Transcript The Parish of Baglan - Amazon Web Services

Streetwise & Savvy – Part One
 Financial management & governance
 Background
 Governance
 The role of the PCC
 The role of a church treasurer
 Matters arising
 Solutions
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Newly elected & appointed church officers, including
church treasurers
A desire to ‘do it right’, ‘by the book’ or ‘put our
house in order’.
Perhaps you’ve taken on the role of treasurer in
place of someone else who carried out the role
faithfully, but perhaps not how you would do it!
Perhaps you’ve got a new incumbent who is asking
questions, changing things and keeping you all on
your toes!
Perhaps, you are sensible enough to know that the
rules are always changing...we all need to keep up
to date.
Perhaps you’re already doing all these things and
doing them well...but you’ve just come along to
check that’s the case!
To make life easier for everyone!
To get a full picture of the resources of the
parish in order that we can better plan for
mission and growth
 To ensure that the PCC is in full possession of
all financial information and can make
decisions on an informed basis so that it
can meet all its responsibilities and
discharge all its liabilities.
 To ensure minimum exposure to fraud and
to meet the requirement to evidence
robust procedures, policy and practice in
the event of a fraudulent incident.
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Two sets of annual returns are made each
year; Archdeacons returns (to the diocese)
and a membership and finance return to
the Representative Body of The Church in
Wales. Financial data is analysed for the
purposes of planning future mission and
ministry needs and opportunities and to
periodically review all aspects of parish life
and to offer additional support and advice
as appropriate.
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The Diocese of Llandaff also offers
extensive support and advice to parish
officers in all aspects of parish
management (including financial
management), promotes best practice
in these areas and offers regular training
to officers based on the needs it
identifies.
In some parishes it has become apparent
that the financial structures and
organisation within them, require alteration
in order for the parish to comply with the
very minimum of charity law, as set down
by the Charity Commission.
 The Diocesan Accountant & Parish
Resources Adviser work with clergy, officers
and PCC’s to ensure that changes are
made and that these requirements are
met.
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Parishes are part of the Diocese of Llandaff
and The Church in Wales.
 From these bodies various models of parish
management are either prescribed,
recommended or advised.
 Most parishes (at the current time) are an
excepted charity as part of the Diocese of
Llandaff charitable status and therefore
enjoy the full benefits of charitable
status...but they also have the responsibility
too.
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Most parishes are not (at this time)
registered as a charity (with the Charity
Commission) in their right. However, this
does not alter the responsibilities, liabilities
and requirements made of a PCC.
 Legislation laid down in law and enforced
by the Charity Commission must be
complied with by all charitable groups of
any size and type including all PCC’s. This is
not optional!
 Parishes are also subject to the rules and
regulations of HMRC.
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All PCC members are charity trustees; a
steward of the church’s money and
resources.
 You must together ensure compliance
with charity law and regulation and
implementation of best practices
whenever and wherever possible. It is a
shared responsibility.
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Trustees must:
 ensure that the PCC is able to meet all its
financial responsibilities, and that PCC
funds and assets are used appropriately.
 report on what the PCC has achieved,
and how it has used its money and
resources.
 manage the PCC’s money, and
balance risk and reserves.
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The responsibility for looking after the
Church’s money is shared between the
whole of the PCC. Making use of
particular skills that you have on the PCC
is good practice, and some ‘day to day’
tasks will be delegated to the treasurer
or to a finance sub-committee, but the
responsibility remains with the whole
PCC.
Just like managing your own money you
need to know:
 ‘How much money is coming in?’
 ‘How much money you will give, spend
or save?’
 ‘How much money is left over, and what
you will do with it?’
 ‘Is the money being spent on the things
people gave it for?’
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Just as you keep a regular check on your
own money, at each PCC meeting you
should do the same with the church's
money.
 The treasurer should give a brief report
on:
 All money coming in – called Receipts or
Income
 All money being spent – called
Payments or Expenditure
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How much money you have e.g. in the bank - sometimes
 called Current Assets.
 How much money is owed - sometimes called Liabilities
 Just as at home, the PCC should prepare a budget to
help you manage money as you go through the year.
 At the end of the year any money ‘left over’ forms your
reserves. Whether you are blessed with significant
reserves, or just scraping by, each PCC should develop a
policy on the amount of reserves it feels it needs, and
why they are needed. It should also say what you will do
to reach that amount and what you will do with any
extra money. You will also need to decide where to keep
or invest your reserves.
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Financial structures...
Churches with many & various bank & building
society accounts, not recorded or declared to the
PCC, and not correctly managed nor accounted for
to the PCC on a regular basis, and no accounts
presented to the annual church meeting. There
might be numerous accounts (perhaps for small
groups, perhaps a ‘historic’ or even ‘obsolete’ fund,
or from an abortive project), which are holding
balances of funds way beyond the requirements of
their purpose and are in breech of charity law
These accounts are sometimes operated for groups
within the ‘umbrella’ of the ‘church’, but are not
operating fully or correctly within it.
PCC members have direct liability for all such
accounts, but have little or no control.
Communication & reporting...
 Often a PCC does not have a full and
proper picture of all its assets.
 It cannot make fully informed decisions
about the resourcing of mission and
ministry and planning for the future until it
has a complete picture of its finances.
 It cannot currently operate in
compliance with basic accounting
requirements of charitable law.
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Proper financial management is
sometimes exceptionally difficult (if not
impossible!) in a parish where the correct
policies, practices, communication and
structures are not in place to link finance
to the mission of the church.
 The treasurers task is made exceptionally
and unnecessarily complicated.
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Some parishes are almost certainly not
operating to maximum financial
efficiency, meaning potential income
sources are being neglected. i.e. Gift
Aid, investment income, etc. and real
savings could be made on actual
expenditure in some areas.
Keep it simple!
Only two bank accounts are legally
required – Church & Churchyard.
 Any other ‘funds’ to be identified can be
held within one main church account and
can be identified or designated as required
and reports run on these fund areas as
needed.
 The PCC may choose to hold
‘savings/investment accounts if needed
and desirable – however have a written
purpose and a policy in place.
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All accounts are to be held by the PCC and
are to be subject to their full management and
control. (signatories, statements, spending and
saving decisions etc)
Where too many accounts are held the PCC
should begin a process of rationalising all
accounts held; closing and merging as
appropriate and implementing proper
financial management and control.
Use the on-line Church in Wales recommended
format for accounts or a church accounts
package such as those offered by Data
Developments.
For the avoidance of doubt to avoid
misunderstanding and to make the
purpose and vision of your church clear:
 Agree and communicate a reserves
policy
 Agree and communicate an
expenditure policy (authority; tender
process, etc)
 Agree and communicate a legacy
policy
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Communication and reporting...
The church treasurer should report briefly at
each PCC meeting on income and
expenditure to date; projected; and
against the annual budget, monitoring
performance and advising on matters
arising.
 Why not form a finance sub group to work
and support the treasurer and ensure the
best parish financial management? It’s a
good way to involve and include others
and use the skills that they have!
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Finance & Mission...
 Mission Action Planning...cost your churches
priorities...be sure to include all aspects of
church life.
 Your parish budget should mirror the
priorities outlined in your Mission Action
Plan. What does your annual budget say
about what’s really important to your
church? Use the budget template on –line.
An annual budget is a requirement of the
Charity Commission and should form part of
your annual parish report & accounts.
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Review, review, review...
Constantly review what you are doing and
why you are doing it.
Ask questions of your incumbent and PCC.
Suggest better ways...
Look for ways to save money and to be
efficient...
But where does your church need to spend
more to be more effective?
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In more detail...
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Jan Boyce, Diocesan Accountant.