1. FINANCIAL REVIEW of CHURCH ACCOUNTS
Treasurers’ Conference
Staverton
23 – 25 February, 2018

2. Local churches
As constituent entities of registered charities, local church accounts should: - reflect charity sector accounting standards. - be reviewed in light of those standards. - be compatible with those of the parent charity?

3. Basis of the Financial Review
Regulations: ‘Independent Examination of Charity Accounts’.
Charity Commission: Internal Financial Controls
Provides a review of accounts that is:
- linked closely to a statutory framework.
- suitable for smaller charitable entities.
- objective.
- standard.
- sensitive to changes in regulations and ‘best practice’.

4. Purpose of the Standards and the Review
Protect the local church’s assets and reputation.
Promote statutory compliancy.
Aid church governance…and, therefore, church mission.
Protect the treasury team by confirming its work.
Aid the treasury team by signalling ‘best practice’.

5. Scope of the Review The review looks at, and reports on:
- Receipts and payments for the year.
- Transactional recording.
- Financial planning.
- Financial reporting.
- Internal financial control.

6. Cash receipts ~ Deacons’ Offerings Record Book
Complete on Sabbath of receipt.
Two deacons count, complete, and sign-off.
Enter receipt numbers for offerings passed on to treasury.
Corrections:
- draw a line through and re-write…DO NOT over-write.
- if receipt figure differs, show it in the comments space.

7. Cash receipts ~ Receipt Book
Write and issue a receipt for each item of cash received
Show purpose(s) of monies received.
Ensure legible copies.
Encourage giving via plate offerings?
Deposit receipts at bank promptly and in full.

8. Pay from a cash float – not from retained cash receipts.
Cash payments
Pay from a cash float – not from retained cash receipts.
Use a Payment Authorisation Form:
- treasurer, co-authoriser, and recipient all to sign.
- attach supporting documentation.
- show date, amount, recipient, and purpose of payment.
- number, record in the accounts, file sequentially.
- keep cash payments to a minimum.

9. Bank receipts
List cash receipts banked on back of paying-in stub.
Record receipt details on a Bank Voucher:
- Show date, amount, source, purpose.
- attach any supporting documentation.
- number, record in the accounts, and file sequentially.

10. Use Payment Authorisation Forms:
Bank payments
Use Payment Authorisation Forms:
- treasurer + co-authoriser to sign / co-sign.
- record date cheques drawn, amount, payee, & purpose.
- attach supporting documentation.
- number, record in the accounts, and file sequentially.
- process cheques when drawn, not when appear on statement.
Complete cheque stub accurately, fully, and clearly
NEVER EVER sign blank cheques in advance!

11. Recording transactions
Record all transactions, showing:
- exact dates.
- receipt, cheque and voucher numbers.
- payers and payees.
- nature of transaction.
- accounts debited / credited.
- running balances on each account.
Distinguish between restricted and unrestricted monies.

12. Annual Budget
Prepare and approve budget before year begins.
Budget both receipts and payments.
Include all anticipated receipts and payments.
Show by restricted and unrestricted funds.

13. Financial reporting ~ Budget Control Statement
Produce monthly showing in columns and by account:
Budget Budget Actual Over/
for year to date to date Under (-)
Show total receipts, payments, and surplus/deficit to date.
Explain any unusual or large over/under figures.
Distinguish between restricted and unrestricted monies.

14. Financial reporting ~ Receipts & Payments Statement
Produce at least quarterly showing:
- all receipts and payments by account for the period.
- surplus / deficit for the period.
- restricted and unrestricted funds separately.
Include Management Notes explaining significant figures, trends, projections, KPI’s etc.

15. Financial reporting ~ Statement of Assets & Liabilities
Produce at least quarterly, listing:
- Current Assets (cash in hand, bank balances, etc.)
- Fixed assets (equipment, fixtures & fittings)
- Liabilities (accounts/loans payable)
- Funds (reserves)
Show by restricted and unrestricted funds

16. Internal financial control summary
“Internal financial controls are essential checks and procedures that help charity trustees [church boards]:
- meet their legal duties to safeguard the [church’s] assets.
- administer the [church’s] finances and assets in a way that
identifies and manages risk.
- ensure the quality of financial reporting by keeping adequate
records and preparing timely and relevant financial information.”
Ref. Charity Commission guidance ‘CC8’ section 1.1

17. For the future…
Could include:
- Standardised accounting procedures and systems.
Annual review of all local church finances.
- Local treasurer support mechanisms.

18. You are an indispensable element of church mission.
Thank You
Treasury teams!
You are an indispensable element of church mission.