Financial Policies Of First Baptist Church

FINANCIAL POLICIES OF FIRST BAPTIST CHURCH Weslaco, Texas

These financial policies of First Baptist Church of Weslaco are established to interpret, implement or enlarge upon the previously established Constitution and Bylaws. They are also designed to provide checks and balances to encourage operating efficiency and adherence to the financial guidelines of the Constitution and Bylaws. Should there be any conflict between these policies and the Constitution and Bylaws, the Constitution and Bylaws shall govern.

I DEFINITIONS

SECTION 1. GENERAL MINISTRY FUNDS Monies or other gifts given to the General Offering for the purpose of expenditures outlined in the church's annual budget. SECTION 2. DESIGNATED FUNDS Monies or other gifts given for a special purpose determined prior or subsequent to the gift. All offerings not designated by the giver shall be classified as General Ministry Funds. A designated fund shall be further classified as: (1) Missions Offering Funds – Monies given for a mission activity which has been approved by the church and for which a church-wide fund raising campaign is conducted. Classifications are: (a) Annie Armstrong, (b) Lottie Moon, (c) State Missions, (d) World Hunger, etc. (2) Special Projects Funds – Funds created for a single special purpose established for a relatively short-term period. Classifications are: (a) Building furnishing, (b) Capital improvements, (c) Debt retirement, etc. (3) Memorial Funds – Monies given in memory of a deceased church member or friend. Memorial funds are established at the request of family members and/or friends of the deceased. The proceeds from all memorial funds shall be spent for the benefit of the church. Non-designated memorial funds will go to the general account. (4) Benevolence Funds – Monies provided for those in need on a short notice. Monies for benevolence are provided by special offerings, but may be funds provided by the church budget. (5) Special Offering Funds – Monies collected with the intent of being disbursed in a timely manner shortly after collection. Classifications are: (a) Love gifts, (b) Honorariums, etc.

II ESTABLISHMENT, FUNDS, ACCEPTANCE AND CONTRIBUTION CREDIT

SECTION 1. GENERAL MINISTRY FUNDS Permanent funds of the church. SECTION 2. DESIGNATED FUNDS The church may establish a time limit for any designated fund. All designated funds are to be used for a specified purpose. The church shall retain the right to determine what gifts are appropriate for it to receive and how they are received. SECTION 2. CONTRIBUTION CREDIT FOR CASH GIFTS Certain steps must be taken to assure that contribution credit is acceptable to the Internal Revenue Service. All members are instructed to use offering envelopes provided by the church to ensure that member accounts are credited for contributions given. All decisions regarding expenditures of these funds shall pass to the church.

2 SECTION 4. CONTRIBUTION CREDIT FOR NON-CASH GIFTS All gifts of stock, bonds, real estate, etc… will be sold as soon as possible unless the church can make better use of the gift retaining it for church use. Contribution credit shall only be given when the church receives the proceeds of the sale. The church may make exceptions for gifts of property where the church has previously expressed a need and the giver's property has been approved. The giver of non-cash property to the church, which is kept for use by the church, shall receive credit for its fair market value. The treasurer will furnish an acknowledgment letter to the giver for all non-cash gifts.

III INTERNAL CONTROL POLICIES

SECTION 1. RECEIPT AND COUNTING The following steps will be observed during the receipt and counting of church monies. (1) Receiving the Offering – Offering shall be received during Sunday School and the Sunday morning services or other designated times. The Tellers and/or ushers shall see that all offerings placed in the church safe. All offerings will at all times be handled by two people. (2) Counting the Offering – The offering collected for Sunday School and all services will be counted by the two Tellers and/or ushers. Two people are required to be present for the counting of monies. Procedures are as follows: Currency is counted, by denomination, and the totals entered on the Teller Sheet. Coins are counted and the total entered on the Teller Sheet. Envelopes are added by the amount on the outside of the envelope and the total entered on the Teller Sheet. All amounts added and the total entered on the line marked Grand Total. Both people present during the counting will sign their names on the Teller Sheet. (3) Recording of Funds – The total of all tithes and gifts deposited shall be recorded by the Office Manager or a church designee in the stewardship records each week. (4) Depositing Funds – All funds shall be deposited in the bank within three business days. (5) Access to Records - Access to records of contributions by church members is available only to the individual church member making the request and is limited to their own contributions. In addition, the church shall provide contribution reports to each individual church member on an annual basis and at other times upon written request. SECTION 2. ACCOUNTING (1) Custodian of Church Funds – The Office Manager, under the supervision of the treasurer, shall be the custodian of all church monies, insurance policies, securities, and all other valuable documents. The Office Manager shall be responsible for preparation of the monthly financial statements and shall meet monthly with the Budget and Finance Committee to answer questions regarding these statements. (2) Bank Statement Reconciliation – The Office Manager shall reconcile the bank statements, with the church's financial records, on a monthly basis. Bank reconciliations are to be reviewed and initialed monthly by a member of the Budget & Finance Committee. (3) The Budget and Finance Committee will be responsible for preparing the annual Budget for the Church, with the assistance of various Ministry Teams for their respective committees. The proposed budget for the upcoming year will be presented to the Church Body for approval in the December regular business meeting. The purpose of a budget is to be used as a guideline for expenditures, therefore, all budgeted line items will be expended within the guidelines set forth in the annual budget by the Budget and Finance Committee and approved by the church body.

3 SECTION 3. EXPENDITURES The following steps will be observed regarding the expenditure of church monies. (1) Spending Priorities - Spending priorities to be based as follows: a. General Ministry Funds i. Contract payments including utilities, etc. ii. Payroll iii. Mission Funds iv. Scheduled repayment on bank loans v. Purchase authorizations vi. Travel authorizations b. Designated Funds on scheduled due date (2) Non-Budgeted Items – All non-budgeted items must be approved by the church body in a regular or called business meeting. The Budget and Finance Committee may make recommendations to the church body regarding all non-budget items. (3) Authority for expenditure of funds - Authority for expenditures shall follow approved spending priorities and shall be distributed as follows: a. Mission offering funds – Funds will be transmitted by check and mailed to the receiving authority on a monthly basis. b. Special Project Funds – Expended by the authority of those committees involved with the respective activities. This authority will be designated at the time the fund is established. c. Memorial funds – Non-designated memorial funds will go the general account. d. Benevolent funds – Expended by the authority of the Church Deacons or Church Ministerial Staff. e. Special offering funds – Expended by authority of the church at the time of approval. f. If an expense reflects a deviation from the intended budgeted purpose, approval of the Budget & Finance Committee is required. (4) Authority for deletion of designated funds – The Budget & Finance Committee, with concurrence of the spending authority for a designated fund, shall determine that a fund has achieved its purpose and may be deleted. Any balance remaining in a designated fund account to be deleted shall be transferred to the General Ministry Fund. (5) Integrity of designated funds – In order to further assure ability of the church to make proper and timely payment from any Designated Fund equal to or more than the requirements for all designated account balances, designated funds may only be used for the specified purpose for which they were given. This may require the church to occasionally obtain short-term loans to add to its operating fund accounts. There shall be no borrowing from the designated fund balances without the approval of the church body. (6) Church responsibility – The church shall only be responsible for authorized expenditures. Authorized expenditures are those authorized to spend budgeted line items and designated funds, or the church in regular business session. (7) Payment by check only – All payments shall be made by check with the signature of either the Treasurer or other authorized check signers. (8) Electronic Fund Transfers – Electronic Fund Transfers must be authorized by a designated check signer and the subsequent bank statement initialed by a member of the Budget & Finance Committee. (9) Authorization to Sign Checks - The following individuals will be authorized to sign checks on the Church's accounts with only one signature required: Church Treasurer Chairman of Deacons Chairman of the Budget and Finance Chairman of Trustees

4 (10) Reimbursements – Requests for reimbursement of expenses must be supported with the appropriate itemized invoice or receipt, and requested on a timely basis (within 30 days of expenditure).

5 (11) Short-term borrowing – There are times when the General Offering is more than adequate to pay the operating expenses of the church. However, there are times when it is difficult to make payments required to maintain the credit of the church. The Budget and Finance Committee, with the concurrence of the Trustees, is authorized, upon notification from the Treasurer that a shortfall exists, to secure a short-term bank loan or line of credit Short-term bank or line of credit loans shall be used only for the purpose of providing operating capital to pay current operating expenses. If required, the Trustees are authorized to offer church property as collateral. The total amount of any such loan or line of credit may not exceed $10,000, without additional authority from the Church body in regular or called business session. (12) Purchase Authorization Procedure – All purchases of supplies, equipment, services, and other capital expenditures shall be made only on the authority of a purchase authorization properly approved by the Office Manager. Payment of re-occurring monthly expenses (i.e. payroll, utilities, etc.) does not require a purchase order. The following procedures shall be adhered to with regard to purchase authorizations: a. Purchase authorization forms may be obtained from the church office. b. Purchase authorization forms are to be submitted by the person initiating the purchase. c. Anyone who has been denied a purchase requisition may appeal to the church at the next regularly scheduled business meeting.

BESS KNAPP DAYCARE CENTER

SECTION 1. INVOICING OF CLIENTS All clients of the Daycare Center are to be billed by invoice when their fees are due. The invoice will specify the name of the responsible parent, the name of the child, the amount of the fees due, and the date by which the fees are required to be paid. A record of all invoices issued will be maintained by the Daycare Director. This record will show to whom the invoice was issued, the date the invoice was issued, and the date it was paid. SECTION 2. COLLECTION AND DEPOSIT OF FUNDS A receipt will be issued by the Daycare Director (or their representative) for all funds received by the Daycare Center. The receipt will specify the name of the client amount received, the date received, the amount received, the related invoice, and whether the amount received is a full or partial payment of that invoice. A copy of the receipt will be kept by the Daycare Director. Funds collected will be deposited within three (3) business days. A record of the deposit will be given to the Office Manager. SECTION 3. PAST-DUE INVOICES The Daycare Director (or their representative) will provide, once a month, report to the Budget and Finance Committee the amount relating to all invoices that are more than thirty days past due. No daycare client who is thirty days (or more) past due will be permitted to continue in the Daycare Center without the permission of both the Budget and Finance Committee and the Pastor of the church. The Daycare Director will be responsible for making this request on behalf of the client and must present the client's plan for getting all bills current. The Daycare Director will also be responsible for collecting all unpaid past-due invoices. Un-collectable past-due notices may only be charged off with the permission of the church in a regular business meeting at the recommendation of the Budget & Finance Committee. SECTION 4. REVIEW OF DAY CARE RECORDS Once a month, the Office Manager and a member of the Budget and Finance Committee will review and verify the records of the Daycare Center. The Office Manager will be responsible for matching invoices against receipts, deposits, and outstanding receivables of the Daycare Center. They will also spot-check bank reconciliations and cancelled checks.

6 SECTION 5. BENEVOLENCE Bess Knapp Child Development and Child Care Center benevolence ministries will be handled on a case by case basis with a recommendation coming from the Daycare Director and approved by the pastor, Daycare Committee, and the Budget & Finance Committee.

7 SECTION 6. SURPLUS / SHORTFALL

The finances of the Daycare are to be overseen by the Budget & Finance Committee, with the decisions regarding surplus and shortfall funds to be made by the congregation with recommendations coming from the Budget & Finance Committee, in consultation with the Office Manager, Daycare Director, and Daycare Committee.

*Financial Policies Updated July 18, 2010