Adfap bootcamp for economus 2015 by ann mayeen magno

A member firm of Ernst & Young Global Limited
ADFAP Bootcamp for
Economus
Using accounting information to make effective
management decisions
16 June 2015

The seven deadly sins of church accounting
ADFAP Bootcamp 2015

Sin one: Misuse of accounting information
Lapse:
► Church often forgets that accounting is an information-generating science designed to manage complex organization
in both the short-run and the long-run.
► Undue emphasis placed on operating budgets only with little emphasis placed on capital replacement plans
► There is a paucity of provisions for major repairs/replacements to buildings.
Resolve:
► The church ought to realize the many ways in which accounting statements are used in order to satisfy the various
requirements of the church.
► More careful planning through the establishment of contingency reserve accounts and addressing capital budget
problems before they become serious can greatly aid in long-term planning and viability for the church.
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Sin two: Limited acceptance of FS and problems with controls
Lapse:
► Financial statements were not important to the church custodian of funds as the focus is only on actual versus
budget operational reports, thereby ignoring critical information that was contained within the statements.
► Often congregations demonstrate lack of internal controls within the parish, such as only one signature is required on
a check with the result that incumbent church officers and employees are not able to appropriately utilize the funds
Resolve:
► Church officers, especially the handlers of funds must be more aware of the importance of the totality of the financial
statement information and its intended functions including controls.
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Sin three: Lack of understanding of financial information
Lapse:
► There are very few questions asked about the financial statements during parishes’ annual general meetings as
many people are intimidated by the complexity of the statements
► Congregants also do not understand the notes to the statements or focus on minute/trivial amounts as opposed to
more important issues.
► Most congregants are content with being told whether or not the parish is under, over or at budget, and then being
presented with a plan to address these issues, if problems exist.
Resolve:
► Financial statements should include a narrative budget and use charts and graphs in order to make points more
succinctly, as well as projected statements to see where the parish might be heading.
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Sin four: Donor fatigue when giving is not tied to relevant financial
information
Lapse:
► Congregants are often only given projected financial statement at the beginning of a financial campaign which could
lead to donor fatigue as they knew that the request for additional giving was forthcoming.
Resolve:
► Priests may provide regularly a one-page report that showed the difference between actual giving on a monthly or
yearly basis with comparisons on the previous month/year figures. Members of the congregation are found to be
encouraged to give when they see the improvement of numbers.
► A variance analysis as opposed to a projected statements may also lead to increased giving.
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Sin five: Lack of ownership for financial resources and uneven distribution
of cash flow
Lapse:
► During the summer months the need for cash is particularly acute owing to holidays and other reasons for non-
attendance
► Members of the congregation often do not feel that it is necessary to provide additional donations to the church for
provision of a sacrament (e.g. being married or baptizing a child) as that is what a church is supposed to do, despite
the fact that many church officials often perceive themselves as being overworked and underpaid.
Resolve:
► Frequent reports to the congregation regarding updates on fund collections and disbursement may lead to donations
being more evenly disbursed over the 12 months of the year rather than at Christmas (fourth quarter) and Easter
(late first quarter or early second quarter).
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Sin six: Being Shrouded in the Past
Lapse:
► The church often ignores the fair market value (the price that a given property or asset would get in the marketplace)
of its existing land and properties or other assets such as artwork or sacred vessels, sometimes gold and encrusted
jewels.
Resolve:
► Looking at the fair market values might be a consideration for a potential sale of church assets, integrating parishes
and relocation of parishes.
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Sin seven: Robbing Peter to pay Paul
Lapse:
► Congregations often do not link its revenues and expenses with its size.
► Many congregations are unreceptive to the idea of cutting expenses particularly if they are associated with salaries.
In cases of declining congregations, they often dip into capital or sell their assets to pay operating expenses.
Resolve:
► Congregations must link the revenue and expenses to the actual size of the congregation and use this information for
future planning.
► If the population is declining the revenue and the expenses should be adjusted accordingly to mirror those conditions.
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Financial vs. Management accounting
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Financial vs. Managerial accounting
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Information Financial accounting Managerial accounting
What information? Internal reportsFinancial statements
Who uses the information?
Managers who work for the company
and officers of the company
Stockholders, creditors, and
government regulators
When are the information
prepared?
Whenever neededQuarterly and annually
How much details are presented?
Very detailed, to address specific
decisions to be made by managers
Very general, pertaining to the whole
company
How are the information prepared?
In accordance with the needs of
managers and officers
In accordance with Generally
Accepted Accounting Principles
(GAAP)
How is the information verified?
By internal controls among
managerial accountants
By external CPAs

Selected topics in managerial accounting
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Cost allocation
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Revenue/Receipts Direct expenses
Floor area
Number of workers Direct wages
• Advertisement
• Discount allowed
• Provision for discount on debtors
• Travelling salesman’s salary and commissions
• Discount received
• Provision for discount on creditors
Value of asset
• Depreciation
• Repairs and maintenance
• Insurance
• Compensation to workers
• Holiday pay
• Group insurance
• Insurance
• Food and travel expenses
• Labor welfare expenses
• Personnel office
• Supervision
• Rent
• Insurance
• Utilities
Revenue/Receipts
• Advertisement
• Discount allowed
• Provision for discount on debtors
• Travelling salesman’s salary and commissions
Direct expenses
• Discount received
• Provision for discount on creditors
Floor area
• Rent
• Insurance
• Utilities
Number of workers
• Insurance
• Food and travel expenses
• Labor welfare expenses
• Personnel office
• Supervision
Direct wages
• Compensation to workers
• Holiday pay
• Group insurance
Value of asset
• Depreciation
• Insurance

Time value of money
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0 1 2 3
Future Value
PhP10,000 + interest
PhP10,000
Option A
Option B PhP10,000 - interest PhP10,000
Present Value
PhP10,000
Option A:
Received PhP10,000 today
Option B:
Received PhP10,000 after 3 years

Chart of accounts
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Income statement accounts
Revenues
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Account name Description
Revenues
Mass collection/Plate offering This includes collections during the Holy Mass on Sundays and weekdays
Stole fees
These are the offering of the faithful for the celebration of baptisms, confirmations, marriages and
funerals.
Donations/Undesignated gifts and
bequests These include amounts given by the faithful as donations to the Church without any specific intention
Other receipts/Other income
These include the fees paid for the publication of marriage banns, processing of marriage permits,
issuance of baptismal and confirmation certificates, donations from collection boxes inside the church,
sale of baptismal candles, decorations and other fees.
Interest earned
These are income received from deposits and deposit substitutes. At the end of the year the total is
entered to the Parish fund - Cash.
Chapel remittance This represents the 60% share of the Mother Parish in the net cash flow of the Chapels.
Net realized gains on investments This includes net earnings from the increases in value of the church’s investments
Restricted gifts not for operations This include donations specifically identified as not for the operations of the parish.
Capital fund receipts This include gifts specifically identified for as for capital acquisitions of the parish.

Expenses
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Parish pastoral programs
Parish Pastoral Council (PPC) Budget
This is composed of the approved budget of the PPC that will be coming from the Parish Fund, i.e.,
Formation expenses. (Retreat, Recollection Seminars).
Social Services/Charities:
This includes donations given to the poor and needy in the Parish. This account also includes expenses
of an organized social service in the Parish.
Preschool/Christian education This includes expenses for the educational programs run by the parish
Parish operating expense
Electricity and Water/Utilities This includes the bills from Meralco and MWSS
Telephone and other
Communication/Utilities This includes the PLDT bills, telex, fax, postage and other communication expenses.
Liturgical Paraphernalia
This includes sacristy supplies, mass wine, hosts, candles, flowers, decorations and missalettes,
charcoal and incense as well as liturgical pamphlets like Rite of Baptism.
Security Services This includes the payment of the salaries of security guards.
Office Supplies This includes cost of papers, pens, books, records and subscriptions to periodicals and newspapers.
Transportation Expense This account refers to the transportation expenses incurred by the parish personnel
Repairs and Maintenance
This includes building maintenance supplies (floor wax, brooms, brushes, soap, etc.), minor repairs of
buildings, minor repairs of equipment, retainer for equipment maintenance contracts for the Church,
Parish Office and Parish Hall
Other Operating Expenses These include those disbursements which were not in the category of those already defined.
Depreciation Expense - Parish This is the regular ordinary wear and tear of the asset being charged to operation on a periodic manner.
Gifts and Donations These include giveaways for Christmas and other donations for special occasions and feasts.

Expenses
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Parish rectory expense
Food
This includes the actual cost of all food items and catering in the Parish Rectory. Cost of food served
during the birthday or ordination anniversaries of any of the priests in the parish is not chargeable to this
account.
Repairs and maintenance -
transportation equipment
This includes actual repairs and maintenance of vehicles being used in the Parish for pastoral work. This
account also includes the repairs and maintenance of the cars of the Parish Priest and Parochial Vicar
which should not exceed the amount of PhP1,000 per month or PhP12,000 per year.
Transportation expense This includes actual transportation expense in the Rectory
Depreciation expense – Rectory This is the regular ordinary wear and tear of the asset being charged to operation on a periodic manner.
Lay Employee-Related Expenses
Salaries, Wages and Allowances
This includes the salaries of the employees, choirs and organists rendering services in the Parish Office
and the Rectory
13th Month Pay This includes the payment of an extra month for the year as provided by law.
SSS/Medicare/ECC/Benefits
This includes SSS benefits to lay personnel and workers, including workmen’s compensation, HDMF
and Phil Health.
Medical and Hospitalization Expense
This includes the expenses incurred by the Parish for its permanent employee’s medication and
hospitalization.
Catechist Allowances/Clergy salaries This includes additional amount given to the Catechists of the Parish aside from the Salary they received

Expenses
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Priest – related expenses
Decoroso sustento
This includes the Apostolate Fund of Guest Priests with official assignment from the Office of the Vicar of
Guests Priests in the amount of P10,000.00 per month. This also includes the stipend given to the
ministers who administer weddings, baptism, confirmation and funerals. This is also being charged for
the excess of the Mass Stipend given to priest over the Masses Fund balance.
Retreat and recollection
This includes the expenses incurred by the Priest for his continuing spiritual formation activities like
seminars and retreats.
Bahay - Pari dues These are the dues paid by the priests to Bahay- Pari
Medical and hospitalization expense
The hospitalization of Priests are taken cared of by the two hospitals; Cardinal Santos Medical Center
and San Juan de Dios Hospital. Take home and maintenance medicines are 50% subsidized by RCAM.
Transportation Allowance
This includes the gasoline allowance of all diocesan priests assigned in Parishes with a maximum amount
of P5,000.00 per month.
Repairs and Maintenance – Priest’s
vehicle
All diocesan priests assigned in Parishes are entitled to reimburse their expenses on repairs of their
personal car in the maximum amount of P1,000.00 per month.
Remittances
Catechesis
In the absence of a Catechetical Fund, expenses for the catechetical program in the parish on the
Archdiocesan level should be charged to this account.
Curia/Diocesan apportionment
This includes the contribution to the Chancery such as the Monthly offering, MASF, Poor seminarians,
Quota for the Standardization of the Apostolate Fund, Catechetical Quota, etc.

Balance sheet accounts
Assets
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Current assets
Petty cash fund
It is a fund set aside to take care of daily disbursements, usually not exceeding PhP500 to PhP1,000
depending upon the size of the Parish. This fund takes care of small disbursements.
Cash on hand
All cash, money order, checks received as payment, treasury warrants, which are still on hand and not
deposited in the banks.
Cash in Bank – Checking account
This is cash in bank in the form of Checking Account where all the disbursements are made through
checks. This account should be maintained in an automatic transfer system.
Cash in Bank – Savings account
This is Cash in Bank in the form of savings account where all the deposits made. Interest earnings on
this should be directly credited to the Parish Fund - Cash. The entry is Debit Cash in Bank and Credit
Parish Fund - Cash.
Investments
These are temporary short term investments (i.e., Short term Time Deposits) to earn interest on idle
funds on a short term basis.
Advances to employees
This represents cash advances given to employees payable in installments; SSS sickness benefits
pending their claims with the SSS, etc. This account is reduced every time an installment is made upon
receipt of deductions from payroll, SSS benefit claims, etc.
Accounts receivable This represents amounts lent to Priests and other parties other than the employees.
Due from the Parish Priest
This represents unpaid advances of the Parish Priest or over withdrawal of his Apostolate Fund at the
end of the accounting cycle.
Prepaid expenses These are already paid but not yet incurred such as Insurance, Rents, etc.
Unused supplies
These are supplies which are still unused at the end of the year or the month depending on the cut-off
period for report preparation.

Assets
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Long term investments
Time Deposit This represents investments in time deposits whose term go beyond one accounting cycle.
Other Long Term Investment This represents investments in stocks and other long term investments.
Land, Property and Equipment
Land
This represents land acquired by the Parish using Parish Funds. All land acquisitions should be done in
coordination with the Properties Administration Department of the Arzobispado de Manila.
Land improvement This includes wall enclosures, landscaping, grottos, pavements and other improvements.
Building and structure
This includes all cost of construction of the church, Parish Hall, Rectory, Office, garage and other
buildings.
Building improvement This includes major repairs of all building and structures
Furniture and fixture
This includes pews, benches, confessional boxes, chairs, beds, bookshelves, chandeliers, cabinets,
movable partitions, living room set, dining set, tables, missal stands, paintings and others.
Machinery and equipment
These include sound systems, amplifiers, microphones, generators, adding machines, calculators, air
conditioners, electric fans, electric motors, inter-communication system, projectors, video player,
mimeographing machines, tape recorders, television sets, typewriters, pumps and others.
Kitchen utensil and equipment
These include oven, stoves, refrigerators, coolers, freezers, rice cooker, pots, pans, plates, glassware,
silverware, china wares and others.
Transportation equipment This includes buses, cars, jeeps, motorcycles, bicycles, etc, owned by the Parish.
Sacred images and other accessories
These include statues, crucifixes, stations of the cross, candle holders, processional cart (Karo), glass
encasement of sacred images, benediction stand, incense boat, thurifer, etc.

Assets
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Sacred vessels This includes chalices, ciboria, cruets, monstrances, communion plates, tabernacles.
Altar linens and vestments
This account includes linens that are used in the altar and vestments worn by the Priest during the
services (Liturgical Celebrations).
Musical instruments This includes organs, pianos, guitars, harmonium, stereo, phono, violin, banduria, etc.
Accumulated depreciation This includes the wear and tear of the asset amortized periodically as stated in the policy on depreciation.
Construction - in - progress
All expenses and disbursements in connection with a major construction should be recorded in this
account until the construction is finished. Upon completion of the construction, the total cost of
construction will be transferred to Building and Structure account through a journal voucher.

Liabilities
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Current Liabilities
SSS/ECC/HDMF/PHILHEALTH
These are premiums deducted by the parish from the payroll of the employees to be remitted to SSS,
Pag-ibig and Phil Health.
Tax withheld These are income taxes deducted by the Parish from the payroll of the employees to be remitted to BIR.
Accounts payable These are unpaid accounts at the end of the year
Parish Priest’s Apostolate Fund This includes undisbursed apostolate fund and other stipends of the Parish Priest.
Advances from the Parish Priest Advances made to the Parish by the Parish Priest from his personal funds.
Mortgage payable (Current Portion) This is the portion of the loan which should be paid within the following accounting period.
Loan payable - ATF (Current Portion) This is the portion of the loan which falls due within the following accounting period.
Accrued expenses
These are expenses already been incurred as of the financial statement date but not yet paid like
Catechetical Quota, Monthly offering, MASF, SSS Premium, etc.
Interest payable
These are unpaid interest on mortgage payable. Computation is done at the end of the accounting
period based on the terms and conditions of the loan agreement.
Long Term Liabilities
Mortgage payable This include long term liabilities which are secured by a collateral like land and building.
Loan payable - ATF
This is a long term portion of the loan availed of through the Archdiocesan Trust Fund (ATF) of the
Archdiocese of Manila.

Liabilities
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Trust Funds
Masses fund
This includes stipends given by the faithful for the celebration of future masses (Pamisa). The stipend is
for the Minister who celebrates the Holy Mass for the requested intention.
Special collections
This includes collections for special intentions, i.e., Mission Sunday, Fil-Mission, Donations for Caritas,
Earthquake victims, etc.
Cemetery fund This includes contributions received for the use of the lots and the improvements in the cemetery.
Catechetical fund
This includes donations, contributions and collections for the expenses of the Catechetical program in
the Archdiocese and in the Parish.
Construction fund
This represents donation for construction projects of the parish and other fund raising proceeds intended
for construction activities in the parish.

Fund equity
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Parish fund – Cash
This is a portion of the fund equity showing the Cash (Cash on Hand and in Banks and other assets
convertible to Cash) balance.
Parish fund – Land, property and
equipment
This is a portion of the fund equity showing the value of the land, property and equipment acquired
through the use of the Parish Fund - Cash and loans.
Parish fund – Donated assets
This is portion of the equity showing the value of land, property and equipment which were donated to
the parish.

Bootcamp Exercises
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Vertical/Horizontal Analysis
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A parish priest is notified that the parish generated net loss of PhP48 thousand in 2014, way below the 2013 net income
figure of PhP314 thousand. The priest is astonished since the receipts in 2014 are PhP6.9 million while receipts in 2013
were only PhP6.4 million.
Analyze the financial result by doing vertical analysis and looking at the trends.
Hint:
Vertical analysis Horizontal/trend analysis
% to total Y-o-Y (%)
PhP000 2013 2014 2013 2014 2013 -2014
Receipts
Mass collection 2,225 2,055 (7.6)
Stole fees 1,262 1,484
Donations 1,054 1,245
Other receipts 540 797 47.6
Interest 428 465
Chapel remittance 866 910
Total revenue 6,375 6,956 100.0 100.0 9.1
Disbursement
Lay employee-related expense 1,387 1,843
Parish operating expense 1,339 1,521
Parish rectory expense 1,357 1,574
Parish pastoral programs 1,254 1,189
Priest-related expenses 646 823 27.4
Remittances 78 54
Total expense 6,061 7,004 95.1 100.7 15.6
Net income 314 (48) 4.9 (0.7) (115.3)

Fixed/variable expenses
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Identify whether fixed or variable expense.
Hint:
PhP000 2013 2014 Fixed/Variable
Liturgical paraphernalia 15,298 12,582
Depreciation expense - Parish 12,748 10,485 Fixed
Repairs and maintenance 7,863 8,550
Electricity and water 6,243 7,316 Variable
Gifts and donations 5,700 6,615
Telephone and other communication 5,242 5,700
Office supplies 3,800 4,410
Transportation 2,300 3,278
Security services 4,000 2,643 Fixed
Other operating expense 3,600 2,379 Variable
Total 66,795 63,958

Breakeven
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A parish's income statement for two years is given below. Upon checking, the parish priest was shocked by the net loss in
2014. He does not want to have another net loss in the coming years therefore he wants to find out the minimum revenue
needed to cover the parish operations.
He asked the treasurer to compute for the minimum revenue to at least cover the operating costs of the parish.
1. Compute for contribution margin
(Revenue less variable cost)
2. Compute for breakeven revenue
(Fixed cost over contribution margin ratio)
PhP000 2013 2014
Revenue:
Operating income:
Plate offering 8,820 6,879
Pledge receipts 75,684 73,847
Investment income 230 382
Other income 3,210 2,591
Undesignated gifts and bequests 600 554
Total operating income 88,544 84,253
Non-operating revenue:
Net realized gains on investments 645 933
Restricted gifts not for operations 1,405 864
Capital fund receipts 25,000 24,300
Total non-operating revenue 27,050 26,097
Total revenue 115,594 110,350
Expenses:
Operating expenses:
Clergy salaries 37,000 37,000
Lay employee salaries 21,500 19,842
Payroll tax expense 1,578 1,496
Benefits (pension, health ins., Etc.) 5,622 6,018
Diocesan apportionment 9,268 9,268
Utilities 13,345 15,637
Parish pastoral programs 1,200 793
Priest related expenses 1,900 2,205
Preschool/Christian education 1,150 1,639
Total operating expenses 102,833 103,039
Net operating totals (operating income less
operating expense) (14,289) (18,786)
Non-operating expenses:
Depreciation expense 9,837 8,436
Total non-operating expenses 9,837 8,436
Total expenses 112,670 111,475
Net profit 2,924 (1,125)

Breakeven
Hint
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Hint:
PhP000 2013 2014
Total revenue
Variable
Utilities
Office supplies
Parish rectory expense
Parish pastoral programs
Priest related expenses
Preschool/Christian education
Lay employee salaries
Total variable cost
Contribution margin
CM ratio 57% 55%
Fixed cost
Clergy salaries
Benefits (pension, health ins., etc.)
Diocesan apportionment
Depreciation expense
Total fixed cost
Breakeven revenue
Non-operating revenue 27,050 26,097
Minimum operating revenue requirement 80,686 82,868

Overall budgeting
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The priest reviewed the income statement of the church and was astonished with the negative net income for the year
2014.
The church is the second largest in the city and is aiming to be the largest (in terms of structural size and size of
congregation) in the coming years. To reach this, a budget committee is set up to plan, forecast and monitor the church's
expansion. This year, committee plans to improve events such as feasts, celebrations and outreach programs to attract
mass goers for the coming years. In addition, well-regarded priests are to be invited to lead the masses. These changes
entail an estimated 5% increase in program costs. Operating expenses are also projected to increase by 3% in 2014 then
remain stable in the next years. Depreciation is expected to increase by 2% yearly. From the new planned feasts and
celebrations, the income is expected to be at least PhP2.0 million yearly.
1. Given the expected income and other expense assumptions, compute for the target revenue for five years.
2. Plate offering and pledge receipts are expected to increase yearly by 3% due to the increase in mass goers. Other
items of revenue are expected to remain the same as the 2014 revenue. Given the revenue and expense assumptions
and without taking into consideration the target net income of PhP2.0 million, compute for the expected revenue for five
years.

Overall budgeting
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PhP000 2013 2014
Revenue:
Operating revenue:
Investment income 230 382
Other income 3,210 2,591
Undesignated gifts and bequests 600 554
Total Operating Income 88,544 84,253
Non-Operating Revenue:
Total Non-Operating Revenue 27,050 26,097
Total Revenue 115,594 110,350
Expenses:
Operating Expenses:
Clergy salaries 37,000 37,000
Lay employee salaries 21,500 19,842
Payroll tax expense 1,578 1,496
Benefits (pension, health ins., etc.) 5,622 6,018
Diocesan apportionment 9,268 9,268
Utilities 13,345 15,637
Parish pastoral programs 1,200 793
Priest related expenses 1,900 2,205
Preschool/Christian education 1,150 1,639
Total Operating Expenses 102,833 103,039
Net Operating Totals (14,289) (18,786)
Non-Operating Expenses:
Total Non-Operating Expenses 9,837 8,436
Total Expenses 112,670 111,475
Net profit 2,924 (1,125)

Overall budgeting
Hint: target revenues
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Hint: target revenues
PhP000 2013 2014 2015B 2016B 2017B 2018B 2019B
Expenses:
Operating Expenses:
Clergy salaries 37,000 37,000 38,110
Parish rectory expense 7,649 6,291 6,480
Lay employee salaries 21,500 19,842 20,437
Payroll tax expense 1,578 1,496 1,541
Benefits (pension, health ins., etc.) 5,622 6,018 6,199
Diocesan apportionment 9,268 9,268 9,546
Utilities 13,345 15,637 16,106
Office supplies 2,621 2,850 2,936
Parish pastoral programs 1,200 793 874
Priest related expenses 1,900 2,205 2,431
Preschool/Christian education 1,150 1,639 1,807
Total Operating Expenses 102,833 103,039 106,223 106,466 106,722 106,990 107,272
Total Expenses 112,670 111,475 114,828 115,243 115,674 116,122 116,586
Budgeted net profit 2,000 2,000 2,000 2,000 2,000
Target revenues

Overall budgeting
Hint: expected revenue
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Hint: expected revenue
PhP000 2013 2014 2015B 2016B 2017B 2018B 2019B
Revenue:
Operating revenue:
Plate offering 8,820 6,879 7,085 7,517
Pledge receipts 75,684 73,847 76,062 80,695
Investment income 230 382 382 382
Other income 3,210 2,591 2,591 2,591
Undesignated gifts and bequests 600 554 554 554
Total Operating Income 88,544 84,253 86,675 89,169 91,738 94,385 97,111
Non-Operating Revenue:
Total Non-Operating Revenue 27,050 26,097 26,097 26,097 26,097 26,097 26,097
Expected revenue 115,594 110,350 112,772 115,266 117,835 120,482 123,208
Expenses:
Operating Expenses:
Clergy salaries 37,000 37,000 38,110
Parish rectory expense 7,649 6,291 6,480
Lay employee salaries 21,500 19,842 20,437
Payroll tax expense 1,578 1,496 1,541
Benefits (pension, health ins., etc.) 5,622 6,018 6,199
Diocesan apportionment 9,268 9,268 9,546
Utilities 13,345 15,637 16,106
Office supplies 2,621 2,850 2,936
Parish pastoral programs 1,200 793 833
Priest related expenses 1,900 2,205 2,315
Preschool/Christian education 1,150 1,639 1,721
Total Operating Expenses 102,833 103,039 106,223 106,466 106,722 106,990 107,272
Total Expenses 112,670 111,475 114,828 115,243 115,674 116,122 116,586
Net profit 2,924 (1,125) (2,056) 23 2,161 4,360 6,621

Project budgeting
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The church's 200th anniversary is to be celebrated next year. The clergy is planning to invite the Cardinal to lead the
anniversary mass. Aside from the Holy mass to be held at the church, it is also planned for the Cardinal to visit other
churches around the town. The celebration is expected to last for one month. The table below shows the estimated
expense for the Cardinal’s visit.
In addition, the church is expecting to generate a profit from the Cardinal's visit for the church's anniversary. The head
priest is expecting at least 15% profit from the anniversary celebration through increased collection from the congregation
and other revenues including rosary and novena sales, etc. and sales of souvenir items during the event.
Souvenir items (3,000 pieces) are expected to be sold at PhP70.00 per piece at PhP60.00 cost. Other revenues are
usually PhP500 per month.
In connection with this, a budget is needed to be presented to the congregation for fund raising to cover costs.
1. Compute for the needed collection from the congregation to finance all cost for the Cardinal's visit.
2. Make a statement of receipts and disbursements to be presented to the congregation assuming that sources of
revenues are Plate offering, Pledge receipts, Souvenir sales and Other income. Assume further that Plate offering and
Pledge receipts are 20% and 80% of Revenue from collections, respectively.
PhP Budgeted expense
Decoroso sustento 20,000
Retreat and recollection 25,000
Bahay-pari dues 9,000
Medical and hospitalization expense -
Transportation allowance 5,000
Repairs and maintenance - priest's vehicle -
Cost of souvenirs 180,000
Total cost 239,000

Project budgeting
Hint
ADFAP Bootcamp 2015
Total cost
Expected profit ratio 15%
Revenue needed to reach the 15% target
Revenue from souvenir sales 210,000
Revenue from collection
PhP Proforma statement
Receipts
Plate offering
Pledge receipts
Revenue from collections 71,176
Souvenir sales
Other income 500
Revenue from other sources
Total revenue 281,676
Expenses:
Decoroso sustento 20,000
Retreat and recollection
Bahay-pari dues
Medical and hospitalization expense -
Transportation allowance 5,000
Repairs and maintenance - priest's vehicle -
Cost of souvenirs 180,000
Total cost
Net profit
Profit margin 15%

Budget vs. Actual cost
ADFAP Bootcamp 2015
After the event, an actual collection and disbursement was recorded and presented by the treasurer. Upon seeing the
statement, the head priest was astonished by the minimal profit turnout. He needs an analysis of the financial result as
well as explanation of the turnout.
1. Compute for the percentage difference
2. Provide possible reason for the difference
Hint
PhP Budget Actual Difference % Difference
Revenue from collections 71,176 76,568 5,392 8%
Souvenir sales 210,000 159,600
Other income 500 -
Revenue from other sources 210,500 159,600 (50,900) -24%
Total revenue 281,676 236,168 (45,508) -16%
Expenses:
Decoroso sustento 20,000 20,000
Retreat and recollection 25,000 27,309
Bahay-pari dues 9,000 9,000
Medical and hospitalization expense - 867
Transportation allowance 5,000 4,922
Repairs and maintenance - priest's vehicle - -
Cost of souvenirs 180,000 165,000
Total cost 239,000 227,098 (11,902) -5%
Net profit 42,676 9,070 (33,606) -79%
Profit margin 15% 4%

Capital budgeting
Bonus
ADFAP Bootcamp 2015
A parish is currently in the process of expansion and is upgrading its facilities. Donations were raised to buy a new
overhead projector and screen. The priest's secretary was asked to check overhead projectors and choose a brand with
the optimum specifications. He came up with a summary of three payment options offered by the appliance store.
Which option is least expensive for the church?
Option 1: full price
Full price 32,999
Discount 19%
Total cash payment 26,729
Option 2: Installment
Term 24 months
Per month 1,680
Interest rate 2.0%
Option 3
Term 12 months
Per month 3,680
Interest rate 5%

Capital budgeting
Bonus
ADFAP Bootcamp 2015
Bonus
Option 1 Option 2 Option 3
1 1,647.31 3,504.76
2 1,615.01 3,337.87
3 1,583.35 3,178.92
4 1,552.30 3,027.55
5 1,521.86 2,883.38
6 1,492.02 2,746.07
7 1,462.77 2,615.31
8 1,434.09 2,490.77
9 1,405.97 2,372.16
10 1,378.40 2,259.20
11 1,351.37
12 1,324.87
13 1,298.90
14 1,273.43
15 1,248.46
16 1,223.98
17 1,199.98
18 1,176.45
19 1,153.38
20 1,130.77
21 1,108.59
22 1,086.86
23 1,065.55
24 1,044.65
PV 26,729 31,780 28,416

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ADFAP Bootcamp 2015

Adfap bootcamp for economus 2015 by ann mayeen magno

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