Westwood UMC Stewardship & Finance Committee

Financial Policies

As of 5/14/2014

Table of Contents

Policy on Fund Classification 2

The Primary Funds 2

Designated Funds 2

Financial Secretary Policies 3

Vouchers – Recorded as Contributions 3

Vouchers – Reimbursement 3

Weekly Contributions 3

Policy on Timecards for Employees 4

Timecard Policy—Employees 4

Counting Policy 4

Counting Committee 4

Financial Plans Policy 4

Cash disbursements process for church operations 4

Other financial policies: 5

Cash Receipts Process for church operations 5

Financial Staff Responsibilities 6

Financial Secretary / Administrative Assistant 6

Payroll Process for church operations 6

Church Treasurer / Assistant Treasurer / Designee 6

Procedures for Bill Paying/Vouchering 7

Policy on Fund Classification

The Primary Funds

Westwood UMC shall have three Primary Funds:

1.  Operating Fund – The Operating Fund (301.000) shall received and dispense monies required for the regular, day-to-day operation of the church.

2.  Project Fund – The Project Fund (302.000) shall receive and dispense monies required for materials and services outside the regular operation of the church but not including improvements, renovations or additions to the existing church-owned buildings or property.

3.  Capital Fund – The Capital Fund (303.000) shall receive and dispense monies required for improvements, renovations or additions to the existing church-owned buildings or property.

When making their annual Estimates of Giving, members may select to direct their giving to any or all of the three Primary Funds.

The Primary Funds are administered by the Church Council.

The Stewardship and Finance Committee provides Church Council with annual estimates of income and expenses relative to the Operating Fund. At their discretion, the Stewardship and Finance Committee may adopt a ledger system to best administer the Operating Fund and account for distinct lines of income and expense (e.g., “Estimates of Giving,” “Office: Supplies & Postage”).

The Trustees recommend expenditures from the Project Fund. The Trustees must be consulted when expenditures from the Project Fund or Capital Fund are under consideration by the Church Council.

Designated Funds

Westwood UMC shall have Designated Funds (305.000).

A Designated Fund is created to receive and dispense monies for specific ministry needs outside the Primary Funds. Each Designated Fund shall have:

1.  A fund name and number (e.g., ASP 305.302)

2.  A fund contact person responsible for depositing and vouchering disbursements from the fund.

3.  Designated funds that have had no activity within two years shall be considered by Stewardship & Finance Team for possible resignation. Stewardship & Finance will consult with the fund contact person to see if the fund is still required.

Financial Secretary Policies

Vouchers – Recorded as Contributions

  1. Church member fills out a voucher, indicating amount to be recorded and committee or ministry area for which the items were purchased; signs it or has it signed by the chair or leader of their committee or ministry area; keeps the pink copy for their records, and puts the signed voucher and associated receipt(s) in the Financial Secretary's mailbox.
  2. Financial Secretary adds the contribution to the church member's giving statement in Church Windows as a Special Contribution batch.
  3. Financial Secretary prints 2 copies of the detail report for the batch; one copy is stapled to the original voucher and receipt and filed in the Financial Secretary's file, and one copy is stapled to the yellow copy of the voucher and given to the Treasurer.

Vouchers – Reimbursement

  1. Church member fills out a voucher, indicating amount to be reimbursed and committee or ministry area for which the items were purchased; has the voucher signed by the chair or leader of their committee or ministry area; keeps the pink copy for their records and puts the signed voucher and associated receipt(s) in the Treasurer's mailbox.
  2. Treasurer debits the appropriate designated account and issues a check to the church member, either leaving it in the team mailbox, mailing it or leaving it in the office for pickup, as per the member's instructions.
  3. Treasurer files the voucher in his/her files.

Weekly Contributions

  1. Financial Secretary (FS) uses empty giving envelopes and money counters' counting sheet to record contributions for the previous Sunday, making sure FS's total matches the counters' total.
  2. FS prints three reports: one listing designated accounts and the total given to each account; one listing total given by each person; and one listing detailed breakdown of giving by each person indicating which accounts they contributed to. FS files reports, counters' sheet, envelopes, and receipt from bank deposit.
  3. Copies of the giving account report are filed with the envelopes and with the counters' sheet.
  4. Copies of the giving account report are given to the following regardless of contributions: Administrative Assistant, Pastor, Deacon, Music Director, Treasurer, Memorial Committee, Church Council, and Stewardship/Finance Committee. Copies are also given to the following committees if they received contributions: Altar, ASP, Alpha, Missions, and Trustees. Other committee chairs that wish to receive a copy may request it from the FS. This report does not list any givers' information, only total amounts given to each designated fund.
  5. FS will generate quarterly giving statements for church members; statements will be available by the end of the month after the quarter ends. To save on mailing costs, statements will be handed out at church. After two weeks, statements that have not been picked up will be mailed.
  6. FS will generate year-end statements for church members; statements will be available by the end of January. To save on mailing costs, statements will be handed out at church. After two weeks, statements that have not been picked up will be mailed.

Policy on Timecards for Employees

Timecard Policy—Employees

  1. Hourly employees (non-program staff) shall clock in at the beginning of their shift and clock out at the end of their shift using the time-clock in the financial office or provide a written or typed timesheet or timecard. Timecards will be provided.
  2. The two week pay periods will end on a Friday and employees will be paid on the following Wednesday. Timecards need to be submitted by the end of the employee’s shift on the Friday the pay period ends. Employees can request a list of the dates for the end of the pay periods.
  3. Timecards are not to leave the Church Office.

Counting Policy

Counting Committee

  1. Requires at least two unrelated persons to serve as the Counting Committee.
  2. Prepares a collection report, including a list of all checks received.
  3. Verifies that the amount written on the offering envelopes matches the contents of the envelopes and all checks are restrictively endorsed.
  4. Signs and dates collection report verifying everything recorded is correct.
  5. Deposits the funds in the bank in a timely fashion.

Financial Plans Policy

Proper handling of money is important to churches of all sizes. Internal accounting controls are essential in properly managing and caring for God’s resources.

Cash disbursements process for church operations

1.  Payables are initiated by the creation of a reimbursement voucher form for non-recurring purchases. The team leaders are given authority to approve purchases for each of their respective programs.

2.  The church treasurer reviews the check request forms and related invoice for propriety prior to processing the payment.

3.  Disbursements greater than $3,500 require two authorized signatures. The treasurer, assistant treasurers, office administrator and pastor are all authorized check signers.

4.  For non-recurring purchases, the check stub, invoice and check request form are stapled together and filed. Invoices for recurring purchases that are on auto-pay or placed on the church’s debit/credit card are printed and filed.

5.  The bank reconciliation is performed monthly by the church treasurer.

6.  On a monthly basis the finance committee reviews the fund activity report and the treasurer’s report displaying current year operating revenues and expenses versus approved budget balances.

Other financial policies:

1.  Check stock should be kept in a locked secure location.

2.  A check log should be used to account for the sequence of both printed and signed checks. Both the processor and check signer should initial the log.

3.  All purchases made by the church treasurer using the church debit card and any expense reimbursements should be authorized by and the check signed by another party.

4.  Signature stamps shall not be used.

5.  Canceled checks should be maintained and reviewed on a monthly basis by someone independent of the disbursement function.

6.  Copies of the Foundation investment statements or deposit confirmations should be provided to the church treasurer to ensure proper deposit of funds transferred to the WUMC Foundation.

7.  Network files containing sensitive finance information should be protected from unauthorized users.

Cash Receipts Process for church operations

  1. The Sunday offering is typically overseen by a group of ushers.
  2. The Sunday offering is placed in a bag and locked in the safe.
  3. All Sunday offering checks received are scanned the following business day.
  4. The Sunday offering is counted under dual control.
  5. A count sheet it utilized to document the amount collected from the Sunday offering.
  6. A count sheet is utilized to document their approval of recorded receipts.
  7. The counters take the deposit to the bank and agree the amount per the deposit slip to the total per the count sheet.
  8. The financial secretary posts the receipts to the individual donor’s accounts using the receipt module in the accounting software.
  9. The cash receipt register generated from the accounting software is reconciled to the amounts recorded on the count sheet and bank deposit slip.
  10. The count sheet, bank deposit slip, and cash receipt register are stapled together and filed by date.
  11. When possible, mail and walk-in receipts should be accepted, opened and recorded under dual control on a contiguous hand-written cash receipts log.
  12. The receipt log should be initialed by the receiver and should later be initialed by the church treasurer to document that a given receipt was deposited in the bank. Implementation: One of the counters should be the receiver/person who initials the log as the counters include mailed and walk-in receipts in the deposit that goes in with the Sunday offering, not the church treasurer.
  13. Receipts should be kept in a dual locking drop-box and receipts should be issued to individuals for drop-off payments. Implementation: Receipts that come in during the week are placed in the designated locked cabinet that has been installed.
  14. Drop off of mail receipts should be kept in a locked and secure location:
  15. No one individual should “sort” the Sunday offering prior to counting and recording the receipts.

Financial Staff Responsibilities

Financial Secretary / Administrative Assistant

  1. Records the contributions to each family’s contribution record.
  2. Prepares quarterly statement for each family’s contributions.
  3. Process automatic contributions through electronic fund transfers.
  4. Maintains filing system and storage system for all contribution records and for easy retrieval.

Payroll Process for church operations

  1. Hourly employees track their time on a spreadsheet or time card.
  2. Wage rates are authorized through the adopted annual budget
  3. The church treasurer reviews timecards while processing payroll.
  4. The church treasurer prepares payroll tax forms in a timely manner using tax forms generate from the general ledger software.
  5. The payroll entries in the general ledger post automatically after payroll is processed.

6.  The payroll register should be reviewed by someone independent from the payroll function.

  1. On a test basis, bank transfers should be traced from the bank statement to the respective amounts on the payroll register.
  2. Personnel records should be kept in a locked file cabinet.

Church Treasurer / Assistant Treasurer / Designee

  1. Process all checks, recording them in the appropriate accounting software program.
  2. Signs checks.
  3. Process all payroll checks, Tax Form 941’s, W-2’s and other government records required in a timely fashion.
  4. Insure that computer files are backed up weekly, at a minimum monthly, and the back-ups are stored off premises.
  5. Prepares the monthly and annual finance report.
  6. Supervise daily cash balances to insure sufficient funds are maintained.
  7. Maintains filing system and storage system for all financial records and banking records for easy retrieval.
  8. Prepares records for annual audit
  9. Maintain historical data, and establish a retention system for old financial records in accordance with government requirements (minimum of 5 years).
  10. Files all the required federal, state, and local tax forms.
  11. Assists in the preparation of the annual budget.

Procedures for Bill Paying/Vouchering

Each spending/expense account number (both operating and designated funds) must have ONE person who is ultimately responsible for what is spent from that account. That person must either sign or authorize someone to sign on all vouchers drawn on his/her accounts.

The exception will be for recurring bills such as gas/electric, waste, water, etc. as well as bills related to maintenance contracts such as for the copier, pest control, ect. Bills that are paid via autopay do not require a voucher.

All bills must be vouchered and signed by the appropriate signee. They shall keep the pink copy so that he/she can keep track of spending from the account. A yellow copy of the voucher for each bill paid must be in the treasurer's file for each account.

Once an operating line item has reached its budgeted amount, no further spending from that account can occur without a plan brought to stewardship & finance for where the money will come from. Expenses can come from another account that is under its allotted amount or a designated fund with funds. The responsible person must keep track of this additional spending for use in estimating the next year's budget.

The responsible person for each operating fund spending account must submit a budget to Stewardship & Finance by September 1 of each year for the next year's spending. Stewardship & Finance will remind the teams and committees of this and will provide in August a 3 years average of expenditures for each line item.

Stewardship & Finance will also do a 6 month review of the budget at or around June 30 and will revise line item budgets at that time if needed. They will bring this before Church Council. If, at any time, a budget line item adjustment is needed, the team or committee leader will bring it to Stewardship & Finance.

A plan must be in place for funding an expenditure before the event is held or materials purchased.

Debit Card: Any expense must be approved by the person responsible for the account that the money is coming from. Every transaction for the card should go through Beth Arbogast or Stephanie Knewtson, who will fill out a voucher for/with the responsible person.