Treasurers’ Training Day March 11, 2017

Matters to Discuss Gifts and Receipts Receipting Practices Reporting Requirements Guidelines for Completing T3010 Parish Operating Receipts Parish Audit Guidelines Questions

What is a gift? 3 conditions must be met: gift must be made voluntarily there must be a transfer of property (cash or gifts-in-kind) there must be a financial sacrifice

Tax receipt cannot be issued directly for donated services Cheque exchange recommended Two distinct transactions must take place: a person provides a service to the charity and is paid for that service; the same person makes a voluntary gift of property to the charity

Is the gift eligible for tax receipt? A missionary from Anglican Church in India will be preaching to your parish. Your parish plans to collect an offering and sends the money to Anglican Church in India. Can this gift be accepted and receipted? Can this gift be forwarded to AC in India? General Rule: No. Alternatives must be found.

Is the gift eligible for tax receipt? A church member has a daughter going on a short-term mission trip with Anglican Church in US. He designates $5,000 in the offering envelope with instructions to pass the money back to his daughter. Can this gift be accepted and receipted? Can this gift be forwarded to the daughter? General Rule: No. Alternatives must be found.

Receipting Practices Establish a donation and/or receipting policy (ie., only donation over $100 will be receipted) One annual cumulative tax receipt may be issued for cash donations Gifts-in-kind require individual receipts Tax receipts are best issued to donors by the last day of February of the following year

Receipting Practices Keep a record that shows how the value of gifts-in-kind was determined. Gift-in-Kind over $1,000 professional appraiser is suggested. Name and address of appraiser must be included in the tax receipt.

Sample Receipt - Cash/Cheque/PAD/ Donation (No advantage)

Sample Receipt - Cash/Cheque/PAD/ Donation With advantage (ie Sample Receipt - Cash/Cheque/PAD/ Donation With advantage (ie., Free Parish’ Dinner)

Sample Receipt: Gift-in-Kind (Rarely Recommended)

Reporting Requirements Canada Revenue Agency T4/T4A slips (last day of February) T4A slips for honorarium, $500 or more (last day of February) Tax Receipts (last day of February) (not filed but maintained) Annual Charity Return Package (June 30th) GST66E, Application for GST Public Services Bodies’ Rebate (one month after June 30 and Dec 31st)

Books and records Type of Records Retention Period Records of meetings, Governing documents and by-laws Church membership records Permanent General Ledger Instructions for bequests and endowment gifts Other Records (bank statements, invoices/vouchers, donation records with donation envelopes, T4/T4As, charity return, budgets) 6 years

Data Back-up Develop written policy on how to perform data back-up Perform minimum twice a month Back-ups should be kept offsite Regularly (ie., monthly) test the backup to ensure the data is retrievable

Reporting Requirements WorkSafe BC Payroll and Contract Labour Report (only if payroll is done by parish)

Reporting Requirements Diocese of New Westminster PAD Updates (12th day of the month) Monthly Remittance (14th day of the month) Vestry Report (mid-March) Parish Operating Receipts (April 30th) Financial statements (April 30th) Preliminary Assessment Form (Sep 30th) Final Assessment Form (Oct 31st) Planning Schedule – p5 of Treasurer’s Manual

Purposes of T3010 To provide information to the public To serve as a compliance tool for CRA: a) assess whether the charity meets its annual spending requirement b) assess whether a charity transferred any money to non-qualified donees

Completing T3010 Use the correct version of T3010. T3010 E (16) for year 2016

Completing T3010 Report the “Gifts from charities” in Line 4510 (ie., grants from Diocese) Tax receipts should not be issued for gifts received from charities (other churches, foundations)

Completing T3010 Report the Diocesan assessment and flow- through donations in T1236, Qualified Donees Worksheet and in Line 5050, total amount of gifts made to Qualified Donees.

Completing T3010

Completing T3010 Allocation of Expenses: Lines 5000-5040 should agree with Lines 4950 and 5031

Completing T3010 Charitable Activities (Line 5000) all expenses that will directly further your charitable purposes (i.e., ministries/programs, priest’s salaries & benefits/organist’ honorarium, rent portion of the sanctuary or fellowship hall, prayer books, flowers for sanctuary)

Completing T3010 Management & Administration (Line 5010): include bookkeeping and admin personnel, Council meeting, office supplies, rent portion for the admin office) Other building expenses should be allocated b/w charitable and admin consistently.

Completing T3010 Fundraising (Line 5020): include expenses incurred to solicit donations.

Completing T3010 Include a copy of the financial statements duly signed by the treasurer. Failure to include is now a revocable offence.

Registered Charity Information Return Summary If the Registered Charity Return Summary is materially incorrect, file T1240, Registered Charity Adjustment Request.

GST 66E, GST Rebate (50% of GST paid) File twice a year 1st application – covers the first 6 months of your fiscal period (Jan-Jun) 2nd application – covers the last 6 months of your fiscal period (Jul-Dec) GST Refund should be reported in the financial statements as reduction of expenses, not an income

Parish Operating Receipts ASSESSABLE INCOME Operating Income Donations and gifts Diocesan Grants Investment Income (if used or transferred in operations) 50% of church hall gross rental income Rectory and land rental, net of expenses Fundraising and miscellaneous income Deficit funded by Restricted Funds (previously un-assessed funds)

Parish Operating Receipts NON-ASSESSABLE INCOME Onwards/Flow-through Donations (PWRDF, Care+Share, etc) Donations for Capital Purposes Donations for Restricted Purposes (funds not used for general operations ie., Endowment) Unrealized gains on investments (if not used in operations) GST Rebate (should be reported as reduction of expenses, not an income)

Parish Audit Guidelines Level of Revenue Diocesan Requirement $750,000 or more Full Audit $250,000 - $750,000 Review Engagement Below $250,000 Audit or Review Engagement not required If requested by: the Diocesan Treasurer and Business Administrator plus Legal Officer; or any two of the Bishop, Diocesan Treasurer, or Chancellor Audit