsible for securing and providing receipts for budgeted/designated fund expenditures to the Financial Assistant.

           

C.  Method of Payment

      Payments for the above described expenses usually involve some combination of the following types of payments:

1.      Association credit card (Follow credit card policy—Article III, Section 5, Paragraph E 2).

2.      Advance check to the traveling staff member, employee or designated leader.  Travel or other advances requested by staff members shall be requested in writing, and submitted to the Financial Assistant.

3.      Personal funds (stated amount).

4.      To the extent allowed by these policies then reimbursement shall be made by Association.

 

 

 

 

D.  Accounting for allowable expenses

1.    Business use of personal automobile by the staff will be reimbursed monthly upon presentation of mileage log, meeting IRS requirements, at a rate not to exceed  the current IRS rate.

2.    The staff member will account for each allowable expense in writing for those expenses incurred in Paragraph A, B, and C, above, within 60 days using the monthly expense report.  A receipt will accompany the documentation reflecting the proper account number.

3.    The staff member will return advances that exceed actual business expenses along with the related expense report.  Likewise, if the advance was insufficient, a reimbursement by the Association will be forthcoming.

4.    Under this accountable arrangement, the Association will not report reimbursed amounts for allowable business expenses as taxable income on the minister’s or employee’s Form W-2. 

 

SECTION 7

 

Ministerial Staff Salary and Employee Benefits, Including Association Parsonage/Housing Allowance

 

Questions to be considered and answered by the AMD and the Executive Team when hiring new staff members:

·                     Does the new staff member qualify as a “minister” for tax purposes?

·                     Is the new staff member eligible for the housing allowance exclusion available under the Internal Revenue Code? 

 

The Finance Team should be knowledgeable of the application of various tax regulationsregarding compensation for ministers.  The team should be aware that premiums for insurance and retirement benefits paid directly to an employee will be reported by the Association as taxable income, thus potentially creating an unnecessary income and social security tax burden.

 

A.   Ministerial staff salary

1.    Determination of compensation shall be a mutual decision by the minister, appropriate search team, Executive Team, Finance Team, and approved by the Association.  The Search Committee (or Executive Team for non-ministerial employees) shall furnish the Financial Assistant a copy of the employment agreement including compensation benefits and allowances.

2.    Future changes in compensation and benefits shall be a mutual agreement between the minister, the Executive Team, and the Finance Team.  This is usually done during the annual budget preparation process for Association approval. The Executive Team has the authority to approve the yearly Housing amount for ministry staff.

 

 

 

B.   Employee Benefits

The Finance Team shall have input and concur with the written personnel policies prepared by the Executive Team concerning financial matters such as medical, life, and disability insurance coverage and retirement plan contributions.  The initial compensation determination shall itemize these benefits with Finance Team concurrence and Association approval.  Future changes may be recommended by the Executive Team for Finance Team concurrence and inclusion in the annual budget for Association approval.

 

C.   Housing Allowance

The Association shall provide each ministerial staff member a reasonable housing allowance, according to personnel policy.  The most important tax benefit available to ministers who own or rent their homes is the minister’s housing allowance exclusion available under Section 107 of the Internal Revenue Code.   These rules are complex and a full explanation is not rendered here.  Since the ministers are responsible for their personal income tax, it is strongly recommended that they consult a competent tax accountant or attorney.  However, in order for the minister to realize the full advantage of these tax exclusions, the Association has certain responsibilities.  In carrying out these responsibilities the Association may choose to secure professional advice.  These responsibilities include but are not limited to:

1.    Determination of who is a minister for tax purposes and thus eligible for the housing allowance exclusion

2.    Allowing  the minister to have input into the amount of his compensation designated as housing allowance, and observing the rules concerning exclusion

3.    Designation of the housing allowance.  This designation must be approved by the Executive Team and is prospective in nature.  It cannot be designated retroactively.    

4.    Determine whether the minister is employed or self-employed for proper Association handling of withholding tax and social security

 

D.        Cell Phone Reimbursement

The Association requires that all ministerial staff be able to be contacted by our pastors during a time of need.    As such, the Association will provide a monthly cell phone reimbursement to each member of the ministerial staff for the purchase of a cellular phone service plan.  Documentation of cell phone payments shall be provided by the employee.  If documentation is not provided then amounts paid will be reported on their W-2 at year end.

 

                                                            SECTION 8

Non-Ministerial Staff

A. Compensation consistent with the personnel and financial policies of the Association shall be recommended by the Executive Team with the concurrence of the AMD and the Finance Team.  The Executive Team shall provide the Financial Assistant a written and signed employment agreement for inclusion in the employee’s personnel file.

B.  Hourly paid employees will keep a written record of the time spent working.  Their supervisor or designee will verify time worked and approve the time sheet before a paycheck is written.

ARTICLE IV

 

ACCOUNTING FOR ASSOCIATION OFFERINGS AND THINGS OF VALUE OWNED BY THE ASSOCIATION

 

Section 1

 

Accounting Work Flow-Weekly, Monthly, Quarterly, and Annually

 

A.   The Financial Assistant shall maintain a chart of accounts describing each account in the financial system.  The Association staff, ministry teams, and all others involved in Association finances shall be familiar with the proper account number assigned to their respective areas of responsibility. They shall use the proper account number when preparing and administering the annual budget and securing and paying for material and services.

B.   The Financial Assistant shall maintain a policy file which defines restricted and designated funds and their purpose or function. 

C.   Using the computer and the software programs, the Financial Assistant shall be responsible for and perform the various accounting functions of the Association finances, following the financial reporting framework established by the Association, Association bylaws and financial policies, reporting requirements of the State of Mississippi and the IRS. These functions shall include, but are not limited to the following:

1.    Weekly

a.    Prepare checks, including payroll, for co-signature by the Treasurer or other designated check signers.

b.    Periodically review and evaluate balance left in budget accounts and notify appropriate persons if unusually low

c.    Make bank deposits in a timely manner

2.    Monthly

a.    Balance accounts

b.    Calculate payroll taxes

c.    Make federal tax deposits by the required dates

d.    Make state income tax deposit by the required dates

e.    Reconcile bank statement

f.     Pay monthly allowances to staff

g.    Pay reimbursements based on submitted expenses

h.    Prepare financial statements

3.    Quarterly

a.    Submit Employer’s Quarterly Federal Tax Return Form 941 by required date

b.    Pay Quarterly State Income tax withholding amounts by required date


 

4.    Annually

a.    Remind employees to submit a new Form W-4 if they need to change their withholdings

b.    Reconcile Forms 941 with Forms W-2 and W-3

c.    Provide copies of Form W-2 to employees by IRS stated deadline

d.    File copy A of Forms W-2 and the transmitted Form W-3 with the Social Security Administration by IRS stated deadline

e.    Furnish each qualifying recipient a completed form 1099 misc. by IRS stated deadline. 

f.     File copy A of all Form 1099 misc. and Form 1096 with the IRS by IRS stated deadline

g.    Furnish contribution acknowledgements to donors as necessary

h.    Review files and dispose of them according to retention schedule

i.      Set up new files

 

Section 2

 

Reporting to Association

 

A. The Association Treasurer or his designee will be responsible for making a report of the financial condition of the Association.

B.   He/she will report to the Executive Board at the quarterly meeting and to the Association at the bi-annual meetings in keeping with the Association policy. A copy will be furnished by the Financial Assistant to members not present at the meeting upon request.

 

Section 3

 

Inspection of Financial Data by Association Members

 

All financial data shall be open to inspection by Association members upon a written request for an appointment for such inspection.  The AMD or his designee shall be present for such inspection.

 

Section 4

 

Inventory of Association Property for Both Accounting and Inventory Purposes

 

A.   The Administrative Team is responsible for establishing and maintaining an inventory of all Association buildings, property, furniture, equipment, office machines, computers, and musical instruments.

B.   New items will be added to the inventory ledger when acquired.  Items disposed of, upon approval of the Administrative Team, will be removed from the ledger.

C.   An inventory will be conducted during the periodic internal audits.  Differences between the physical count and inventory ledger should be reconciled.

D.   The Administrative Team may enlist help from the staff and other ministry teams in inventory preparation and maintenance.

 

Section 5

 

Record Retention

 

A.   Retention schedule of records

The retention schedule in Article IX, Exhibit 2 may be very useful when cleaning out financial files to ensure that files are not destroyed pre-maturely.

B.   Back-up software in case of a computer failure or disaster

A backup of network shared files to tape will be performed daily rotating 3 tapes.  The tapes are to be stored in the fire proof file cabinet.  All financial data is backed up through the cloud by financial software provider CMS. 

 

ARTICLE V

 

SAFEGUARDING ASSOCIATION OFFERINGS

 

Section 1

 

Internal Control

 

A.   Internal controls are very important and should be our constant guide. They shall include but not be limited to the following.

 

1.        Endorse all checks “FOR DEPOSIT ONLY” as soon as possible

2.        Never cash personal checks out of Association monies

3.        Never make checks payable to cash

4.        Require two signatures on all checks

5.        Require check signers to inspect all supporting documents before signing checks

6.       Mark and keep all voided checks, voided receipts, and other numbered forms

7.       Reconcile the bank statement monthly and secure the Association Treasurer’s initial of approval

8.       All individuals involved in handling Association finances will be approved by the Association and covered under the Association crime insurance.

9.       Deposit counted monies in a timely manner

 

 

 

 

 

 

 

 

 

Section 2

 

Auditing

 

A.   An audit can verify accuracy of records, protect the reputation of the persons handling the Association finances, and allow proper error correction.  The reward of a good audit is to know that the process used is working as it should.

B.   Per the Association Constitution and By-laws, the Association financial records shall be audited annually by either an internal audit committee or a certified public accountant. 

 

1.    Internal audits will be performed by the Finance Team using as a guide the Audit Program found at Article IX, Exhibit 1.  Any errors shall be corrected and a report given to the AMD, Finance Chair, and Moderator for consideration and appropriate action.

2.    The Association Treasurer and the Finance Team may at its option, secure an independent auditor to perform an agreed upon procedures engagement to assist in evaluating the internal controls of the Association and their operation.

 

Section 3

 

Insuring Those Who Handle Association Funds

 

A.   The Association should approve all people handling the Association’s money. This will cover them under the officers and employees honesty section of crime coverage of our liability insurance policy.

B.   Names of the people handling money are not required to be listed in the policy.

 

Section 4

 

Insurance

 

The Administrative Team should periodically review insurance policies to maintain adequate coverage and make recommendations to the Finance Team for any changes.

 

 ARTICLE VI

 

IMPLEMENTATION

 

 After these financial policies and procedures have been reviewed and accepted by the Finance Team, Executive Team and the Executive Board, they shall be implemented by a majority affirmative vote of the members present and voting at either bi-annual Association meeting.  Certification of the financial policies and procedures being accepted by the membership shall be made by recording the results in the Association minutes and attaching this document to the minutes.  When adopted, these financial policies and procedures will supersede and nullify all previous financial policies and procedures of the Gulf Coast Baptist Association.

 

ARTICLE VII

 

AMENDMENTS

 

These financial policies and procedures shall be reviewed on a regular basis and amended when deemed necessary by The Finance Team.  Amendments will be presented to and recommended for Association approval by the Executive Board at their meeting prior to a bi-annual meeting at which time the Association will vote to approve the proposed amendment.

 

ARTICLE VIII

 

COMPLIANCE

 

Once approved, these financial policies and procedures shall be followed by all involved in Association finances until amended by the Association.  The Finance Team should not be expected to act in situations where these financial policies and procedures are not followed.  Also, any member of the Association will have the right to contest any financial action not in accord with these financial policies and procedures.  Therefore, all Association members, especially the Association staff and employees, Association elected officers, and ministry team members should become familiar with and follow these Association-approved financial policies and procedures.

 

 

ARTICLE IX

 

EXHIBITS

 

 

Exhibit 1   Internal Audit Program                                                  Page 18-19

Exhibit 2   Retention Schedule                                                      Page 20

 

                 

                                   

 

 

 

 

 

 

 

 

 

EXHIBIT 1

 

SUGGESTED INTERNAL AUDIT PROGRAM

PREPARING FOR THE AUDIT

1.  Select the period to be audited (month, quarter, year)

2.  Collect the required records needed for the audit:

Current Chart of Accounts

Checking and Savings account bank statements, with cancelled checks, voided checks and deposit slips.

Copies of the monthly Budgeted Financial Statement for the period audited

Copies of the Check Register for the period audited

Credit card statements for all cardholders for the period audited

Paid bills with all supporting documentation

 

 

CONDUCTING THE INTERNAL AUDIT

 

INCOME:

 

Review the bank statements for evidence of reconciliation by the Financial Assistant.

Personally reconcile all deposits on the bank statement for the audit period to the total income reflected on the monthly Financial Statements.

Check to see if all money received was deposited into the bank in a timely manner.

 

DISBURSEMENTS:

 

Select a sample of checks from the check register.  Review the corresponding cancelled checks to:

1.    Ensure that all checks were appropriately signed.

2.    Payee name and amount match that on the check register

3.    No erasures or changes are made on the checks

 

Review the check register to ensure that any checks made payable to a staff member were signed by someone other than the recipient.

Verify that each check included in the sample has sufficient supporting documentation provided (purchase orders, invoices, etc).

Ensure that the total disbursements from the check register matches the total disbursements from the Budgeted Financial Statements.  Reconcile any variances.

For Credit Card statements:

1.    Ensure that all charges are supported by an original receipt and meet the

           requirements set forth in the Finance Policies and Procedures Manual.

2.    Ensure that any lost receipts are documented on a Lost Receipt form which details the same requirements as above.

3.    Review statements to ensure that all purchases have a clear Association-related business purpose and that no personal charges were made.

 

PAYROLL:

 

§  Select one payroll from the audit period.  Examine payroll records (time sheets, etc) to ensure that the amount paid is in accordance with documented records.  

§  Ensure that pay rates are detailed in the employee’s personnel file.

§  Ensure that all benefit hours (vacation, sick-leave, etc.) are being recorded and are tracked by the Financial Assistant. 

§  Ensure that total benefit hours used are in accordance with Association personnel guidelines.

 

 

 

 

 

 

 

EXHIBIT 2

GULF COAST BAPTIST ASSOCIATION

RETENTION SCHEDULE

 

All Financial, Paper or Electronic, Information………………….5 Years

Offerings and Donation Information……………………………10 Years

Physical Inventory List *…………………………………………..Forever

*Should be maintained and current by the Administrative Team

 

 

Gulf Coast Baptist Association

 

 

Financial Policies and Procedures

              

 

GULF COAST BAPTIST ASSOCIATION

FINANCIAL POLICIES AND PROCEDURES

 

TABLE OF CONTENTS

 

ARTICLE I.  FINANCIAL ORGANIZATION & RESPONSIBILITIES

 

            Section 1.  Office Clerical Staff                                                     Page 3                      

      Section 2.  Budget Planning                                                          Page 3

            Section 3.  Finance Team                                                              Page 4

            Section 4.   Association Treasurer                                                 Page 5

 

ARTICLE II.  RECEIVING, SECURING, COUNTING, AND DEPOSITING ASSOCIATION OFFERINGS

     

ARTICLE III.  SPENDING ASSOCIATION OFFERINGS

 

            Section 1.  Chart Of Accounts                                                       Page 5

      Section 2.  Annual Budget Preparation, Adoption and

                       Administration                                                              Page 6

            Section 3.  Restricted Fund Accounts                                          Page 7

            Section 4.  Payroll and Related Taxes                                       Page 7

            Section 5.  Disbursements                                                             Page 7

                              A.  Choosing Vendors

                              B.  Soliciting Quotes And Awarding Purchases       Page 8

                              C.  Receiving Merchandise and Services

                              D.  Honorariums

                              E.  Paying Bills

                                    1.  By Check

                                    2.  By Association Credit Cards

                                    3.  By Reimbursement To Staff Or Association Member                     

      Section 6.  Travel By Association Ministerial Staff, Employees,

                        and Groups On Association Business                    Page 10

      Section 7.  Ministerial Staff Salary and Employee Benefits

                        A.  Ministerial Staff Salary                                            Page 11

                        B.  Employee Benefits                                                  Page 12

                        C.  Housing Allowance                                                 Page 12

                        D.  Cell Phone Allowance                                            Page 12

     Section 8.  Non-Ministerial Staff                                                    Page 12        

 

ARTICLE IV.  ACCOUNTING FOR ASSOCIATION OFFERINGS AND THINGS OF VALUE OWNED BY THE ASSOCIATION

 

      Section 1.  Accounting Work Flow Of Weekly, Monthly, Quarterly,

                       and Annually                                                                 Page 13

Section 2.  Reporting To Association                                           Page 1

Section 3.  Inspection of Financial Data by Association

                             Members                                                                       Page 14                                

Section 4.  Inventory of Association Property                                        Page 14

            Section 5.  Record Retention                                                        Page 15

 

ARTICLE V.  SAFEGUARDING ASSOCIATION OFFERING AND PROPERTY

 

            Section 1.  Internal Controls                                                          Page 15

            Section 2.  Auditing                                                                         Page 16

            Section 3.  Insuring of Those Handling Association Funds         Page 16

            Section 4.  Insurance                                                                     Page 16

           

ARTICLE VI:  IMPLEMENTATION                                                            Page 16

 

ARTICLE VII:  AMENDMENTS                                                                 Page 17

 

ARTICLE VIII:  COMPLIANCE                                                                  Page 17

 

ARTICLE IX :  EXHIBITS                                                                            Page 18

 

ARTICLE I

 

FINANCIAL ORGANIZATION AND RESPONSIBILITIES

 

Section 1

 

Office Clerical Staff

 

The Financial Assistant shall hold the primary responsibility for the following activities.  Other office clerical staff may be called upon to assist with these activities from time to time at the discretion of the Association Missions Director (AMD).

 

A.  Receiving, securing, counting, and depositing all Association income (see Article II)

     

B.  Disbursement of Association funds (see Article III)

      1.  Chart of accounts

      2.  Annual budget

      3.  Designated accounts

      4.  Payroll and related taxes

5.  Disbursements for materials and services

6.  Travel by Associational staff and employees on Association business

7.  Ministerial staff salaries and employee benefits

8.  Non-ministerial positions

 

C.  Accounting for Association income (see Article IV)

1.  Work flow—weekly, monthly, quarterly, and annually

2.  Reporting to the Association:  preparation and distribution of financial reports

3.  Inventory of Association property

4.  Record retention

 

Section 2

 

Budget Planning

 

According to the Constitution and By-Laws of the Gulf Coast Baptist Association, the Finance Team is responsible for the preparation of a detailed yearly budget.  These responsibilities include:

 

1.    estimating the anticipated and potential annual income, based on past income,  prevailing economic conditions, planned program growth, and Association growth goals;

 

2.    soliciting, receiving, and considering budget requests from the Association staff and other Association teams;

 

3.    preparing an itemized proposed budget that reflects realistic needs to support the programs planned and that challenges the stewardship responsibilities of the Association.

 

4.    furnishing the proposed budget information to the Executive Board on or before its last regular meeting prior to the Fall Meeting of the Association; and

 

5.    presenting the proposed budget to the Association at it’s Annual Fall Meeting

 

Section 3

 

Finance Team

 

The basic function of the Finance Team is to oversee the use of the Association’s  financial resources, review the monthly financial reports, and advise the Treasurer on financial matters.

 

The Treasurer will serve as ex-officio member of this team.  Per the Association’s Constitution and By-laws, the Team shall consist of 6 additional members.  Members are elected to a term of 3 years, with terms staggered so that 2 members rotate off of the team each year.   No more than one member from any single church shall be named to the Finance Team at the same time.  The Team shall elect its own chairman annually.

 

It will be the responsibility of the Finance Team to:

 

1.    develop and recommend financial policies and accounting procedures to the Association;

 

2.    maintain a continuing review of Association finances and make recommendations required to keep the Association in a sound financial condition;

 

3.    arrange for loans from financial institutions when specifically authorized by the Association;

 

4.    review the monthly financial statements before they are presented to the Executive Board and the Association;

 

5.    receive and consider requests for expenditure of Association funds outside the approved budget.

  

  Section 4

 Association Treasurer

 

According to the Constitution and By-Laws the AMD shall serve as Treasurer of the Association. 

 

It shall be the duty of the Treasurer to receive, preserve, and pay-out, upon receipt of invoices approved and signed by authorized personnel, all money or things of value paid or given to the Association, keeping at all times an itemized account of all receipts and disbursements.  The Treasurer is authorized to disburse funds only as set out in the budget unless so ordered by the Executive Board or the Association.  It shall be the duty of the Treasurer, or his designee, to render to the Executive Board at each regular meeting an itemized report of the receipts and disbursements of the preceding period. 

 

The Treasurer’s report and records shall be subject to a review of transactions by the Finance Team.

     

ARTICLE II

 

RECEIVING AND SECURING ASSOCIATION INCOME

     

All personnel who handle Association monies shall be approved by the Executive Board to ensure that they are included under the Association’s commercial crime coverage insurance. 

 

 ARTICLE III

 

DISBURSEMENT OF ASSOCIATION FUNDS

 

Section 1

 

Chart of Accounts

     

A chart of accounts with a description of each account shall be established and revised as needed.  This will ensure accuracy in bookkeeping, coordinate budget planning, and cost accounting.  All Associational leaders responsible for spending Association money shall be familiar with the account number assigned to each budget item under their respective area of ministry.

 

  

 Section 2

 

Annual Budget Preparation, Adoption, and Administration

 

While the Finance Team is responsible for the preparation and adoption of the annual budget, it is the responsibility of the Treasurer to administer the budget.  The authority for disbursements comes from the budget adopted by the Association.  Current financial situations may dictate reduction or postponement of approval by the Treasurer or the Finance Team.

 

A.   Budget preparation and adoption by the Association

 

  1. See Article 1, Section 2, page 3

 

B.   Monitoring and administering the budget

1.    The Financial Assistant, the Finance Team, and the AMD shall cooperate with each other in the task of monitoring the income and expenditures as the budget year progresses.

2.    In the event regular income trends becomes less than expenditures, closer monitoring and measuring of the budget shall be taken to ensure that operating cash is maintained at a reasonable level.

a.    Prior to initiating a purchase, the Financial Assistant or responsible staff member shall alert the AMD and the Finance Team, and a decision will be made whether or not the purchase is essential at the present time.

b.    In the event operating cash may not be sufficient to pay the next month’s bills, the Financial Assistant shall advise the AMD and the Finance Team and a plan should be developed.

C.   Authorizing over-expended budget accounts

1.    If it becomes apparent, during the monitoring process, that the funds budgeted for an account are not sufficient to maintain the desired program, then the Finance Team may reallocate budget from another account within the same budget section in order to keep the section total within budget.

2.    If excess funds do not exist, the Finance Team may request an amendment to the annual budget.  Any such amendments must be approved by the Executive Board.

 

D.   Authorizing unbudgeted expenditures

      The need for services or materials not included in the annual budget shall be estimated by the responsible group and submitted to the Finance Team and Executive Board for approval.

 

E.   Emergency Purchases

In the event circumstances occur that result in the immediate need of an expenditure of funds that are unbudgeted or create an over-expenditure of an account, the AMD is authorized to expend such funds, after notification of the Moderator and Finance Team Chairman.  Subsequent to the expenditure, the AMD will provide the Finance Team and Executive Board information documenting the emergency and need for action.

 

Section 3

 

Restricted Fund Accounts

 

A.   All donor restricted gifts shall have Finance Team approval before they are accepted.  Once donor restricted gifts are accepted, they are under control of the Association.  Such donor restricted gifts will be considered restricted until such time as expenditure is made or a period of one year passes.  At that time the funds are released from restriction and shall be available for Association operations or other identified purposes.

B.   Restricted funds shall be monitored and administered in accordance with the desire of the donor.  A file is to be maintained in the Association office by the Financial Assistant with instructions on each fund.

 

Section 4

 

Payroll and Related Taxes

 

The Financial Assistant, monitored by the Finance Team and AMD, shall be responsible for administering the payroll, related taxes, and required reports.  This responsibility shall be administered in compliance with Association By-Laws, Personnel Policies and Procedures, and the applicable current regulations and reporting requirements of the State of Mississippi and the Internal Revenue Service.

 

 Section 5

 

Disbursements for Materials and Services

 

The authority for disbursements comes from the budget adopted by the Association annually.  Planned expenditures which were included in the budget planning process (missions, salaries, payroll taxes, social security, employee benefits, housing allowances, utilities, etc.) have standing authorization when budgeted and do not require additional approval.

 

A.   Choosing vendors

1.    Vendors and suppliers shall be chosen carefully, taking into consideration things such as quality, price, timely delivery, negotiated quantity, and cash discount when feasible.

2.    With the assistance of the Financial Assistant, a preferred list of reputable vendors who supply the particular materials and services we commonly use will be developed and maintained.  The underlying guide and motive shall be securing the very best value for our Lord’s money.

3.    Contractors working on Association property will be bonded and adequately insured.

 

B.   Soliciting written quotes and awarding budgeted purchases

1.    Written quotes shall be solicited on unique and competitive projects, equipment, materials, and contract services from vendors specializing in the product or services needed.

a.    The responsible ministry team or staff member, if possible, shall secure three (3) written quotes on all purchases in excess of $2500.

b.    The quote will be awarded to the supplier with the best evaluated quote.

c.    The successful vendor shall be informed and appropriate documentation shall be executed.

 

C.  Receiving merchandise and services

      1.  Deliveries by vendor or mail will occur as follows:

a. Inspect merchandise received and compare with the delivery ticket or packing             list.

b. Rectify any differences between the two.  Sign the delivery ticket or packing list   and keep a copy for verification with purchase order.  Some items may be back-ordered and delivered later.  File the delivery tickets and hold for invoice and payment.

  1. Purchases made at vendor’s location by a representative of the Association will occur as follows: 

a.  Return the receipt to the Financial Assistant for payment.

b.  Reference the appropriate budget account on the receipt.

 

  1. Services/repairs made on Association property will occur as follows:

a.    At completion of work, sign vendor’s service order.  Indicate on the ticket the appropriate budget account.  Inspect the work performed, if appropriate.

b.    Financial Assistant shall hold this package for receipt of invoice and payment.

 

D. Honorariums which exceed $600.00 annually paid to non-employees, e.g., guest   speakers, evangelists, etc. are reported by the Association on Form 1099-Misc. as income.  The accountable reimbursement plan shall be used to reimburse travel expenses

 

E. Paying Bills

Bills shall be paid timely and in accordance with the vendor’s terms or those mutually agreed upon.  Caution should be taken not to miss a cash discount or an early payment advantage.  Request should be made for a copy of any invoice on the statement that appears to be delinquent for investigation.  Caution shall be taken not to make a duplicate payment.  Bills are paid in the following manners:

 

 

  1. By check

The Financial Assistant prepares the check and attaches it to the supporting documents.   All checks require two signatures and may be signed by any approved signers.

 

  1. By Association credit cards

The Association has issued credit cards to each member of the ministerial staff as well as the Financial Assistant.  Credit limits have been established at $5000 for all cardholders.  Changes to these credit limits require the written approval of the Treasurer.  New cards will be assigned as necessary to new staff members.   The Financial Assistant will draft a letter, signed by the Treasurer, requesting new cards and establishing the appropriate credit limit. 

 

Association credit cards are intended for use for Association related expenses only.  NO personal purchases may be made with the Association’s credit card.

 

Gulf Coast Baptist Association operates under an accountable plan for expense reimbursement.  As such, it will be the policy of Gulf Coast Baptist Association to comply with all applicable requirements of the Internal Revenue Code Section 1.274(d) with regard to expense documentation.  All expenses charged on the Association credit cards must be substantiated with an original itemized receipt containing the following documentation:

                                               

a) Who – all receipts for meals, travel and other entertainment expenses must contain the name of each individual receiving benefit from the expense.

                        b)  What – a statement of the Association-related purpose for the charge

            c)  When – the date that the expense was incurred

            d)  Where – the location of the expense incurred

 

All members/staff using a credit card will be personally responsible for any purchase for which they do not obtain and turn in a proper itemized receipt.   

 

In case of a lost or stolen card, the Treasurer or the Financial Assistant shall be notified immediately so that the credit card company may be notified.

 

  1. By reimbursement to staff or Association member

Budgeted expense items for the Association costing $250.00 or less, purchased with personal funds by the staff member responsible for administering their area of the budget, will be reimbursed upon presentation of a paid receipt. 

 

   

SECTION 6

 

Travel

 

The Association employs an accountable reimbursement plan with the following terms and conditions: 

 

A.   Ministry related business expense

The Association will reimburse only reasonable ministry related business expenses incurred by a member of the Association staff.  Subject to budget limitation, such expenses will include:

1.    Business use of personal automobile at a rate not to exceed the current IRS standard mileage rate.  Mileage must be substantiated by an accompanying mileage log and submitted for payment no more than 60 days after the expense is incurred.

2.    Business travel away from home:  transportation, lodging, and meals on overnight trips.

3.    Convention, conference and workshop expenses.

4.    Continuing education expenses.

5.    Subscriptions, books, and tapes, if related to ministry or employment.

 

B.   Travel by Association sponsored groups

1.    In the event it is necessary for a group; e.g. Disaster Relief or other, to travel outside the Association area the following should be presented in advance to the AMD.

a. Estimate of total cost to include food and lodging.

            b. Number of persons (including names and name of leader with contact number).

            c. Mode of transportation to and from destination.

d. Number of days expected to be gone with departure and arrival dates.

            e. Funds needed for advance deposit, registration or reservation.

            f. Group leader will be responsible for securing and providing receipts for budgeted/designated fund expenditures to the Financial Assistant.

           

C.  Method of Payment

      Payments for the above described expenses usually involve some combination of the following types of payments:

1.      Association credit card (Follow credit card policy—Article III, Section 5, Paragraph E 2).

2.      Advance check to the traveling staff member, employee or designated leader.  Travel or other advances requested by staff members shall be requested in writing, and submitted to the Financial Assistant.

3.      Personal funds (stated amount).

4.      To the extent allowed by these policies then reimbursement shall be made by Association.

 

 

 

 

D.  Accounting for allowable expenses

1.    Business use of personal automobile by the staff will be reimbursed monthly upon presentation of mileage log, meeting IRS requirements, at a rate not to exceed  the current IRS rate.

2.    The staff member will account for each allowable expense in writing for those expenses incurred in Paragraph A, B, and C, above, within 60 days using the monthly expense report.  A receipt will accompany the documentation reflecting the proper account number.

3.    The staff member will return advances that exceed actual business expenses along with the related expense report.  Likewise, if the advance was insufficient, a reimbursement by the Association will be forthcoming.

4.    Under this accountable arrangement, the Association will not report reimbursed amounts for allowable business expenses as taxable income on the minister’s or employee’s Form W-2. 

 

SECTION 7

 

Ministerial Staff Salary and Employee Benefits, Including Association Parsonage/Housing Allowance

 

Questions to be considered and answered by the AMD and the Executive Team when hiring new staff members:

·                     Does the new staff member qualify as a “minister” for tax purposes?

·                     Is the new staff member eligible for the housing allowance exclusion available under the Internal Revenue Code? 

 

The Finance Team should be knowledgeable of the application of various tax regulationsregarding compensation for ministers.  The team should be aware that premiums for insurance and retirement benefits paid directly to an employee will be reported by the Association as taxable income, thus potentially creating an unnecessary income and social security tax burden.

 

A.   Ministerial staff salary

1.    Determination of compensation shall be a mutual decision by the minister, appropriate search team, Executive Team, Finance Team, and approved by the Association.  The Search Committee (or Executive Team for non-ministerial employees) shall furnish the Financial Assistant a copy of the employment agreement including compensation benefits and allowances.

2.    Future changes in compensation and benefits shall be a mutual agreement between the minister, the Executive Team, and the Finance Team.  This is usually done during the annual budget preparation process for Association approval. The Executive Team has the authority to approve the yearly Housing amount for ministry staff.

 

 

 

B.   Employee Benefits

The Finance Team shall have input and concur with the written personnel policies prepared by the Executive Team concerning financial matters such as medical, life, and disability insurance coverage and retirement plan contributions.  The initial compensation determination shall itemize these benefits with Finance Team concurrence and Association approval.  Future changes may be recommended by the Executive Team for Finance Team concurrence and inclusion in the annual budget for Association approval.

 

C.   Housing Allowance

The Association shall provide each ministerial staff member a reasonable housing allowance, according to personnel policy.  The most important tax benefit available to ministers who own or rent their homes is the minister’s housing allowance exclusion available under Section 107 of the Internal Revenue Code.   These rules are complex and a full explanation is not rendered here.  Since the ministers are responsible for their personal income tax, it is strongly recommended that they consult a competent tax accountant or attorney.  However, in order for the minister to realize the full advantage of these tax exclusions, the Association has certain responsibilities.  In carrying out these responsibilities the Association may choose to secure professional advice.  These responsibilities include but are not limited to:

1.    Determination of who is a minister for tax purposes and thus eligible for the housing allowance exclusion

2.    Allowing  the minister to have input into the amount of his compensation designated as housing allowance, and observing the rules concerning exclusion

3.    Designation of the housing allowance.  This designation must be approved by the Executive Team and is prospective in nature.  It cannot be designated retroactively.    

4.    Determine whether the minister is employed or self-employed for proper Association handling of withholding tax and social security

 

D.        Cell Phone Reimbursement

The Association requires that all ministerial staff be able to be contacted by our pastors during a time of need.    As such, the Association will provide a monthly cell phone reimbursement to each member of the ministerial staff for the purchase of a cellular phone service plan.  Documentation of cell phone payments shall be provided by the employee.  If documentation is not provided then amounts paid will be reported on their W-2 at year end.

 

                                                            SECTION 8

Non-Ministerial Staff

A. Compensation consistent with the personnel and financial policies of the Association shall be recommended by the Executive Team with the concurrence of the AMD and the Finance Team.  The Executive Team shall provide the Financial Assistant a written and signed employment agreement for inclusion in the employee’s personnel file.

B.  Hourly paid employees will keep a written record of the time spent working.  Their supervisor or designee will verify time worked and approve the time sheet before a paycheck is written.

ARTICLE IV

 

ACCOUNTING FOR ASSOCIATION OFFERINGS AND THINGS OF VALUE OWNED BY THE ASSOCIATION

 

Section 1

 

Accounting Work Flow-Weekly, Monthly, Quarterly, and Annually

 

A.   The Financial Assistant shall maintain a chart of accounts describing each account in the financial system.  The Association staff, ministry teams, and all others involved in Association finances shall be familiar with the proper account number assigned to their respective areas of responsibility. They shall use the proper account number when preparing and administering the annual budget and securing and paying for material and services.

B.   The Financial Assistant shall maintain a policy file which defines restricted and designated funds and their purpose or function. 

C.   Using the computer and the software programs, the Financial Assistant shall be responsible for and perform the various accounting functions of the Association finances, following the financial reporting framework established by the Association, Association bylaws and financial policies, reporting requirements of the State of Mississippi and the IRS. These functions shall include, but are not limited to the following:

1.    Weekly

a.    Prepare checks, including payroll, for co-signature by the Treasurer or other designated check signers.

b.    Periodically review and evaluate balance left in budget accounts and notify appropriate persons if unusually low

c.    Make bank deposits in a timely manner

2.    Monthly

a.    Balance accounts

b.    Calculate payroll taxes

c.    Make federal tax deposits by the required dates

d.    Make state income tax deposit by the required dates

e.    Reconcile bank statement

f.     Pay monthly allowances to staff

g.    Pay reimbursements based on submitted expenses

h.    Prepare financial statements

3.    Quarterly

a.    Submit Employer’s Quarterly Federal Tax Return Form 941 by required date

b.    Pay Quarterly State Income tax withholding amounts by required date


 

4.    Annually

a.    Remind employees to submit a new Form W-4 if they need to change their withholdings

b.    Reconcile Forms 941 with Forms W-2 and W-3

c.    Provide copies of Form W-2 to employees by IRS stated deadline

d.    File copy A of Forms W-2 and the transmitted Form W-3 with the Social Security Administration by IRS stated deadline

e.    Furnish each qualifying recipient a completed form 1099 misc. by IRS stated deadline. 

f.     File copy A of all Form 1099 misc. and Form 1096 with the IRS by IRS stated deadline

g.    Furnish contribution acknowledgements to donors as necessary

h.    Review files and dispose of them according to retention schedule

i.      Set up new files

 

Section 2

 

Reporting to Association

 

A. The Association Treasurer or his designee will be responsible for making a report of the financial condition of the Association.

B.   He/she will report to the Executive Board at the quarterly meeting and to the Association at the bi-annual meetings in keeping with the Association policy. A copy will be furnished by the Financial Assistant to members not present at the meeting upon request.

 

Section 3

 

Inspection of Financial Data by Association Members

 

All financial data shall be open to inspection by Association members upon a written request for an appointment for such inspection.  The AMD or his designee shall be present for such inspection.

 

Section 4

 

Inventory of Association Property for Both Accounting and Inventory Purposes

 

A.   The Administrative Team is responsible for establishing and maintaining an inventory of all Association buildings, property, furniture, equipment, office machines, computers, and musical instruments.

B.   New items will be added to the inventory ledger when acquired.  Items disposed of, upon approval of the Administrative Team, will be removed from the ledger.

C.   An inventory will be conducted during the periodic internal audits.  Differences between the physical count and inventory ledger should be reconciled.

D.   The Administrative Team may enlist help from the staff and other ministry teams in inventory preparation and maintenance.

 

Section 5

 

Record Retention

 

A.   Retention schedule of records

The retention schedule in Article IX, Exhibit 2 may be very useful when cleaning out financial files to ensure that files are not destroyed pre-maturely.

B.   Back-up software in case of a computer failure or disaster

A backup of network shared files to tape will be performed daily rotating 3 tapes.  The tapes are to be stored in the fire proof file cabinet.  All financial data is backed up through the cloud by financial software provider CMS. 

 

ARTICLE V

 

SAFEGUARDING ASSOCIATION OFFERINGS

 

Section 1

 

Internal Control

 

A.   Internal controls are very important and should be our constant guide. They shall include but not be limited to the following.

 

1.        Endorse all checks “FOR DEPOSIT ONLY” as soon as possible

2.        Never cash personal checks out of Association monies

3.        Never make checks payable to cash

4.        Require two signatures on all checks

5.        Require check signers to inspect all supporting documents before signing checks

6.       Mark and keep all voided checks, voided receipts, and other numbered forms

7.       Reconcile the bank statement monthly and secure the Association Treasurer’s initial of approval

8.       All individuals involved in handling Association finances will be approved by the Association and covered under the Association crime insurance.

9.       Deposit counted monies in a timely manner

 

 

 

 

 

 

 

 

 

Section 2

 

Auditing

 

A.   An audit can verify accuracy of records, protect the reputation of the persons handling the Association finances, and allow proper error correction.  The reward of a good audit is to know that the process used is working as it should.

B.   Per the Association Constitution and By-laws, the Association financial records shall be audited annually by either an internal audit committee or a certified public accountant. 

 

1.    Internal audits will be performed by the Finance Team using as a guide the Audit Program found at Article IX, Exhibit 1.  Any errors shall be corrected and a report given to the AMD, Finance Chair, and Moderator for consideration and appropriate action.

2.    The Association Treasurer and the Finance Team may at its option, secure an independent auditor to perform an agreed upon procedures engagement to assist in evaluating the internal controls of the Association and their operation.

 

Section 3

 

Insuring Those Who Handle Association Funds

 

A.   The Association should approve all people handling the Association’s money. This will cover them under the officers and employees honesty section of crime coverage of our liability insurance policy.

B.   Names of the people handling money are not required to be listed in the policy.

 

Section 4

 

Insurance

 

The Administrative Team should periodically review insurance policies to maintain adequate coverage and make recommendations to the Finance Team for any changes.

 

 ARTICLE VI

 

IMPLEMENTATION

 

 After these financial policies and procedures have been reviewed and accepted by the Finance Team, Executive Team and the Executive Board, they shall be implemented by a majority affirmative vote of the members present and voting at either bi-annual Association meeting.  Certification of the financial policies and procedures being accepted by the membership shall be made by recording the results in the Association minutes and attaching this document to the minutes.  When adopted, these financial policies and procedures will supersede and nullify all previous financial policies and procedures of the Gulf Coast Baptist Association.

 

ARTICLE VII

 

AMENDMENTS

 

These financial policies and procedures shall be reviewed on a regular basis and amended when deemed necessary by The Finance Team.  Amendments will be presented to and recommended for Association approval by the Executive Board at their meeting prior to a bi-annual meeting at which time the Association will vote to approve the proposed amendment.

 

ARTICLE VIII

 

COMPLIANCE

 

Once approved, these financial policies and procedures shall be followed by all involved in Association finances until amended by the Association.  The Finance Team should not be expected to act in situations where these financial policies and procedures are not followed.  Also, any member of the Association will have the right to contest any financial action not in accord with these financial policies and procedures.  Therefore, all Association members, especially the Association staff and employees, Association elected officers, and ministry team members should become familiar with and follow these Association-approved financial policies and procedures.

 

 

ARTICLE IX

 

EXHIBITS

 

 

Exhibit 1   Internal Audit Program                                                  Page 18-19

Exhibit 2   Retention Schedule                                                      Page 20

 

                 

                                   

 

 

 

 

 

 

 

 

 

EXHIBIT 1

 

SUGGESTED INTERNAL AUDIT PROGRAM

PREPARING FOR THE AUDIT

1.  Select the period to be audited (month, quarter, year)

2.  Collect the required records needed for the audit:

  • Current Chart of Accounts
  • Checking and Savings account bank statements, with cancelled checks, voided checks and deposit slips.
  • Copies of the monthly Budgeted Financial Statement for the period audited
  • Copies of the Check Register for the period audited
  • Credit card statements for all cardholders for the period audited
  • Paid bills with all supporting documentation

 

 

CONDUCTING THE INTERNAL AUDIT

 

INCOME:

 

  • Review the bank statements for evidence of reconciliation by the Financial Assistant.
  • Personally reconcile all deposits on the bank statement for the audit period to the total income reflected on the monthly Financial Statements.
  • Check to see if all money received was deposited into the bank in a timely manner.

 

DISBURSEMENTS:

 

  • Select a sample of checks from the check register.  Review the corresponding cancelled checks to:

1.    Ensure that all checks were appropriately signed.

2.    Payee name and amount match that on the check register

3.    No erasures or changes are made on the checks

 

  • Review the check register to ensure that any checks made payable to a staff member were signed by someone other than the recipient.
  • Verify that each check included in the sample has sufficient supporting documentation provided (purchase orders, invoices, etc).
  • Ensure that the total disbursements from the check register matches the total disbursements from the Budgeted Financial Statements.  Reconcile any variances.
  • For Credit Card statements:

1.    Ensure that all charges are supported by an original receipt and meet the

           requirements set forth in the Finance Policies and Procedures Manual.

2.    Ensure that any lost receipts are documented on a Lost Receipt form which details the same requirements as above.

3.    Review statements to ensure that all purchases have a clear Association-related business purpose and that no personal charges were made.

 

PAYROLL:

 

§  Select one payroll from the audit period.  Examine payroll records (time sheets, etc) to ensure that the amount paid is in accordance with documented records.  

§  Ensure that pay rates are detailed in the employee’s personnel file.

§  Ensure that all benefit hours (vacation, sick-leave, etc.) are being recorded and are tracked by the Financial Assistant. 

§  Ensure that total benefit hours used are in accordance with Association personnel guidelines.

 

 

 

 

 

 

 

EXHIBIT 2

GULF COAST BAPTIST ASSOCIATION

RETENTION SCHEDULE

 

All Financial, Paper or Electronic, Information………………….5 Years

Offerings and Donation Information……………………………10 Years

Physical Inventory List *…………………………………………..Forever

*Should be maintained and current by the Administrative Team