MidAmerica Region Finance for New Treasurers Rae Jane Arujo, Heartland Treasurer Lisa Presley, Heartland District Executive
May 22, 2015
MidAmerica RegionFinance for New Treasurers
Rae Jane Arujo, Heartland TreasurerLisa Presley, Heartland District Executive
Finance for New Treasurers The Job of Treasurer
What are the main functions of a treasurer?w Custodian of Assetsw Record Keepingw Financial Service w Reportingw Compliance with Legal Requirements
Finance for New Treasurers The Job of Treasurer
Custodian of Assetsw Risk Assessment
w What possibility is there for mismanagement?
w Risk Mitigationw What policies do you have to protect the assets?
Multiple signatories? Duties divided?w Do you do criminal background checks on those
handling funds?w Do you have insurance and bonding to protect the
congregation?
Finance for New Treasurers The Job of Treasurer
Record Keepingw Usually done today using financial softwarew Record all receipts and all expendituresw Necessary to have back-up information in the
way of receipts, approval of expenditures, and tracking the donations received
w Need to comply with employment laws – consider using a payroll service to help you out
Finance for New Treasurers The Job of Treasurer
Financial Servicew Record receipts and payments (may be done
by bookkeeper separate from treasurer)w Preparation of annual budget
w With help from various committees requesting fundsw For approval by Board and Congregation
w Ensuring donation receipts submitted for tax purposes
w Investment of surplus funds
Finance for New Treasurers The Job of Treasurer
Reportingw Monthly financial reports to Board
w Profit and Loss – how you did in terms of budgetw Balance Sheet – how are your long term obligations
and assets doingw Cash Flow – how is the cash moving (different from
profit and loss)
w Annual report to Congregationsw Ensure regular reporting to persons in charge
of money management (committee chairs, staff)
Finance for New Treasurers The Job of Treasurer
Compliance with Legal Requirementsw Pay employment taxes on timew Issue employee W2 or 1099 forms timelyw Ensure donation receipts delivered w Pay any annual license fees, building permits,
etc. w File certifications i.e. 501(c)(3) non-profit
corporation
Finance for New Treasurers Ministerial Compensation Explained
w Complex, to say the leastw Employee and not at the same time
w Employee for W2 and taxesw Self-employed for Social Security filings
w Usual parts of ministerial financial dealings:w Salary and Housing = Salary for most peoplew Benefits – Insurance and Pensionw Professional Expensesw Contributions in lieu of FICA
Finance for New Treasurers Ministerial Compensation Explained
w Salary and Housingw Not subject to mandatory withholdingw Congregations and minsiters may enter into voluntarily
w Housing allowance – way to minimize taxesw Must be set by Board motion prior to paymentw May be changed, but must be by Board motionw Is not subject to income taxes, but is subject to SECA
w Salary is “left over” after determination of housingw Subject to taxes and SECA
Finance for New Treasurers Ministerial Compensation Explained
w Benefits and Pensionw Often through UUAw Mind the guidelines as to participation – some are all or
nonew Can be pre- or post- tax benefits
w Contribution in lieu of FICAw Recommended contribution of 7.65% in lieu of employer
cost of FICAw Taxable to minister, but tax on 7.65% is less than the
7.65%
Finance for New Treasurers Basic Accounting
Basic Accounting Equation
Assets = Liabilities + Owner’s Equity
Other names for Owner’s Equity are:
net assets
shareholder’s equity
Finance for New Treasurers Basic Accounting
Basic Accounting Equation Expanded
Assets =
Liabilities + (Income – Expenses) + Owner’s Equity
Finance for New Treasurers Basic Accounting
Basic Accounting Equation Expanded to Add Funds
Assets =
Liabilities + Fund Balances + (Income – Expenses) + Owner’s Equity
Finance for New TreasurersBalance Sheet
Balance Sheet summarizes the assets of the congregation (what you have) and the liabilities (what you owe) including what you’ve saved
Assets include property at cost Liabilities include what you owe to others Owner’s equity is total of surpluses over the years of
the congregation’s existence
Finance for New Treasurers Balance Sheet
Assets
Cash on Hand $100
Checking Account $300
Total Assets $400
Liabilities
Accounts Payable $ 30
Loan from Member $ 10
Hymnal Fund $ 80
Equity (Net Assets) $280
Total Liabilities $400
Finance for New Treasurers Balance Sheet
Assets = Liabilities + (Income – Expenses) + Equity
Account Type Increase Decrease
Assets Debit Credit
Liabilities Credit Debit
Finance for New Treasurers Balance Sheet
Assets = Liabilities + (Income – Expenses) + Equity
“Wait a second,” you say. “When I ask my bank to credit my account, it results in an increase. My bank account is my asset.”
Finance for New Treasurers Balance Sheet
Assets = Liabilities + (Income – Expenses) + Equity
The reason that works is that banks maintain your account on their books as their liability.
Account Type Increase Decrease
Assets Debit Credit
Liabilities Credit Debit
Finance for New Treasurers Cash Flow
Cash flow is how much cash is flowing through your accounts as income and expenses
May have more cash than current profit and loss would think possible
Question is basically whether you have cash on hand to pay for expenses, or is it tied up in other investments
Need to track to keep from bouncing checks!
Finance for New Treasurers Budgets
Budgets are a best guess of what income and expenses you’ll have over the year
Rarely are absolutely accurate, but help ensure that you don’t overspend
Best to involve committees and staff in preparation Need to review periodically to see where there are
deviations and correct for them
Finance for New Treasurers Q&A
What are your questions?