FAQ: Church Finances
Audit
- When is our church audit report due?
- Our treasurer prepares a monthly income statement and balance sheet. Is this considered enough review to meet the annual audit requirement?
- Who can perform our local church audit?
- What is a local church audit and why should we do one?
- Can volunteer CPAs provide audit assistance?
Custody of Assets
- Why do we have to use drop bags as part of our internal controls? It just seems that the Pastor wants us to spend money on those bags, or he/she doesn’t trust us.
- Does the Pastor have to know what we are spending, or when we are spending the church’s money? We have been doing this before he/she got here.
- Our Pastor says that the finance officers should not be counting the money, why? We have never had any problems with finance before.
- Why is Pastor recommending that the check register be kept at the church?
Reconciliations
- What is the procedure for transferring money out of one church account into another?
- Why can’t the treasurer reconcile the bank statements and checkbook alone, she has always done it that way?
Record Keeping
- Should we include direct disbursements from a church member’s IRA account on their year-end giving statement?
- Is there a process where we could re-designate unused restricted funds to another purpose in our church?
- What should our church include in the year-end statements we send to our donors?
- Where do the records need to be kept? By whom?
- Why do the records need to be at the church?
- What records must be kept? How long?
Other
- Can mileage from the parsonage or my pastor’s home to the church be reimbursed as business mileage?
- Is there a process where we could re-designate unused restricted funds to another purpose in our church?
- How does our church determine what mileage should be reimbursed for our pastor?
- Our church sold our parsonage and started giving our pastor a housing allowance instead. Can we use the money from the sale of the parsonage to pay the housing allowance?
- When is our church audit report due?
- What should our church include in the year-end statements we send to our donors?
- Do we need to have W-9 forms on file for all of our vendors?
- Is there a way our church can receive tithes and offerings from our members by credit card or electronic transfer?
- Does the Conference recommend certain accounting software for churches to use?
- Does my church need a federal Employer Identification Number (EIN)?