MinistryLift Conference
October 4, 2013
John Webber
Seminar Description
This seminar covers the practical issues of creating and
managing a budget and helps people understand how to
read and interpret their organization’s (e.g. church,
corporation, etc.) financial statements.
Agenda
 Important Considerations
 The Process, Mission to Financial Reports
 Important Considerations
 From Mission to Financial Reports
 Faith
 Prayer
 The Process, Practical
 Time
 Accounts
 Budget
 Financial Reports
 Questions/Comments
Important Considerations
Designated legally as a Non-Profit Organization
Resource
http://www.cica.ca/focus-on-practiceareas/governance-strategy-and-risk/not-forprofit-director-series/npobriefings/item65428.pdf
Important Considerations
 Key Players
 Board

Accountability
 Administration


Internal Reporting
 To Board
 To Members and Constituents (Donors)
External Reporting
 CRA (T1030)
 Auditor
Important Considerations
Leadership Accountability
Obey your spiritual leaders and submit to themcontinually recognizing their authority over you; for
they are constantly keeping watch over your souls and
guarding your spiritual welfare, as men who will have
to render an account (of their trust).
Hebrews 13: 17 (Amplified)
From Mission to Finance
To understand the numbers on financial statements it is
necessary to understand what is behind the numbers.
From Mission to Finance
Strategies
M
I
S
S
I
O
N
Long-term Plan
Short-term Plan
Budget
R
E
S
U
L
T
S
R
E
P
O
R
T
I
N
G
Faith-based NPO Advantage and
Challenge
 GOD is central to our mission and planning
 Discernment
The Faith Component
“A church will face a crisis of belief when God
invites them to become involved in a work only
He can accomplish.
Faith and action will be required”
Experiencing God
Have you made
a “HEAD” commitment
or have you made
a “HEART” commitment?
Prayer
FOR UNITY
I want men everywhere to lift up holy hands in prayer.
1 Tim. 2: 8
FOR WISDOM & DISCERNMENT
But the wisdom that comes from heaven is first of all
pure; then peace-loving, considerate, submissive, full
of mercy and good fruit, impartial and sincere.
James 3: 17
FOR PROTECTION
Your enemy the devil prowls around like a roaring lion
looking for someone to devour.
1 Pet 5:8
Process
Process – Time Details
 Time Frames
 Some information is reported as at a point of time
 Some information is accumulative. Sums over a specific
period of time.
 Time Periods
 Calendar Year-end – 12 month period ending Dec 31.
 Fiscal Year-end – 12 month period ending as at date
(month end) determined by Board and continues.
Process - Accounts
 Financial Reports show summarized totals for the sum
of related accounts.
 Chart of Accounts – all accounts used by
administration to record transactions.
Financial Statements - Accounts
Assets
Revenues
Cash and Cash Equivalents
Offerings
Accounts Receivable
General
Prepaid Expenses
Contributions in kind
Investments
Missions
Capital Assets, Property and Equipment
Interest and Other Income
Liabilities and Fund Balances
Investment Income
Bank Indebtedness
Expenses
Accounts Payable
Mortgage Payable
Other
Fund Balances
Invested in Capital Assets
Externally Restricted
Special Fund
Internally Restricted
Unrestricted
Salary and Related
Facilities
Ministries
Nursery
Children
Youth
Adult
Missions and Outreach
Administration
Amortization of Capital Assets
Interest and Bank Charges
Chart of Accounts
Example - Salaries and Related
Salary
Individual 1
Individual 2
Individual 3
Benefit Remittance
CRA Income Tax
CRA CPP
CRA EI
Benefits
Benefits
Paid by
Paid by
employee employer
Income Tax EI paid by
Deductions employee
EI paid by CPP paid by CPP paid by
employer employee employer
Chart of Accounts
Example – Donations (Contributions)
General
Fund
Missions
Special
Projects
by Envelope
by EFT
by Credit Card
anonymous
requires recording by donor and year end receipting.
Accounting for Contributions
 Deferral Method
 Restricted Fund Method
From Mission to Finance - Budget
Strategies
M
I
S
S
I
O
N
Long-term Plan
Short-term Plan
Budget
R
E
S
U
L
T
S
R
E
P
O
R
T
I
N
G
Budgeting
PRAYER AND DISCERNMENT
M
I
S
S
I
O
N
S
T
R
A
T
E
G
I
E
S
Previous years results
Input from leaders in
category areas
Finance Officer/Board
Budget
Balancing the Budget
Revenues
Expenses
 What can be expected based
 What are the total expected
on historical giving?
 What special circumstances
may impact revenue in this
year?
 Based on our estimated plan
for the year, what in faith do
we believe God will do?
expenses that will be required
to be paid?
 What expenses are fixed?
 What can be eliminated or
decreased?
 What needs to be increased?
Board and Congregational Approval
Financial Reporting
Periodic
Reports
Previous Years
Results
Actual
results vs.
Budget
Year end
Financial
Reports
Year end Financial Reporting
 Statement of Financial Position (at point of time)
 Statement of Operations (over a period of time)
 Statement of Changes in Net Assets (over a period of
time)
 Statement of Changes in Cash Flows (over a period of
time)
 Notes to Financial Statements
Statement of Financial Position
Church Name
Statement of Financial Position
As at December 31, Current Year
Current Year
Operating Fund
Capital Asset Fund
Previous Year
Special Funds
TOTAL
Assets
Current Assets
Cash and Cash Equivalents
$
Accounts Receivable
Prepaid Expenses
102,951
$
$
-
$
104,951
2,341
170
170
105,462
Investments
2,000
2,341
2,000
-
33,000
17,000
Capital Assets, Property and Equipment
(Note 2)
1,128,000
$
153,547
2,648
376
107,462
156,571
50,000
20,300
1,128,000
1,150,000
33,000
1,128,000
17,000
1,178,000
1,170,300
138,462
1,130,000
17,000
1,285,462
1,326,871
Liabilities and Fund Balances
Current Liabilities
Bank Indebtedness
$
Accounts Payable
850
$
1,870
Mortgage Payable
75,000
2,720
75,000
Mortgage Payable (Note 2)
-
825,000
Other
650
850
$
1,555
75,000
75,000
77,720
77,305
825,000
900,000
650
650
825,000
Invested in Capital Assets
-
Externally Restricted
-
Special Fund
-
-
750
1,870
400
825,650
900,400
228,000
228,000
175,000
2,000
2,000
Fund Balances
Internally Restricted
Unrestricted
17,000
15,000
33,000
33,000
3,150
102,092
102,092
156,016
135,092
$
-
17,000
138,462
230,000
$
1,130,000
17,000
$
17,000
382,092
$
1,285,462
349,166
$
1,326,871
Statement of Financial Position - Assets
Church Name
Statement of Financial Position
As at December 31, Current Year
Current Year
Operating Fund
Capital Asset Fund
Previous Year
Special Funds
TOTAL
Assets
Current Assets
Cash and Cash Equivalents
Accounts Receivable
Prepaid Expenses
$
102,951
2,000
$
-
$
104,951
$
153,547
2,341
2,341
2,648
170
170
376
107,462
156,571
50,000
20,300
1,128,000
1,150,000
105,462
Investments
$
2,000
33,000
Capital Assets, Property and
Equipment (Note 2)
-
17,000
1,128,000
33,000
1,128,000
17,000
1,178,000
1,170,300
138,462
1,130,000
17,000
1,285,462
1,326,871
Statement of Financial Position – Liabilities and Equity
Current Year
Operating Fund
Capital Asset Fund
Previous Year
Special Funds
TOTAL
Liabilities and Fund Balances
Current Liabilities
Bank Indebtedness
$
Accounts Payable
850
$
1,870
Mortgage Payable
75,000
2,720
75,000
Mortgage Payable (Note 2)
-
825,000
Other
650
-
850
$
750
1,870
1,555
75,000
75,000
77,720
77,305
825,000
900,000
650
400
825,650
900,400
175,000
650
825,000
Invested in Capital Assets
-
228,000
228,000
Externally Restricted
-
2,000
2,000
Special Fund
-
Fund Balances
Internally Restricted
Unrestricted
17,000
17,000
15,000
33,000
33,000
3,150
102,092
102,092
156,016
382,092
349,166
135,092
$
-
138,462
230,000
$
1,130,000
17,000
$
17,000
$
1,285,462
$
1,326,871
Statement of Operations
Church Name
Statement of Operations and Changes in Fund Balances
For the Current Year ended December 31, Current Year
Current Year
Capital Asset
Fund
Operating Fund
Previous Year
Special Funds
TOTAL
Revenues
Offerings
General
$
Contributions in kind (Note 3)
91,682
$
2,000
$
2,000
$
95,682
$
85,364
7,500
7,500
10,870
10,870
10,560
Self-Supporting Ministries (Note 4)
5,600
5,600
4,800
Interest and Other Income
1,000
1,000
950
Investment Income
3,500
3,500
3,325
124,152
104,999
Missions
120,152
2,000
2,000
-
Expenses
Salary and Related
$
Facilities
68,500
$
68,500
$
64,000
12,060
12,060
6,248
Nursery
1,300
1,300
1,250
Children
4,500
4,500
4,439
Youth
5,600
5,600
4,720
Adult
3,465
3,465
3,496
Missions and Outreach
2,549
2,549
2,649
Self-Supporting Ministries
5,600
5,600
4,800
6,100
6,100
5,891
24,000
3,015
Ministries
Administration
Amortization of Capital Assets
24,000
Interest and Bank Charges
5,125
5,125
114,799
Excess of Revenues over Expenditures
Fund Balances, January 1
5,353
$
Interfund Transfers
Fund Balances, December 31
24,000
206,739
-22,000
$
-77,000
$
135,092
-
175,000
498
138,799
2,000
101,006
-14,647
3,993
$
15,000
$
396,739
$
392,746
$
17,000
$
382,092
$
396,739
77,000
$
230,000
0
Statement of Operations - Revenues
Church Name
Statement of Operations and Changes in Fund Balances
For the Current Year ended December 31, Current Year
Current Year
Operating Fund
Capital Asset
Fund
Previous Year
Special Funds
TOTAL
Revenues
Offerings
General
Contributions in kind (Note 3)
$
91,682
$
2,000
$
2,000
$
95,682
$
85,364
7,500
7,500
10,870
10,870
10,560
Self-Supporting Ministries (Note 4)
5,600
5,600
4,800
Interest and Other Income
1,000
1,000
950
Investment Income
3,500
3,500
3,325
124,152
104,999
Missions
120,152
2,000
2,000
-
Statement of Operations - Expenses
Current Year
Capital Asset
Fund
Operating Fund
Previous Year
Special Funds
TOTAL
Expenses
Salary and Related
$
Facilities
68,500
$
68,500
$
64,000
12,060
12,060
6,248
Nursery
1,300
1,300
1,250
Children
4,500
4,500
4,439
Youth
5,600
5,600
4,720
Adult
3,465
3,465
3,496
Missions and Outreach
2,549
2,549
2,649
Self-Supporting Ministries
5,600
5,600
4,800
6,100
6,100
5,891
24,000
3,015
5,125
498
138,799
101,006
Ministries
Administration
Amortization of Capital Assets
24,000
Interest and Bank Charges
5,125
114,799
Excess of Revenues over Expenditures
Fund Balances, January 1
5,353
$
Interfund Transfers
Fund Balances, December 31
24,000
206,739
-22,000
$
-77,000
$
135,092
-
175,000
2,000
$
15,000
-14,647
$
396,739
3,993
$
392,746
77,000
$
230,000
0
$
17,000
$
382,092
$
396,739
QUESTIONS
& COMMENTS