2. Develop An Annual Budget
• Begin 3 months prior to start of the fiscal year
• Produce a chart of accounts
• Decide on an Operation (P&L) Statement format
Consolidated
Departments
• Build the budget from zero
Justify departments and expenditures
Based on the goals and objectives of the organization
3. Financial Statement Production
• Balance Sheet
For each month end
Show assets, liabilities and equity
• Operating Statement (P&L)
Monthly consolidated – actual versus budget and actual
versus prior year
Monthly by department – actual versus budget and actual
versus prior year
Year-to-date (YTD) Consolidated – actual versus budget
and actual versus prior year
Year-to-date by department – actual versus budget and
actual versus prior year
4. Financial Review Process Each Month
• Account by account review
Actual versus budget
Actual versus prior year
Reasons for variances
Corrective action – by whom and when
5. Reporting To Your Board of Directors
• Latest Balance Sheet
• Year-to-date Consolidated Operating Statement
• Year-to-date Operating Statement by
Department
6. Annual Independent Certified Audit
• Required for Teen Challenge International, USA
accreditation
• Required to meet ECFA standards
7. Reporting to the Internal Revenue
Service
• Form 941
▫ Employer’s Quarterly Federal Tax Return
• Form 990
▫ Return of Organization Exempt from Income Tax
This is public information
Watchdog groups
Guidestar
Wall Watchers
Ratio of expenses to total revenue
8. State Solicitation Registration
• Required by the following states for religious Non-Profit
Associations
Alaska
Arizona
Florida
Georgia
Illinois
Maryland
Minnesota
North Carolina
Tennessee
Utah
Wisconsin
• Non-religious associations need to file in all states
9. ECFA’s Seven Standards of Responsible
Stewardship
• Standard 1 – Doctrinal Statement
• Standard 2 – Board of Directors and Financial
Oversight
• Standard 3 – Financial Statements
• Standard 4 – Use of Resources
• Standard 5 – Financial Disclosure
• Standard 6 – Conflicts of Interest
• Standard 7 – Fund-Raising
