Your treasurer or a finance committee can bring suggested budget numbers to the board for a vote. Your support person can help if there are any questions on how to identify/document those numbers.
Church Budgeting that works is dependent on accurate, consistent recordkeeping.
“Sideways transfers,” transfers of money between non-related funds, just to fix a negative number or to make a purchase, should not be done, for three reasons.
NOTE: When a Local Fund is low, money should come from Church Budget to fill it, not from a non-related Local Fund. Moving money from one Local Fund to another just because one is empty is not good church finance. It is like playing a shell game--robbing Peter to pay Paul.
For more detailed information on "sideways transfers", see part 1 and part 2
Using a random incorrect fund to avoid using the correct Local Fund because it has a negative balance: DO NOT pay bills from a different, random Local Fund. “Sabbath School Expense has a lot of money. Let’s just pay the electric bill from there.” No. Pay from the correct Local Fund.
If a fund has a zero or negative balance, but you have an expense to post to it, go ahead and post it. It will result in a negative balance, which then can be addressed by the board.
Eliminate Budget Busters and Trust Fund violations with these three simple rules.
When a Local Fund has a chronic negative Ending Balance, the cause should be investigated.
If the negative balance is caused by an unexpected expenditure, sometimes a one-time infusion from Church Budget is all that is needed. Sometimes the Budget Allocation amount needs to be raised. Sometimes, if finances are tight, the expenditures from that Local Fund may need to be curtailed.
The dollar amounts will be allocated as usual, even if that results in a negative balance in the Church Budget account. Percent amounts will only be allocated from funds remaining in Church Budget after distributing dollar amounts, so may not receive any funds. The shortfall will hopefully be made up for in future months. If not, the church board may need to reevaluate its budget and spending.
It is actually a good idea to zero out many of the expense funds at the end of the year. All Budget Allocations that came from Church Budget originally can be transferred back into the Church Budget fund, ready to be allocated in the new year.
However, not all Local Funds can be returned to zero. Trust Funds (Trust Funds 101 and How to Identify Trust Funds) should not be transferred out to Church Budget. If needed, your auditor can assist in making sure that Trust Funds remain untouched during this annual closeout and transfer.
Ministries like Women’s Ministries or Social Events can be given, by the church board, a budgeted amount for the year. That amount is divided by 12 and transferred into the Ministry Fund by the monthly Budget Allocation, or, if the church has the funds available, they can transfer the annual amount all at once in January. As the funds are spent, the Ending Balance decreases accordingly until it is all gone.
No. Any non-budget or non-approved transfers (anything that is not a regular, monthly transfer or one that the board has instructed the treasurer to carry out) must be voted by the board and recorded in the minutes, before the treasurer makes the transfer.
According to the SDA Church manual, donor designated trust funds are not to be borrowed or used for any purpose other than that for which they were donated. This is also state law, most often enforced by the state Attorney General office. That said, if a specific project, such a building fund, is ever abandoned, as in, never started and won’t be, there are very specific procedures that can be followed regarding the money that was donated to that project.
The board can vote (and let the SS members know) that all SS offerings from now on, for a specific time, will go for Building Fund or Church Budget or where else they vote to put them. Let SS members know that it will take a period of time to use the current balance, so SS Expense offerings are being temporarily halted. The important thing is that the donors be made aware. You should also temporarily inactivate any SS Expense options you have on your AdventistGiving local envelope.
Click here for more topics related to Budgeting
The original version of this page was provided to Jewel by the Georgia-Cumberland Conference Audit Team. Created by Linda McCabe.