Worship Attendance
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Worship at 8am
Worship at 9:30
Pre-Class Jabber
Worship at 11
Worship at 5pm (Commons)
Operations 103
Finances: Class 1
Level 1:
Certificate in Operations
 Operations 101—Staffing
 Operations 102—Communications
 Operations 103—Finances
 Operations 104—Finances
 Operations 105—Facilities
Operations 103—Finances
1.
2.
3.
4.
5.
Cash & Fungible Assets
Income
Expenses
Budgets
Reporting
6. Audits & Financial
7.
8.
9.
10.
Reviews
Financial Health
Tax & Legal
Insurance for
Employees
Insurance for the
church
Tech Issues
Do not “un-mute” yourself by
clicking the red microphone
If you are called on to speak, David
will un-mute your mic.
 The recording will be posted shortly
after class.
Today’s Topic
This topic sounds simple until you begin to define
it. Churches need great cash flow
management. They often handle a significant
amount of cash on Sundays and during the
week. There must be adequate procedures in
counting the offering, as well as security of offerings
and offering boxes. Churches must handle cash
advances and cash for youth trips.
Today’s Topic, cont.
There are often cash surpluses and cash reserves. If
stock is given, the church must decide to sell or hold
it. This class will define cash and fungible assets,
giving policy and practices on cash
management. Along the way, we will examine the
cash practices of a large church.
Chris Gunnare
Chris is the Chief Operations Officer at the Lutheran
Church of Hope in West Des Moines, Iowa. The church
has 9,500 in worship and Chris has come out of the
business community to his present position. Through
this leadership role in the church, he provides guidance
to the following ministries: worship, production,
fellowship, administration, finance, hospitality, facilities,
communications and Café Hope.
Chris Gunnare
Chief Operating Officer
Lutheran Church of Hope
West Des Moines, Iowa
Internal Controls
 What are they?
The American Institute of Certified Public Accountants defines it as all
the coordinate methods and measures adopted within an organization
to safeguard its assets…
Internal controls are a set of policies and procedures to prevent
deliberate or misguided use of funds for unauthorized purposes.
Internal Controls
 Why Do We Need Them?
"abstain from all appearance of evil“
(I Thessalonians 5:22).
"he must have a good report of them which
are without, lest he fall into reproach and
the snare of the devil“
(I Timothy 3:7)
"Let all things be done decently and in
order.“ (I Corinthians 14:40)
Internal Controls
 Why Do We Need Them?
Internal controls help to provide reliable data by ensuring that information is
recorded in a consistent way that will allow for useful financial reports
They also help prevent fraud and loss by safeguarding assets and essential
records.
Internal controls promote operational efficiency by reducing unnecessary
duplication of effort and guarding against misallocation of resources.
They encourage adherence to management policies and funding source
requirements.
Internal Control Audit
 Best way to get independent, outside appraisal of your
internal controls
 Fall of 2011, we had our first Internal Control Audit.
 We plan to schedule another control audit in 2014-2015
 We received 26 recommendations.
Internal Control Audit (cont)
 Don’t have to agree with all; Recommendation N
 Post revenue and expenses separate versus net
 We (CFO & council) choose to keep it as is
Priest stole $1.3 million in church money
The former St. Matthew Parish secretary
who embezzled more than $200,000 from
the church has been sentenced to prison
Aug. 24, 2012 - PHILADELPHIA
— A former executive of the
Philadelphia archdiocese is due
in court Friday to be sentenced
for stealing more than $900,000
from the church.
A pastor of a Lakeland
church is accused of
stealing more than $5,000
from the church, according
to an investigation by the
State Attorney's Office in
Bartow.
CLEVELAND, Ohio -- A longtime priest at
St. Helena Church on Cleveland's West Side
has pleaded guilty to stealing $176,000 from
the Romanian Catholic institution, a
prosecutor said.
The former bookkeeper of a South Jersey
parish has been charged with stealing more
than $245,000 from his employer.
Handling Cash
 Weekly Offering
 Collection
 Secure
 Counters
 Deposit
 Post
 Multi-Site
 Mid-Week Offering
 Class Fees
 Fellowship/Coffee $
 Bookstore
 Coffee Shop
Weekly Offering - Collection
 We use 24 ushers with 32 baskets for our worship
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center, 4 ushers with 8 baskets for our chapel
Volunteer Hospitality Captain oversees collection
All baskets brought to hospitality room
Uniformed police office outside/inside room
All cash/checks is sorted, bagged and brought to safe
by 3 ushers and uniformed officer
Weekly Offering - Secure
 Safe has a ‘rolling bin’ where the usher and office can
drop offering in safe
 Digital safe keeps log of whose access code opens the
safe
 Safe is professionally bolted to concrete floor in locked
room, in a remote location (not visible)
Weekly Offering - Counters
 We have twelve teams of four
 Team is by invitation only
 Volunteers have background & credit report checked
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on bi-annual basis.
No family members on same team.
Teams are rotated every two years
We have our finance assistant there for support
They enter all gifts on member contribution report
They count all cash, fill out deposit ticket and place in
sealed cash bag from bag and sign seal.
Counters
 Bag is dropped in safe
 Checks are placed in
batches of 100 checks
and totaled
 Entire team signs of
on report which
reports totals for
weekend
Deposit
 Monday morning the finance coordinator records the
cash bag number in her log book as well as the amount
of deposit (cash & change)
 Copy of deposit ticket stapled to the counter report (to
be filed).
 Note – the third copy remains in deposit book in teller
safe (for CFO / Treasurer review)
 Monday morning check are remote deposited by
finance secretary, batch report attached to counter
report
SHELBY TOWNSHIP, Mich. (WJBK) - St.
Therese of Lisieux Catholic Church in
Shelby Township was robbed of tens of
thousands of dollars after Easter Sunday
services. They drilled through the safe and
got away with almost $50,000.
Safe, money stolen from church in
Dixfield, Maine
Authorities are searching for the person took
a safe from a Concord church.
GULFPORT, MS (WLOX) - Burglars broke
into a Gulfport church and went away with a
safe and hundreds of dollars in cash.
JOHNSON CITY, Tenn. - According
to police, the person or persons got
into the church by kicking in an air
vent in the back of the building and
then went on a destructive spree,
looking for valuables along the way.
Johnson City Police say all locked
doors inside were kicked in and the
rooms ransacked. A safe was ripped
off the floor and the offering box
was torn off the wall.
Post
 Our giving module is interfaced with our GL (Item K
from internal audit)
 Finance coordinator posts the balancing entry each week
to the GL from ‘audited’ counter report.
 Finance coordinator confirms deposit amount and post
cash over/short to GL
Multi-Site
 We have three locations (all
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schools)
Each have 4 teams of Ushers
(similar to main site)
Ushers complete mini-teller
sheet
Checks, teller sheet, cash
place in numbered sealed
bag (number on teller
sheet).
All ushers sign over the seal
Bag is brought to main site
and dropped in safe for
processing by main site
counter team
Mid-Week Deposit
 Processed by volunteers on Wednesday
 Mid-Week report is filled out containing the total
deposit (checks & cash) amount
 Mid-Week report also provides the GL detail (account
numbers and amount for each)
 All Mid-Week sources have separate internal controls
 Coffee offering
 Fellowship offering
 Café Hope deposit
Cash Over-View
 Safety in numbers (two good, four better)
 Get amount counted & verified
 Get to bank
 AUDIT your controls
 Volunteer Audit Team = 8 accounting folks
 Groups of 2 will audit each unit several times per year
 Report of findings to CFO, Treasurer
 Review trends
May 13, 2013 – Stillwater Okla. - Dana Sue Eckhart 43 years of age, has been arrested
and charged with embezzling more than $141,000 from the UMC Stillwater, since
2009. According to authorities, UMC Stillwater informed police that Eckhart had
written unauthorized checks to herself, her husband and others from 2009 through
2012. The church also questions hundreds of purchases by Eckhart utilizing churchissued credit card. Dana Eckhart pleaded not guilty and is free on $50,000 bond
and due in court for preliminary hearing sometime in June 2013.
VIOLET, La. —A church secretary in
St. Bernard Parish was arrested for
what authorities said was systematic
embezzlement of more than $100,000
from her church.
JANESVILLE — The former
secretary of a Janesville church
wrote nearly $90,000 in forged
checks to herself over 10 months
last year… An accountant
uncovered 70 checks forged for
herself from First Congregational
United Church of Christ between
January and October of 2012.
A Granger woman pleaded guilty Tuesday to
using the postal service to help embezzle
$119,000 from a South Bend church she
worked at for eight years.
Loprest worked as a secretary at Hilltop
Lutheran Church from 2001-2009.
When the church’s bank contacted leaders
about an overdraft fee in 2009, they found
out they were nearly bankrupt.
For several years, Loprest had been
transferring money out of the bank’s
investment account. She would have the
checks delivered to the church, then deposit
them into their spend account and use the
money for personal expenses.
Check Writing
 Segregation of duties (from internal audit B)
 Authorization to execute transaction
 Recording of the transaction
 Custody of assets involved in transaction
 Signing of check
 Opening of bank
statement
 Reconcile Checking
Account
Credit Cards
 Send employee the statement at end of month
 Employee have receipts for ALL charges
 Each expense must be budgeted / approved prior to
purchase
 Employee states details on receipt and proper GL code
 Unauthorized expenses or mission receipts must be
paid back within 10 days
Other Controls
 Electronic Wire
 Our process (Audit F)
 ACH Payments
 Always ensure following internal controls – similar to a
writing a check
 Stock Gifts
 We use a broker who
receives all stock
 We sell all securities
upon receipt
Cash Flow Management
Since cash flow describes how and when
money comes into the church and is spent,
cash-flow management involves projecting
income and expenses with the goal of paying
bills on time and creating a surplus for
growth.
Cash Flow Management
 Project revenue each June for following fiscal year
 Use historical data to project future giving
Cash Flow Management
 Project expenses each July for following fiscal year
 Payroll should be 50% of general fund giving
 10% of general fund goes to external mission partners &
projects
 Operational budget is set using historical data (utilities,
interest, phone, internet, etc)
 Program budget set based on strategic objectives,
allowing us to move resources based on what we are
focusing on
Cash Reserves / Surpluses
Liquidity simply means available funds. The goal of liquidity
management is to have enough funds available for current
expenses and new ministry opportunities. Managing
liquidity is tougher than it seems because income doesn’t
always come in when expenses need to be paid. And we
always have unexpected expenses.
Cash Flow Fluctuation + Unplanned Events +
Potential Opportunities =
Operating Liquidity Balance Target
Cash Reserves / Surpluses
 How much cash do you have in reserve? Is it enough?
 60 to 90 days of expenses is ‘average’
 Does your senior pastor know?
 Does your council know?
 Do you have/need a sweep account?
 How much interest is your reserve earning?
 What interest rate are you paying on loan(s)?
 Work with experts in your area you trust
 Work with ECCU (link on xpastor.org)
 Excellent white papers on many subjects we covered today
Send Questions via Chat to Tami
From Chapter 1: “The New Testament Greek word
for steward is oikonomos … “manager.” Read the
passages that deal with this word (page 23)
From Chapter 2: Where does your church teach
about money? Sermons, adult classes, small
groups, fund-raising drives? Some or all of these?
(page 31)
Malphurs, Aubrey & Steve Stroope. Money Matters in
Church: A Practical Guide for Leaders. Grand Rapids:
Baker Books, 2007. Read Chapters 1 & 2: “Developing
and Communicating Your Theology of Financial
Stewardship” & “Developing Donors.”