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Safeguarding Your Weekly Offerings: Financial Procedures for the Local Baptist Church


Safeguarding Your Weekly Offerings:Financial Procedures for Local Church

Financial Procedures for the Local Baptist Church

 

            When it comes to the protection of a church's weekly offering most churches are probably not up to speed on proper procedures and protections. Items such as bonding the treasurer, protecting the church treasurer, insurance protection towards embezzlement, and the challenges that most churches face while seeking to bring a church into full compliance can become a huge issue. Part of the usual set of challenges is a church, which has failed to keep up with tax-exempt requirements for having and keeping one’s 501c3 tax exemption status.

 

            Pastors preach about individual integrity and church integrity all the time. All of us have been challenged at one time or another to be more accountable unto the Lord. Yet there are times when a church refuses to implement the proper safeguards for protecting the church as it relates to the collection, depositing, and reporting of weekly funds received by the church. It is a surprisingly high number of churches who refuse to the church’s pearl, to do all that is required to practice proper protection in the realm of finances.  Now let me be the first to state that within the Greater Orlando Baptist Association, I would expect that the majority of our churches practice proper procedures for the collection of their weekly offerings. But since I have been here five years now and never have written a feature article on this topic, I felt now was the proper time.

 

            If you want to check on proper procedures, you may contact Linda Goans our Financial Administrator and request a new resource guide available to our churches entitled: Financial Procedures for the Local Baptist Church. 


            Most new churches struggle in this area and many never begin practicing the proper guidelines in church finances.  For example, are you correctly filing the W-2s for your ministers? Many a church tries to give them a 1099, which is not the correct procedure and can put the church at risk. Did you also know that you cannot make a gift to the local church and tell the church what to do with the money if you are going to report it as an offering. So many smaller churches have individuals who say where their weekly gift should go and do not realize that it cannot be counted as an offering because of such practices. 

 

            How about this other situation? You are part of the church where there are no checks and balances for protecting the offering once it has been given by the church membership thorough the collection plate. Has your church come to understand the imprudence of having a single individual in the church collect the offering and take it to another room without two or more individuals participating in the counting, recording, and depositing of the weekly offerings? Every church must have and practice solid financial controls and be assured that they are followed and in place. It is integrity issues for the local church; so do not waver in this issue. It jeopardizes the local church and by not having correct safeguards actively in place and being followed, could cause great harm to the church, its reputation, and its future ability to be considered a tax-exempt 501c3 non profit organization.

 

            There are many recommendations within this new resource, but suffice it to say there are: people safeguards, procedural safeguards, and offering safeguards, which should be practiced for the local church. Within the guide you can learn why it is vital, proper, and required to have two or more non-related individuals be with the money at all times. The local church never wants to open itself up to accusations of impropriety when it comes to collecting, and recording of the monies received weekly through the collection plate. Additional suggestions are found in the guide about how to record offerings for members and reporting offerings. It is sufficient to say that the treasurer should not deposit the weekly offering at the bank and the one who does deposit the weekly offering should never have access to the church recording records. By having separate functions of receiving and disbursing of the offering it is a proper practice and enables the church to remove any appearances of lack of propriety.

 

            Did you know that it is illegal to take money from designated gifts which were given by individuals to pay the monthly bills? A church can use these funds as collateral to allow the church to arrange a less expensive option for the general fund. When a church faces a crisis it is often tempted to take monies from designated funds, which were given for other areas. As a general rule it is not wise to have a growing number of designated funds. Many churches hurt their future by allowing the growing number of designated funds to exist. When people do not like the new direction of the church they will often try to hurt the church by designated weekly offerings in an attempt to cripple the work of the ministry. God has much to say about the danger of such practices.  

 

            Another thing you will discover within this manual is the recommendation that never should those counting the weekly offering be asked or take part in cashing checks for individuals by giving them cash in exchange for a check. This is something that should be decided by the body of deacons as a poor practice and avoided.  Did you know that checks should never be signed in advance of filling in the amount and the purpose of the check? Every church has check signers and they should be updated annually and given the authority to sign checks on the churches behalf. Having two signers on the check is also a great safeguard.

 

            Have you ever been told by church members not to issue them annual receipts for the gifts they give to the church? That too is inappropriate if you follow such a practice. The IRS requires for churches to issue annual receipts for giving to individuals. Failure to do so can place a church in danger of loosing its exempt status. I had one church which wanted to sell its building and there were those who wanted the sales to go to various members of the church as forms of retirement. That too is against the regulations and could land the individuals in prison.

 

            Keeping the church above reproach is vital to the reputation, integrity, and well being of its members. Keeping your church treasurer protected is so important. A good church treasurer is such a tremendous asset to the local body of believers. Here are some solid suggestions for safeguarding the church treasurer:

 

1.     Understand and identify the church treasurers vulnerability. Pray for them often, as this is a huge responsibility.

2.     Develop a job description and establish proper procedures for the management of all monies in the church.

3.     Limit the term of office for the church treasurer.

4.     Conduct regular internal audits annually and external audits at least every five years.

5.     Have the pastor and body of deacons meet periodically with the church treasurer to keep any potential areas of danger from placing the individual at risk.

6.     Undergird, support, and back the church treasurer in the reporting of the realistic financial situation of the church.

7.     Work with the church treasurer in conjunction with other church leaders in making the hard decisions in light of any declines in finances where reductions are required.

8.     Work with the church treasurer to determine a clear description as to who is authorized to spend the church’s money and for what purposes.

 

            The last brief introduction to safeguarding the offering at church is exactly that. Safeguarding the individuals who deal with monies is important. Safeguarding the procedures for the collection of monies is important. But the ongoing practice of safeguarding the weekly offerings, as they are collected is also vitally important.  More ideas can be found in the new resource available from the association office. Here are a few suggestions when it comes to the weekly offing collection:

 

1.     Practice a safeguard of counting and recording the offerings promptly after no less than two non-related individuals receive them at the end of the service.

2.     Count the cash in the offering plates twice to assure accuracy.

3.     Never cash individual checks for anyone from the offering plate.

4.     Place the offering in locked night depository bags which require a second key to open them at the banking institution.

5.     Place the locked bags in a safe or take them to the bank with a deacon and one other as part of the courier team.

6.     Have your church treasure go to the bank on Monday to reconcile the deposit with the offering forms that were filled out in the services the day before.

7.     If a safe is utilized at church, strictly restrict who has access to it.

8.     When individuals are rotated off of the counting team, remember to change the safe combination when an individual is no longer authorized to use the safe.

 

 

How to use the new guidebook from the association

 

We have designed this guidebook so that you can use it in two ways:

 

       Read it from cover to cover. It will familiarize you and the members of your financial team with all of the topics and issues presented. 


 

       Use it as a reference book when you have questions about the various topics. To help with this purpose, we have prepared an expanded Table of Contents and with the capabilities of Adobe Acrobat, you can do a word search for specific issues. Further information on special topics, such as computer software recommendations and a glossary of financial terms, are found in the Appendices at the back of the book. 


 

Along with this guidebook, we have available, upon request, samples of the various journals, reports, and forms that we recommend in this manual. Throughout this manual we will make references to the samples that are available. 
If you would like to have a printed copy of this guidebook you can contact Linda Goans our Financial and Administrative Assistant at: lgoans@goba.org for more information.