Church Finance, Accounting and Reporting - Part 2

ADVERT HERE

Historically, churches have not been run much on professional grounds.


Tapiwa Zuze

Their records have mostly been kept on small papers and exercise books, which in most cases disappear without proper accountability.

The chaos associated with church accounting and finance has cast a shadow of doubt even on the motives behind the establishment of some of the ministries. Considerable membership has been lost along the way, splits have been witnessed; with people pointing fingers at each other for misuse of public funds!

2. Obligation to Disclose:
Churches are primarily registered as voluntary; non-profit making organisations. They act as trustees of public resources. And one of the fundamental requirements of trusteeship activities is the duty to disclose the sources and uses of the resources. Church members must be periodically updated on the activities and transactions being undertaken under the name of their institution. They have a right to information, and to query certain transactions. Where clarity is sought, the church leadership should gladly do so without threatening the saints.

Tapiwa Zuze

3. Accounting Policies:
Churches should draft accounting policies that govern the way its accounting transactions are undertaken and recorded. It is dangerous to apply policies that are sitting with people in their minds without having any compiled documentation to authenticate the practices. Churches should move away from a “people-centred administration” to a “system-centred administration”. People should just bring their skills and improvements to the accounting system, than have the whole system of the church accounting rotating around them. In unfortunate situations where such “powerful individuals” are incapacitated, die or leave the church, they leave with everything they have set-up over the years! And rarely do churches really recover from such catastrophes.

Accounting policies that a church should have (well documented) should include the following:

(a) Asset Management Policy
  • Acquisition
  • Depreciation
  • Disposal
  • Use of the assets
  • Hiring
  • Intra-church transfers
  • Use of personal assets in church

(b) Petty Cash Policy
  • Floating amount
  • Maximum payment amount
  • Documentation required
  • Reimbursement
  • Keeping of cash
  • Authorised signatories
Tapiwa Zuze

(c) Banking Policy
  • Accounts opening procedures
  • Accounts modification procedures
  • Accounts closing procedures
  • Time of banking
  • Appointment of signatories

(d) Procurement Policy
  • Requisitioning of goods/services
  • Ordering of goods/services
  • Methods of getting quotations
  • Revenue expenditure documentation
  • Capital expenditure documentation

(e) Incomes Policy
  • Church incomes (tithes and offerings)
  • Special offerings (seeds and first fruits)
  • Periodic contributions (subscriptions)
  • Departmental incomes
  • Commercial incomes (businesses and investments)
  • Pledges
  • Honorarium and pastors’ welfare
The series continue in Part 3.

Tapiwa Zuze - www.tapiwazuze.com
ADVERT HERE

No comments

Contact Form

Name

Email *

Message *