FINANCIAL POLICIES and PROCEDURES MANUAL

FINANCIAL POLICIES and

PROCEDURES MANUAL

Adopted by the Budget, Finance and Stewardship Committee ? November 20, 2002 Updated ? September 15, 2004 Reviewed ? January 2006

FIRST BAPTIST CHURCH, MURRAY, KENTUCKY FINANCIAL POLICIES

I. BACKGROUND

The Purpose of these policies is to allow First Baptist Church of Murray, Kentucky to accomplish its goals and objectives through good financial management. Let it be understood that these policies are not an end unto themselves. God allows a church to have a certain amount of resources in terms of people, time, and money. Just as He expects this church to use its people resources wisely, He also expects that good financial management be done as efficiently and effectively as possible. To this end, these policies have been adopted to assure good financial management, as well as to help this church accomplish its purpose of "leading people to a life-changing and growing relationship with Jesus Christ."

II. GENERAL POLICIES

1. For business and financial purposes the church year will begin on January 1 and conclude on December 31 each year.

2. The church will adopt a Regular Budget to fund the ministries of the church.

3. Several special offerings are taken each year to fund a variety of mission causes. These may include but are not limited to the Annie Armstrong Easter Offering for North American Missions, the Kentucky Baptist Homes for Children Offering, a World Hunger Offering, State Missions Offering and the Lottie Moon Christmas Offering for International Missions.

4. The Budget, Finance and Stewardship Committee will plan and administer the financial affairs of the church, including the planning of an annual budget for the church's approval, choosing banks to do business, and the regular oversight of all financial affairs. (See Appendix I for the responsibilities of the Budget, Finance and Stewardship Committee)

5. The Treasurer is elected by the church membership and is responsible for the financial integrity of the accounting system and the accuracy of the financial reports. (See Appendix I for the responsibilities of the Treasurer)

6. The Budget, Finance and Stewardship Committee will be provided a monthly review of the financial condition of the church which consists of, but not be limited to:

a. Review of the variance of actual receipts and expenditures to budget for the various ministries and programs. The amount of detail reviewed will depend on the amount of overall spending and budgeted funding.

b. Review of the church cash position, and future planned expenditures.

c. Review of collection levels in comparison to the budgeted requirements.

d. Review the balance sheet and detailed analysis of revenue and expenses for all church funds.

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e. Review planned projects and evaluate funding needed for them.

7. A monthly Income/Expense budget report will be provided and presented by the Treasurer to church members at the regular monthly business meeting of the church.

III. CHARITABLE GIFTS AND CONTRIBUTIONS

The church will receipt in writing any individual cash (or property) contribution greater than $250.00. The receipt will be in compliance with the current IRS contribution tax laws. Church envelopes will be provided to those who request them.

1. Timing Only contributions actually received in the church office between January 1 and December 31 will be recorded in a given calendar year contribution record. The only exception is contributions mailed to the church. If the postmark reflects a December 31 or prior date, the contribution will be recorded in the prior year, even though it may be delivered to the church after January 1.

2. Non-cash Donations All non-cash donations will be acknowledged by a letter stating only the receipt of the property as of a specific date and giving a brief description of the property donated. Non-cash contributions are not included on the member's contribution record, since to do so would require the church to make an appraisal of the property. In the event of a stock donation, a receipt will be given to the contributor and also noted on the contribution statement as a non-cash donation.

3. Designated Contributions to Individuals If a donor stipulates that a contribution be spent on a designated individual, no deduction ordinarily is allowed unless the church exercises full administrative control over the donated funds to insure that they are being spent in furtherance of the church's exempt purposes.

4. Service Contributions The value of time or services contributed by an individual to the church will not be valued by the church or posted to the record of contribution.

5. Non-designated "Memorial" or "In Honor" Non-designated "memorial" or "in honor" gifts shall be deposited in an account for building fund purposes.

6. Planned or Deferred Gifts (See Appendix II for Planned Giving at First Baptist Church)

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IV. RECEIVING CHURCH MONIES

The following guidelines and procedures are to be followed and enforced by the Treasurer for the protection of the Lord's money and the protection of the people handling that money.

1. Offerings should be handled in the presence of two (2) or more persons. Below is the procedure for taking up the Sunday morning offerings:

Sunday morning live. Deacon of the week's responsibilities: a. Arrive early. b. Find four to five people to help him take up offering. c. After offering, take plates to front pew. d. After service, take offering to Sunday School office where it will be locked up until the

Treasurer or Assistant Treasurer picks it up.

Second Service Deacon of the week's responsibilities: a. Arrive early. b. Make sure helpers have shown up, if not find people to help. c. Get choir offering. d. After taking offering, take trays and money to conference room (AE 214). e. Help count money (during the second service). f. Sign Summary Deposit Recap Report verifying offering for the day. (See Appendix III for

Summary Deposit Recap Report)

After the deposit is verified, the Treasurer or Assistant Treasurer will take the bank bags to the night depository for deposit. The Financial Secretary will pick up the bank bags the following week.

2. The Summary Deposit Recap Report and envelopes are given to the Financial Secretary, who posts all gifts to the individual giving records.

3. Any offering monies that come in during the week will be placed in the bank bags to be counted on Sunday morning. Money received during the week for other purposes will be deposited each Friday. A Summary Deposit Recap Report will be filled out to go with the deposit receipt.

4. All collected or received monies related to the church from trips, activities, programs or any source must be provided to the Financial Secretary on a timely basis for deposit and proper accounting. A Receipt Form should be filled out along with the monies when given to the Financial Secretary. (See Appendix III for Receipt Form)

V. DESIGNATED FUNDS

It shall be the policy of the Budget, Finance and Stewardship Committee to encourage members of First Baptist Church to give monies to a unified church regular budget. However, at times certain causes will be funded by a donor that will require a designated fund to be established. The following is the process in which a fund could be established:

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1. The Budget, Finance and Stewardship Committee will review all funds or properties contributed to the church specifically designated by donors. Such contributions are reviewed as to desirability and/or feasibility especially as to utilization and restrictions. The committee will determine how the donor might wish such contributions be used. Where the gift is desirable for the church and has no unusual features as described below, the gift will be accepted for its designated purpose and administered through the Designated Account Fund in the church records. In appropriate cases the Budget, Finance and Stewardship Committee will identify the persons, group or function that will administer the designated gift.

2. The church reserves the right to dispose of a designated gift in a manner so desired if and wherein in the opinion of the Budget, Finance and Stewardship Committee the gift no longer serves its purpose and is no longer desired by the church. The Budget, Finance and Stewardship Committee will review all designated funds on an annual basis for continued desirability and purpose.

VI. PURCHASING AND DISBURSEMENTS

1. Staff Ministers, Organizations, Ministries and Committees have approval to spend up to the amount of the designated funds or budgeted amounts in their ministry area according to budget category line items as requested based on available cash funds and the following procedures. Requests for purchases or payments that are not in a budgeted category line item must be presented to the Financial Secretary, and forwarded to the Budget, Finance and Stewardship Committee for approval prior to the purchase or payment. If any expenditure will exceed $500.00, it must be presented to the Financial Secretary before the purchase to ensure that funds are available and timing for payment is appropriate. The Budget, Finance and Stewardship Committee will establish procedures to ensure a timely response to the request.

2. All expenditures made in a designated fund or budgeted ministry area must be pre-approved by the respective staff minister or committee chair.

3. No payments will be made without receipts or invoices from a vendor.

4. As a general rule a Purchase Order/Check Request Voucher should be used for all disbursements. There are some exceptions such as salaries, utilities, notes payable to banks, etc. (See Appendix III for Purchase Order/Check Request Voucher)

5. The Purchase Order/Check Request Voucher with invoice attached will be given to the Financial Secretary for prompt payment. Invoices should be entered into the computer system at least twice a week.

6. The Purchase Order/Check Request Voucher is used for check requests by staff and members when reimbursement of funds is necessary. Persons requesting funds will complete this form.

7. Where cash or check is required before an invoice is received for deposits or prepayments, a Purchase Order/Check Request Voucher must be submitted. These requests should be submitted as far in advance as possible with a minimum of a week being allowed to process these requests.

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