Gilgal Christian Community is announcing some policy clarification with respect to the very important issue of “Misdirected Funds”
During the last year our office has had to deal with a number of cases where funds have been misdirected. We define misdirected funds as any funds from charitable organizations (church accounts) which have been
Reason for this Policy going forward: As we find more and more misdirected funds we need to make sure that we do not jeopardize our CRA number. If that happens everybody loses. We need to have a uniform and correct way of dealing with this.
Policy going forward: We will now be keeping track of all misdirected funds and showing them on your Monthly Financial Report. In the end each pastor, who is over a church account, is ultimately responsible for that accounting. When we show this on the Monthly Financial Report it will be listed as a “Loan to the Pastor.”
For instance (in the case of a), if there is no receipt, there is no payment. If a pastor pays out without a receipt we will be listing this as a loan to the pastor and it will remain on every Monthly Financial Report until such time as either 1) a receipt is produced, or 2) The pastor returns the money for the withdrawal.
In the case of b) If you raise money for Missions (for example), those funds must go to missions. If the funds are for a special offering, they must go to the payment for that item. They may not be spent as a part of a church’s general expenses. If the funds are not used for the intended purpose then they can not be marked as special offerings.
In the case of c) where the pastor has signed a check for payment for something that is not eligible, those funds must be returned to the church and the amount will be shown as a loan to the pastor until the funds are returned.
This Policy Clarification applies to very few pastors but it is important that we deal with this with this policy so that we have a proper procedure in place in the event of an audit.
PLEASE MAKE NOTE! We have already had a few issues where misdirecting funds have led us to centralize the church’s bank account. What does this mean? Basically, where there are misdirected funds which have to be resolved and which are not being dealt with, we freeze the church account at the bank and ask the church for their checkbook. From that point we control the payouts until the situation is rectified. It is not an onerous or punitive measure. It is meant to serve as a temporary means whereby we can work with the church to rectify the situation. The church continues to do the deposits and the office pays out for bills. We will devise a system for repayment and work with the pastor to make sure we can get the books straight again.
If you have any questions please speak to us at your next Coaching Meeting.
During the last year our office has had to deal with a number of cases where funds have been misdirected. We define misdirected funds as any funds from charitable organizations (church accounts) which have been
- Un-receipted payouts (You may have lost receipts)
- Funds which have not been paid to their designated purpose. (Missions, special offerings)
- Funds which have been paid for things which are not eligible to be paid by the church. Personal items)
Reason for this Policy going forward: As we find more and more misdirected funds we need to make sure that we do not jeopardize our CRA number. If that happens everybody loses. We need to have a uniform and correct way of dealing with this.
Policy going forward: We will now be keeping track of all misdirected funds and showing them on your Monthly Financial Report. In the end each pastor, who is over a church account, is ultimately responsible for that accounting. When we show this on the Monthly Financial Report it will be listed as a “Loan to the Pastor.”
For instance (in the case of a), if there is no receipt, there is no payment. If a pastor pays out without a receipt we will be listing this as a loan to the pastor and it will remain on every Monthly Financial Report until such time as either 1) a receipt is produced, or 2) The pastor returns the money for the withdrawal.
In the case of b) If you raise money for Missions (for example), those funds must go to missions. If the funds are for a special offering, they must go to the payment for that item. They may not be spent as a part of a church’s general expenses. If the funds are not used for the intended purpose then they can not be marked as special offerings.
In the case of c) where the pastor has signed a check for payment for something that is not eligible, those funds must be returned to the church and the amount will be shown as a loan to the pastor until the funds are returned.
This Policy Clarification applies to very few pastors but it is important that we deal with this with this policy so that we have a proper procedure in place in the event of an audit.
PLEASE MAKE NOTE! We have already had a few issues where misdirecting funds have led us to centralize the church’s bank account. What does this mean? Basically, where there are misdirected funds which have to be resolved and which are not being dealt with, we freeze the church account at the bank and ask the church for their checkbook. From that point we control the payouts until the situation is rectified. It is not an onerous or punitive measure. It is meant to serve as a temporary means whereby we can work with the church to rectify the situation. The church continues to do the deposits and the office pays out for bills. We will devise a system for repayment and work with the pastor to make sure we can get the books straight again.
If you have any questions please speak to us at your next Coaching Meeting.