Redeemer Free Lutheran Church models the concept of tithe for its members by giving 10% of all unrestricted donations to the AFLC.

Redeemer Free Lutheran Church adopts this policy in order to comply with legal standards of charitable contributions. Some examples of legal compliance are.

     “The contribution is unconditional and without personal benefit to the donor.”

     “The contribution is made to or for the use of the church.”

     “The value of personal services is never deductible as a charitable gift.”

 “No deduction is allowed unless the church exercises full administrative control over the donated funds to ensure that they are being spent in furtherance of the church’s exempt purposes.”

Integrity and Confidentiality:

Redeemer Free Lutheran Church handles funds with a high standard of integrity and accountability. All donations are recorded in the church records, reported monthly to the church board, and audited annually. It is the intention of Redeemer Free Lutheran Church to maintain donor confidentiality unless permission is specifically granted by the donor.

Policy of the church:

1. Givers are strongly encouraged to support first and foremost the unified budget of the church with their regular tithes and other freewill offerings.
2. The Church reserves the right to refuse any donation for any reason. The church will receive designated giving only to areas which are church approved or are already part of the church approved budget. No designated gifts will be received until the church approves that fund.
3. All designated accounts will be under the control of the church council, to determine how the money is used, which will become part of the regular finance report to the church.
4. Each designated account must be general in nature(Mission trips, Missions offerings, Evangelism, Building Improvement, New Equipment, Benevolence, Ministry projects, etc.) and not specific in nature (a microphone fund, a rocking horse fund, a curtain fund, a sauna fund, etc.) Donations received designated to a specific individual will not be reflected on the donor’s record of giving.
5. Members’ suggestions for its use may be considered, but the decision must be based on best use in the context of the church’s ministries.
6. If a designated gift is received, that does not fit this policy, the check will be returned to the donor.
7. Non-cash gifts to the church will be acknowledged with a letter of appreciation that describes the donated property but does not indicate a value for the donated item. For larger non-cash gifts (over $5,000 in value) the church will comply with donor needs for appraisal and completion of Form 8382. Donors of vehicles will receive Form 1098-C within 30 days of the gift receipt as well as notification of any value received from disposal.
8. Any monies left over from a designated fund will go into the general fund.
9. All payments are subject to availability of funds.
10. See current list of Designated Fund accounts posted on bulletin.
11. See IRS publication 562 you cannot deduct “Contributions From Which You Benefit”.

Designated Fund accounts of Redeemer Free as of Jan 2013

:

Missions Fund

Other Organizations Fund

AFLBS Scholarship Fund

1^st Sunday of the Month Fund

Church Meals Fund

Youth Activities Fund

Bible Fund

Travel Fund

Benevolence Fund

***Every form that is used for input to QuickBooks will have a “Q” in upper right hand corner along with any needed notations to show items have been input***

WEEKLY:

• OFFERING:
  • Input contributions into QuickBooks using;
    • “Create Sales Receipts” function
  • • Using the Copy of the weekly offering form with the Master envelope list with names
  • • Enter information “Customer Job” –these are the donors-: pick name from list (start typing last name)Insure date is correct
  • • Type in check number or cash in boxIn “Item” box pick correct item (unrestricted, 1^st Sunday of Month, AFLC Special, etc.)In “Fund” box pick correct fund (Admin, Designated, or General)
    • In “Amount” box type in amount

**If donation is for more than one “item” ensure each is recorded**

• Upon receipt from the Treasure of any corrections to the original weekly offering form;
  • Make any/all corrections to the sales receipts stating why change was made in memo.
  • Verify deposit date using online banking, date of deposit written on original offering form or deposit book from treasurer.
  • Click on Record Deposits; ensure “Deposit to” account, “Date”, and “deposit Subtotal” boxes are correct.

• Back up QUICKBOOKS

• FILE:
  • By Month then subfolder
    • Currently subfolders are;
      • offering by week
      • checks numerically
      • reports/statements by date
        

MONTHLY:

• TRANSFER FUNDS FROM CHECKING TO SAVINGS:
  • Using transfer slip from treasurer or online confirmation:
    • transfer funds in from Bus Now to Green Checking
      • Use Banking tab:
      • Transfer funds
      • From account-BUS NOW
      • To account: GREEN CK
      • Keep transfer slip/conformation in checks folder

• Disbursement forms:
  • Completed forms are received from the treasurer
    • Input data using the “Write Checks” function.

**Exception: All payments (including reimbursements) to employee’s (Pastor) must be written from Employee tab/ Pay Employees**

• Ensure:
  • Checks are written out of the Bank Account assigned (Bus. Now, Kitchen, Annual Pastor Conference, etc.),
  • Check number is correct
  • Date check written is correct (Not date entered in QB’s)
  • Pay to the Order of is correct -donations given are to “other” not “vendor or customer”
  • Amount is correct
  • If needed ensure the “split” is correct
  • Expense account matches (Bulletins, AFLC tithe, etc.)
  • Correct Class is assigned (general, admin, or designated)

• bank statements: (currently one is mid-month and one end of month)
  • Using the current statements, online print out is acceptable.
  • Reconcile QuickBooks
  • Print both the summary and detail reports
  • Run the Balance Sheet (Dates tab-Custom-use date of statement)
    • Optional-Highlight report for council:
      • Bank Statements: dates, previous & ending balances
      • Reconciliation Detail/Summary Report: Beginning Balance & Cleared Balance
      • Balance Sheet: Total in account (BUSINESS NOW CHECKING AKA CHECKING or GREEN BUSINESS Checking  AKA SAVINGS)
  • Attach reports to statements for Treasurer and Finance Committee review

• INTERNAL TRANSFERS:
  • BANK SUB ACCOUNTS (kitchen, pastor conference, furnace, etc.)

**Total Fund amount and how they are to be used is provided by Council**

• When funds are depleted, and you need to add:Use Banking tab:Transfer fundsFrom account-BUS NOWTo account: appropriate sub account
  • Date should be 1^st of month
  • Reconcile books
  • Ending balance same as beginning balance
  • Print report for treasurer and finance committee

• Reports:
  • Using the Reports tab/Memorized Reports
    • Informational report for bookkeeper:
      • Unrestricted Income & Expense by Class (Dates tab: last month)
      • Verify items are categorized correctly, if designated shows up on this report edit as needed
      • Print for council.
  • Run and Print the following reports for council (email reports to members who have email)
    • Balance Sheet (Dates tab: last month)
    • Contributions (Dates tab: last month) this report is also used to figure AFLC 10% tithe of general donations.
      • Optional: write AFLC 10% and $ amount on report
    • Transaction Detail by Account (Dates tab: last month)-for comparison to the treasurer checkbook
    • Temporary Restricted-Designated by Class (Dates tab-Custom-use dates: 1/1/2012 through end of last month) this report shows funds still in accounts and is used for council tracking and approval prior to treasurer writing checks.
      • If unclear where funds go-use report to get specific information and write it on report.
    • Unrestricted Funds & Expense-Prev Year Comparison (Dates tab-Custom-use dates: beginning of current year through end of last month, such as 1/1/13 through 3/31/13)
    • Budget vs. Actual (Dates tab- This Fiscal Year: MAKE SURE YOU RUN THIS ON THE LAST DAY OF THE MONTH or before any new transactions are done)

• REVIEW:
  • No later than the Sunday prior to Council meeting all files will be placed in the church inbox (or emailed), for the finance committee to review.

• Back up QUICKBOOKS
  • Keep back-up from prior month in church file drawer.

QUARTERLY:

• Print quarterly report for all employees, email, hand deliver or mail every quarter.
• If requested print copy for treasurer and/or finance committee

END OF YEAR:

• Donor statement:
  • End of year donor statements completed by bookkeeper and reviewed by treasurer and finance committee. If no issues they are mailed, emailed, or hand delivered no later than January 31st.
    • If loose offering of any donated check is for $250 or more treasurer will give bookkeeper information for issue of receipt to donor
    • Report/Memorized Reports/Customers/Year-Unrestricted-Contributions by Customer Detail
      • Dates: Last Fiscal Year
      • Check to make sure all names and all deductible items are included, edit as needed
      • Print settings-Page Breaks-check both smart and after each major grouping

• REPORTS:
  • Run and Print the following reports for council (email reports to members who have email)
    • Balance Sheet (Dates tab: Last Fiscal Year)
    • EOY-Summary-council-Contributions (Dates tab: Last Fiscal Year)
    • EOY-Designated Funds (Restricted)-Expense detail (Dates tab: Last Fiscal Year)
    • EOY-NON Designated Funds-Transaction Detail By Account (Dates tab: Last Fiscal Year)
    • EOY-Statement of Income & Expense (Dates tab: Last Fiscal Year)
    • Pastor Transaction Detail by Account (this is easier to read if you make a spreadsheet)
    • EOY-1099’s may be needed
      • Verify all people performing services (Guest speaker, Janitor, etc.)
    • modify report/filter tab/ name/ multiple names
    • Print

TAX FORMS

Draft by Bookkeeper, reviewed by Treasurer and Finance Committee, approved by Council, submitted by bookkeeper and filed.

I 9’s for all employees (one time if US citizen)

W-9’s for anyone receiving income (one time for each individual)

1099-misc. for those needed according to current IRS regulations (yearly)

Michigan Department of Treasury Form 165 (yearly)

W-2 & W-3 (yearly)

FINANCIAL REPORTS                                                                                                                                                                              DATE:                                                                                                                       

Review:

Balance Sheet

• Date: last month

Spending vs. donations is in proportion to each other (if net income is a negative number spending is higher than donations)

Monthly Contributions (columns by week)

• Date: last month

AFLC 10% (tithe) Charitable Contribution- taken from the General Unrestricted total. (written on disbursement form & AFLC transmittal form)

Temporary Restricted-Designated by Class Shows funds still in designated accounts (this money is from individuals to specific area/people and must be used towards-not over- amount church gives)

• Date-Custom: 1/1/2012 through end of last month

Disbursement forms for allocated funds verified (some of these will be written on AFLC transmittal form as well)

Unrestricted Income & Expense by Class (General/Admin)

• Date: last month

Income/Expenses categorized correctly

Unrestricted Funds & Expense-Prev Year Comparison

• Unexplained variations brought to council’s attention

Budget vs. Actual

• Date- This Fiscal Year

Unexplained variations brought to council’s attention

Transaction Detail by Account

• Date: last month
• Compare with bank statements
• Verify all transfers (Internal and bank to bank)

•  

ALL DISBURSEMENT FORMS

**Give special attention to requests from treasurer and other officers**

***No checks will be written without a complete, and approved by council, disbursement form***

• All areas filled in
• Supporting IRS approved documents attached
• reimbursements include original invoice/receipt(s)
• donations to organizations include letter requesting assistance
• bills include invoice
• Taxes not paid and/or are not reimbursed
• Approved by council signed forms with invoices/receipts given to Treasurer to write check.

(Blue) NON-BUDGETED EXPENSES: (above “ALL Disbursement” and also the following)

• If check has been written prior to council approval notify council
• Payment request contains information to provide an explanation of the expense
• Request containing insufficient information, or missing information or signatures returned to the requestor for completion.

The Council will vote on request

• If approved: signed form and receipts are given to Treasurer to write check.
• Disallowed forms returned to requestor, stating council reason.

(Not blue) BUDGETED (Pre-Approved): (above “ALL Disbursement” and also the following)

Recurring Administrative Invoices (Pink forms-Utilities & White form-Josiah Venture):

If amount is questionable: Ensure Council is aware of the issue.-Council will decide on action to take

Kitchen reimbursements (used for individuals only):

*The Treasurer may write out checks up to $25.00 a month for authorized persons purchasing kitchen items (disbursement forms and supporting documents are still required).*

• Verify disbursement form to ensure taxes are not reimbursed to individuals.

If monthly total is over $25.00

• Ensure council is aware. Council will vote on action to take

Travel:

• Complete worksheet attached to disbursement form with receipts.
• Ensure taxes are not reimbursed.

See Travel policy for additional information.

• Benevolence: See Benevolence policy (3 page document)

BANK STATEMENTS:

• Beginning, Ending balances & Dates match QB reports
• Review against Reconcile Report and/or Transaction Detail Report.

Checking: Mid-month

checks.

deposits

transfers

Electronic Fund Transfers (EFT)

interest

Unexplained transactions addressed by council

• If all items match: Write “OK” sign and date statement

Savings: End of Month

deposits

transfers

Electronic Fund Transfers (EFT).

interest

Unexplained transactions addressed by council

• If all items match: Write “OK” sign and date statement                                                   

OFFERINGS:

• Offering forms signed by 2 (two) persons, not the same 2 people every Sunday.

DEPOSITS:

• Totals on Weekly Offering forms match deposited amounts on Monthly Contribution Report
• Discrepancies on offering forms are brought to Councils attention

•  

END OF YEAR Review:

REPORTS:

• Balance Sheet
• Date: Last Fiscal Year
• EOY-Summary-council-Contributions
• Date: Last Fiscal Year
• EOY-Designated Funds (Restricted)-Expense detail
• Date: Last Fiscal Year
• EOY-Statement of Income & Expense
• Date: Last Fiscal Year
• EOY-NON Designated Funds-Transaction Detail By Account
• Date: Last Fiscal Year
• Pastor Transaction Detail by Account (book keeper may give spreadsheet for easier review)

DONATION STATEMENTS

• End of year donor statements given no later than Jan 31^st

W-9’s

• Given and filed for all payments concerning income (Janitor, Guest Speakers, etc.) and are kept in file.

W-2 & W-3

• Dollar amounts match QuickBooks reports.

1099-misc.

• All independent contractors are tracked (W-9 in file)
• Dollar amounts match QuickBooks reports.

MI Form 165

• Michigan Department of Treasury filled out correctly

Internal audit:

• Schedule internal audit,

• Audit committee
• Treasurer
• Bookkeeper.

• If any issues, try to resolve them, if unable to resolve; bring items to council’s attention.
• Audit final results to committee.

DISBURSEMENT FORMS

**Give special attention to requests from treasurer and other officers**

***No checks will be written without a complete, and approved by council, disbursement form***

• All areas must be filled in
  • Supporting IRS approved documents must be attached
    • reimbursements must include original invoice/receipt(s)
    • donations to organizations must include letter requesting assistance
    • bills must include invoice
    • Review receipts to ensure taxes are not paid and/or are not reimbursed/paid by church
  • Reviewed by finance committee and approved by council.
  • If approved: signed forms with invoices/receipts are given to Treasurer and the check is written.
• NON-BUDGETED EXPENSES:
  • If it is not a budgeted item and/or has not been preapproved by council:
    • Payment requests should contain as much information as possible in order to provide an explanation of the expense and a reason that the expense was incurred. 
    • Request containing insufficient information, or missing information or signatures will be returned to the requestor for completion.
    • If all information is provided-Ensure Council is aware of the request
    • The Council will vote on request
    • If approved: signed form and receipts are given to Treasurer and the check is written.
• BUDGETED:
  • Recurring Administrative Invoices:
    • Normal invoices are paid upon receipt by Treasurer
    • If amount is questionable:
      • Ensure Council is aware of the issue.
      • Council will decide on action to take
  • Kitchen reimbursements(used for individuals only):
    • The Treasurer may write out checks up to $25.00 a month for authorized persons purchasing kitchen items (disbursement forms and supporting documents are still required).
      • Verify receipts to ensure taxes are not paid and/or are not reimbursed to individuals.
      • Review and approve if no discrepancies.
    • If monthly amount is over $25.00
      • Ensure council is aware of the request.
      • The Council will vote on request
      • If approved: give completed form and receipts to Treasurer for payment.
  • Travel:
    • Ensure the worksheet is attached to disbursement form and any receipts.
    • Check receipts to ensure taxes are not reimbursed.
    • See Travel policy.
  • Benevolence: See Benevolence policy (3 page document)

BANK STATEMENTS:

• Beginning, Ending balances and Dates match QB reports
• Review against Reconcile Report and/or Transaction Detail Report.
  • Mid-month (checking):
    • Verify all checks written are documented in QB.
    • Verify all deposits are documented in QB
    • Verify all transfers are documented in QB
    • Verify any interest paid is documented in QB
    • Any unexplained transactions need to be addressed by council
    • If all items match: Write “OK” sign and date statement
  • End of Month (savings):
    • Verify all Electronic Fund Transfers (EFT) are documented in QB.
      • These are usually payroll payments and AFLC admin fees.
    • Verify deposits are documented in QB
    • Verify any interest paid is documented in QB
    • Any unexplained transactions need to be addressed by council
    • If all items match: Write “OK” sign and date statement                                                     

OFFERINGS:

• Verify offering forms are signed by 2 (two) persons, not the same 2 people every Sunday.

DEPOSIT BOOKS:

• Verify totals on offering forms match deposited amounts in bank book and QB report (see bank statements).

FINANCIAL REPORTS

• Balance Sheet
  • Date: last month
  • Quick view of where the money is and the net income
  • Used to see if spending vs. donations is in proportion to each other (if net income is a negative number spending is higher than donations)
• Monthly Contributions (columns by week)
  • Date: last month
  • Used to verify (tithe) AFLC 10% Charitable Contribution
  • Amount of contribution taken from the General Unrestricted total.
• Transaction Detail by Account
  • Date: last month
  • Compare with checkbook (see bank statements)
  • Verify internal transfers (General to Kitchen if used)
  • If check has been written and is not in QB let the bookkeeper know and have reports rerun prior to council meeting
• Unrestricted Income & Expense by Class
  • Date: last month
  • Shows interest and donation total
  • Used for tracking where the money is by account and class
• Temporary Restricted-Designated by Class
  • Date-Custom: 1/1/2012 through end of last month
  • Shows funds still in designated accounts
  • Used for tracking and approval prior to treasurer writing checks.
• Unrestricted Funds & Expense-Prev Year Comparison
  • Date-Custom: beginning of current year through end of last month, (example: 1/1/13 through 3/31/13)
  • Shows last year compared to this year by account
  • Used to view any changes and bring concerns to council’s attention
• Budget vs. Actual
  • Date- This Fiscal Year
  • Shows estimates for year and how the church is spending

END OF YEAR

REPORTS:

• Balance Sheet
  • Date: Last Fiscal Year
• EOY-Summary-council-Contributions
  • Date: Last Fiscal Year
• EOY-Designated Funds (Restricted)-Expense detail
  • Date: Last Fiscal Year
• EOY-Statement of Income & Expense
  • Date: Last Fiscal Year
• EOY-NON Designated Funds-Transaction Detail By Account
  • Date: Last Fiscal Year
• Pastor Transaction Detail by Account (book keeper may give spreadsheet for easier review)

DONATION STATEMENTS

• End of year donor statements completed by bookkeeper and reviewed by finance committee. If no issues they are mailed, emailed, or hand delivered no later than January 31^st.

W-9’s

• Ensure a W-9 is given and returned for all payments concerning income (Janitor, Guest Speakers, etc.) and are kept in file.

W-2 & W-3

• Ensure all dollar amounts match QuickBooks reports.
• Upon approval bookkeeper will:
  • Fill out forms online and mail, email or hand deliver to employee by  January 31^st
  • And the Social Security Administration no later than February 28^th.

1099-misc.

• Ensure all independent contractors are tracked (W-9 in file)
• Ensure dollar amounts match QuickBooks reports.
• Upon approval bookkeeper will:
  • Fill out forms online and mail, email or hand deliver to employee by January 31^st.

MI Form 165

• Michigan Department of Treasury filled out correctly

?? (Not sure who is responsible for audit)

internal audit:

• Schedule internal audit, contacting audit committee, Treasurer, and bookkeeper to set date.
• If any issues, try to resolve them, if unable to resolve; bring items to council’s attention.
• Give audit final results to committee.