Finance for new treasurers draft aug 10
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  • 1. MidAmerica Region Finance for New Treasurers Rae Jane Arujo, Heartland Treasurer Lisa Presley, Heartland District Executive
  • 2. Finance for New Treasurers The Job of Treasurer
    • What are the main functions of a treasurer?
      • Custodian of Assets
      • Record Keeping
      • Financial Service
      • Reporting
      • Compliance with Legal Requirements
  • 3. Finance for New Treasurers The Job of Treasurer
    • Custodian of Assets
      • Risk Assessment
        • What possibility is there for mismanagement?
      • Risk Mitigation
        • What policies do you have to protect the assets? Multiple signatories? Duties divided?
        • Do you do criminal background checks on those handling funds?
        • Do you have insurance and bonding to protect the congregation?
  • 4. Finance for New Treasurers The Job of Treasurer
      • Record Keeping
      • Usually done today using financial software
      • Record all receipts and all expenditures
      • Necessary to have back-up information in the way of receipts, approval of expenditures, and tracking the donations received
      • Need to comply with employment laws – consider using a payroll service to help you out
  • 5. Finance for New Treasurers The Job of Treasurer
    • Financial Service
      • Record receipts and payments (may be done by bookkeeper separate from treasurer)
      • Preparation of annual budget
        • With help from various committees requesting funds
        • For approval by Board and Congregation
      • Ensuring donation receipts submitted for tax purposes
      • Investment of surplus funds
  • 6. Finance for New Treasurers The Job of Treasurer
    • Reporting
      • Monthly financial reports to Board
        • Profit and Loss – how you did in terms of budget
        • Balance Sheet – how are your long term obligations and assets doing
        • Cash Flow – how is the cash moving (different from profit and loss)
      • Annual report to Congregations
      • Ensure regular reporting to persons in charge of money management (committee chairs, staff)
  • 7. Finance for New Treasurers The Job of Treasurer
      • Compliance with Legal Requirements
      • Pay employment taxes on time
      • Issue employee W2 or 1099 forms timely
      • Ensure donation receipts delivered
      • Pay any annual license fees, building permits, etc.
      • File certifications i.e. 501(c)(3) non-profit corporation
  • 8. Finance for New Treasurers Ministerial Compensation Explained
    • Complex, to say the least
    • Employee and not at the same time
      • Employee for W2 and taxes
      • Self-employed for Social Security filings
    • Usual parts of ministerial financial dealings:
      • Salary and Housing = Salary for most people
      • Benefits – Insurance and Pension
      • Professional Expenses
      • Contributions in lieu of FICA
  • 9. Finance for New Treasurers Ministerial Compensation Explained
    • Salary and Housing
      • Not subject to mandatory withholding
      • Congregations and minsiters may enter into voluntarily
    • Housing allowance – way to minimize taxes
      • Must be set by Board motion prior to payment
      • May be changed, but must be by Board motion
      • Is not subject to income taxes, but is subject to SECA
    • Salary is “left over” after determination of housing
      • Subject to taxes and SECA
  • 10. Finance for New Treasurers Ministerial Compensation Explained
    • Benefits and Pension
      • Often through UUA
      • Mind the guidelines as to participation – some are all or none
      • Can be pre- or post- tax benefits
    • Contribution in lieu of FICA
      • Recommended contribution of 7.65% in lieu of employer cost of FICA
      • Taxable to minister, but tax on 7.65% is less than the 7.65%
  • 11. 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
  • 12. Finance for New Treasurers Basic Accounting
      • Basic Accounting Equation Expanded
      • Assets =
      • Liabilities + (Income – Expenses) + Owner’s Equity
  • 13. Finance for New Treasurers Basic Accounting
      • Basic Accounting Equation Expanded to Add Funds
      • Assets =
      • Liabilities + Fund Balances + (Income – Expenses) + Owner’s Equity
  • 14. Finance for New Treasurers Balance 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
  • 15. 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
  • 16. Finance for New Treasurers Balance Sheet
      • Assets = Liabilities + (Income – Expenses) + Equity
      • Account
      • Type Increase Decrease
      • Assets Debit Credit
      • Liabilities Credit Debit
  • 17. 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.”
  • 18. 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
  • 19. 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!
  • 20. 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
  • 21. Finance for New Treasurers Q&A
    • What are your questions?
  • 22.