|
Financial
Policies for Parishes
Diocese of Palm Beach
Parish Finance Councils
Introduction: Since 1983, the Code of Canon Law (c. 537)
requires that “each parish is to have a finance council which is
regulated by universal law as well as by norms issued by the
diocesan bishop; in this council the Christian faithful,
selected according to the same norms, aid the pastor in the
administration of parish goods.” This canon makes it clear,
however, that the finance council does not substitute for the
pastor as the chief administrator and legal representative of
the parish’s goods and refers to canon 532 which charges the
pastor to care for the parish’s goods and to represent the
parish in all juridic affairs.
Application: The finance council serves in a critical
advisory and consultative role to the pastor in all business
affairs of the parish. It should be memorialized at the parish
level through a charter which addresses matters such as its
purpose, membership, term of office and vacancies, officers and
duties, meetings and voting. An active finance council is an
important goal with meetings to be held regularly, at least on a
quarterly basis. A record of meetings should be maintained on
file documenting the main topics discussed and any votes taken.
Responsible financial management requires that the finance
council, in concert with the pastor, maintain vigorous oversight
of the financial affairs of the parish. Together, they should
regularly oversee the accounting function and its work product
including budgets and financial statements reflecting income and
expenses, parish savings and indebtedness. They should regularly
evaluate operating and capital requirements, as well as assess
the condition of the physical plant and plan for improvements.
Internal controls, which are vital to the effective and
efficient operations of the parish, normally rely to a large
extent on the adequate separation of accounting duties among
staff personnel. However, with limited staff or an accounting
staff of one, such separation may be difficult to achieve. Under
these circumstances, the pastor and finance council can
compensate for such a deficiency through diligent oversight.
Finally, the finance council should assist the pastor in the
regular reporting of the parish financial results. A
comprehensive report is an important element of accountability
and transparency and is required to be submitted to the Pastoral
Center on a quarterly basis and to the parish community as a
whole at least annually.
Diocese of Palm Beach
Entity Audit Program
Introduction: In late 2004, Bishop established the
“Sub-Committee on Entity Audits” and charged the members with
examining the existing policy of the diocese and making
appropriate recommendations. In January of 2005, the
Sub-Committee reported to the Presbyteral Council as follows:
We all share a fiduciary responsibility to see that the
financial resources made available to us are used in a manner
consistent with our mission and respecting the donor’s intent.
In this regard, accountability and transparency are necessary to
evidence the discharge of these responsibilities, maintain our
credibility as stewards and instill confidence on the part of
the donor. It is in this spirit that the following
recommendations are made:
-
The existing policy of financial audits only with a change
of pastor is no longer adequate. Our finance councils,
parish communities and donors seek the assurance of
regularly scheduled audits with reports which are available
to interested parties.
Recommendation: Every diocesan entity be subject to a
form of audit/review on a biennial basis (every two years).
-
Credibility of the work product can be significantly
enhanced with the independence of an outside accounting firm
as opposed to diocesan internal audit.
Recommendation: The biennial audit/review be performed by
an independent accounting firm with a report to the
applicable Pastor, President and Bishop (and/or his
designees).
-
Fees associated with this audit/review have been estimated
for a stand-alone entity (church or high school) and for
parishes with a parochial school.
Recommendation: All fees be paid by the entity subject to
audit/review.
The report and its recommendations were accepted by the
Presbyteral Council and upon further consultation with the
College of Consultors and Diocesan Finance Council, Bishop
approved the recommendations. Therefore, as of the new fiscal
year beginning July 1, 2005 it became the policy of the Diocese
of Palm Beach to conduct audits as set forth above.
Application: It is important to distinguish these entity
audits from true independent audits – the purpose of which is
the expression of an opinion on the entity’s financial
statements. These are “agreed-upon procedures” engagements which
focus on the adequacy of internal controls and adherence to
policies and procedures. They are largely compliance oriented
and examine the control environment which generates the
applicable financial statements. Responsibilities are as
follows:
Pastor Responsibilities:
-
Initiate planning with parish finance council, parish
finance staff and outside accountants to ensure that
engagement is initiated and completed within assigned year;
-
Select accounting firm from approved list and coordinate
with firm and parish staff for a mutually convenient date to
begin engagement during the year. Financial statements to be
used may be end of fiscal year or any calendar quarter.
(Example: For required audit cycle year ended 6/30/06, the
financials for 6/30/05, 9/30/05, 12/31/05 or 3/31/06 may be
utilized;
-
Support the outside accountants during the engagement
providing whatever information (verbal and written) is
required;
-
Provide outside accountants with standard “representation
letter” at the completion of the engagement evidencing full
cooperation with all elements of the uniform audit program;
-
Fully consider all aspects of the accountants report and, in
conjunction with parish finance council, respond in writing
to each of the comments and recommendations. Parish
responses are to be forwarded to the Diocesan Finance
Office;
-
Insure that outside accountants fees (as previously
estimated) are paid in full.
Bookkeeper Responsibilities:
-
Assist Pastor in the planning and scheduling of the
engagement;
-
Assemble all required documentation in advance of the
arrival of outside accountants;
-
Notify the Diocesan Finance Office of the scheduled start
date and ultimate completion date of the engagement;
-
Support the outside accountants during the engagement
providing whatever information (verbal and written) is
required;
-
Assist Pastor and parish finance council in responding to
accountant’s report.
Diocesan Finance Office Responsibilities:
-
Develop “Entity Audit Cycle” schedule;
-
Identify, negotiate with and select outside accounting
firms;
-
Develop “Entity Engagement Program” for churches and schools
and provide to entities and outside accounting firms;
-
Support entities in the planning and scheduling of
engagements;
-
Provide outside accountants with current account information
pertaining to entity savings and loan accounts, fixed
assets, pension, health and property and liability
information for each entity prior to audit;
-
Monitor entity audit cycle progress throughout the year;
-
Receive all outside accountant reports and applicable parish
responses, log-in, review and follow-up on unresolved
problem areas;
-
Provide accountants reports and entity responses to Audit
Committee of the Diocesan Finance Council;
-
Provide Bishop and Diocesan Finance Council with appropriate
summaries of entity audits.
Diocese of Palm Beach
Parish Procedures for the Collection
and Count of Weekly Offertory
Introduction: In an effort to provide additional guidance
for more uniform procedures which incorporate critical internal
controls over the collection and count of weekly offertory, the
following has been approved by Bishop as the policy of the
Diocese of Palm Beach effective November 2003:
Application: Responsible stewardship demands that the
weekly gifts from the faithful be given appropriate
consideration as the parish’s most vulnerable financial asset.
Weekly offertory, which represents the monetary lifeblood of the
parish community, must be properly safeguarded, counted,
deposited and recorded. A system of internal control that
emphasizes honest and capable staff, as well as a clear
separation of duties, is essential. This segregation should
preclude any one individual from performing all aspects of the
function. Fundamentally, custody of assets must be separated
from the bookkeeping for those assets. Each of the parties in
the weekly offertory process should play a clearly defined role.
And generally, the greater the number of individuals involved,
the stronger the internal control.
Overview of Roles:
Pastor: While the parish pastor may play any role in the
collection and count of weekly offertory, his primary function
should be one of oversight. He should periodically observe the
collection process and the performance of ushers. The physical
control and safety of the offertory prior to count is critical,
with only the pastor and his designee having safe combinations
or lock keys. Periodic observation of the count team is most
beneficial, as is an occasional comparison of tally sheet totals
to deposit totals to recording of offertory on the parish books.
The pastor’s involvement in the process should not be routine,
but rather variable and unpredictable.
Parochial Vicar: The parish pastor may delegate some or
all of his responsibilities for the weekly offertory to the
parochial vicar. Acting as a team, they may increase their
observation and coverage of the process.
Ushers: The collection, bagging and initial security of
the offertory is a critical responsibility of the usher staff.
Ushers should work in teams when handling collection proceeds.
No one individual should be permitted to have sole custody of
the offertory without the opportunity for observation by an
independent party. Ushers should not have safe combinations or
lock keys. Their responsibility ends when the offertory is
properly secured.
Count Team: In addition to the obvious tasks of opening
bags, sorting collections, counting money, accumulating checks
and preparing the deposit, a team member must complete the
weekly “tally sheet” for control, recording and audit trail
purposes. Teams and/or members should be rotated whenever
possible and longevity in the same position is not desirable.
Bookkeeper: Ideally, the role of the bookkeeper is only
the recording of the detail deposit information in the parish
records. The source documents are the receipted deposit slips
and the detailed tally sheet. While the bookkeeper may provide
support with other count functions, he/she should not have
control over the preparation of the tally sheet, the applicable
deposit slip(s) or make the physical deposit at the bank.
Procedures
Collection at Mass
-
Ushers collect baskets with offertory and proceed to a
separate collection area where contents are transferred to
secure bag(s). An individual usher should never process
offertory alone. A team approach, with ushers independent of
each other, is essential for internal control.
-
Bags which lock or provide a secure seam should be used to
store offertory. Bags should be clearly identified by Mass
and collection so that offertory from each Mass on the
schedule may be accounted for.
-
Bags with their contents should be stored securely until
counting. The use of drop safes is preferred. In the
alternative, vaults or fireproof cabinets may be used.
However, knowledge of combinations or access to keys must be
limited.
Transfer to Count Area
-
When necessary, offertory bags must be transported to the
count room from the drop safe or other secure location. The
clergy or other responsible employee(s) who have access to
the safe combination or required lock keys should perform
this function.
-
For security reasons, it is preferable to have more than one
person transport these bags.
-
The bags should be given directly to the count team and not
left unattended.
Offertory Count
-
The offertory bags should initially be inventoried by the
count team to ensure that each Mass and collection is
represented.
-
The offertory count should be conducted in a secure location
(access door locked if possible). The area should be large
enough to accommodate all team members, with all activity in
clear view and subject to peer observation. Adequate
equipment (electronic bill counters, adding machines, etc.)
and supplies (wrappers, clips, bands, etc.) should be
available.
-
Team members should diligently count all loose cash, coin
and checks followed by the opening of envelopes. Envelope
contents must be marked on the envelope for future recording
of parishioner contributions in PDS (or other census
software). As the count progresses, a designated team member
must complete the weekly “Tally Sheet.”
-
A team member, independent of the tally sheet preparation,
should prepare the actual bank deposit. Offertory proceeds
being deposited should be maintained in a standard bank
issued deposit bag or other security device.
-
The total of all deposit slips should be compared with the
total collections recorded on the tally sheet. This control
function may be performed by the clergy or a count team
leader. Any differences must be reconciled. Members of the
count team should then sign the tally sheet evidencing their
presence and participation.
-
The completed tally sheet should be forwarded to the parish
bookkeeper for purposes of recording the offertory in the
parish books.
Deposit of Offertory
-
The bank deposit should be made as soon after the count as
possible. For temporary storage of the deposit, a safe, the
parish vault or other fireproof locking cabinet may be used.
Again, access to combinations or keys must be limited.
-
Transport of the deposit to the bank may be made by the
clergy or any responsible employee. Depending on
circumstances, security may be enhanced by the use of a
two-person team, employing a variety of vehicles, delivery
times, routes and bank branches. A consistent weekly pattern
of bank deposits is not desirable.
-
The receipted deposit slip(s) should be forwarded to the
parish bookkeeper for purposes of verifying the bank
deposit.
Recording the Weekly Offertory
-
The parish bookkeeper should promptly record the weekly
offertory deposit in the cash receipts journal. Distribution
by general ledger account is taken from the weekly tally
sheet.
-
The total deposit recorded in the parish books should be
compared with the receipted bank deposit slip(s) to verify
accuracy.
-
Weekly tally sheets and deposit slips must be maintained
with other accounting records in order to document
transactions and provide for an appropriate audit trail.
-
For internal control purposes, an independent verification
should be periodically performed by a member of the parish
clergy, finance committee or parish administrator. This
verification compares the tally sheet totals to the deposit
slip totals to the offertory receipt totals in the parish
books.
|
