Finance Committee, October 12, 2016

Minutes of the Finance Committee

First United Methodist Church, Santa Rosa

Wednesday, October 12, 2016 - Carriage House

 

Present:  Greg Roth (Chair), Ryan Comiskey, Mike Ferrel, Peg Ferrel (Lay Delegate to Annual Conference), Bill Stephens (Lay Leader/Staff Parish), Heather Young (Recording Secretary), Norm Hardin (a representative from Trustees), and Mary Brunet (Business Administrator).

Absent: Charlie Amezcua, Chris Bowen, Tokasa Buinimasi, and Jack Dupre.

 

Greg Roth called the meeting to order at 7:05 p.m., beginning with a prayer.

 

Approval of Minutes

Minutes were approved via email prior to the meeting, and posted to the FUMC website.

 

Finance Report

Greg reviewed the September financial statements.  Year-to-date (YTD) Pledges and Gifts were 97.65% of the budgeted amount.  YTD Total Income was 98.14% of the budgeted amount.  Total Income for September was only 88.69% of the forecasted amount, marking the second month in a row of income significantly below expectations. 

YTD Total Expenses were 92.88% of the budgeted amount.  There were several reasons for expenses falling below the forecasted amount, but two of the main reasons were: (1) FUMC has not had a full-time associate pastor for many months, even though we originally budgeted for one; and (2) Commissions expenses were below forecast.  YTD Net income (Total Income minus Total Expenses) was $8,083.49, which was better than the YTD forecasted amount by $38,007.59. 

The main checking account balance was $67,333.87 and the operating fund balance was $45,439.81.

 

In a discussion of the Angels’ Attic financial statements, Greg noted that Angels’ Attic was only able to donate $700 year-to-date to local charities.  Mike observed that some of the outreach and benefits provided by Angels’ Attic does not show up on its financial statements.

 

Stewardship Campaign Report

Heather reported on the progress and plan for the upcoming Stewardship Campaign. The themes are set for each of the 5 weeks of the campaign. Much work remains to be done and Heather asked for prayers for the success of these endeavors. Peg Ferrell has taken responsibility for the Stewardship Dinners and reported on the plans for them. Greg and Mary have made significant progress developing the Narrative Budget which will support the campaign.

 

Narrative Budget

Mary and Greg reported on the development of our FUMC Narrative Budget - categories were defined and total expenses (operating and mortgage) were allocated approximately as follows: Worship 34%, Discipleship 19%, Nurture 18%, Outreach 19%, The Wider Church 11%. (Ministerial salaries were allocated as Worship 52%, Discipleship 16%, Nurture 15%, Outreach 16%, and The Wider Church 1%. Office staff is allocated as Worship 29%, Discipleship 20%, Nurture 30%, Outreach 20%, and The Wider Church 1%.)

 

Financial Controls Task Force Report

Greg presented the “Summary of the Financial Controls Task Force Meeting of September 19, 2016 (attached to these minutes). Mike Ferrel moved that the Recommendations in that report be adopted with the deletion of the title “Financial Secretary” in both recommendations. Further, wherever this current report changes or contradicts previous decisions (including last month’s minutes), this new report will supersede any previous decisions. Seconded by Greg Roth and discussed. Motion passed unanimously.

 

Mike Ferrel moved that the duties of the church Treasurer, as outlined in the Book of Discipline, shall be performed by the church’s Business Administrator. Seconded by Bill Stephens and passed unanimously.

 

The Ferrels both volunteered to be counters, starting in January. Additional counters are needed. Counters will need to be in the church for an hour each Monday, coffee will be provided.

 

Fundraising Requests

Greg moved to approve the request for a fundraiser to be held by the youth group October 30 and November 6 for a “30-Hour Famine Event” to support World Vision. Mike Ferrel seconded and it passed unanimously. Greg will inform Jacob Wilbur that next year we recommend the event be held in September or earlier, to avoid overlapping with the Stewardship Campaign.

Other Business

Discussion of the Finance Committee’s annual report to Church Council (moved to March), the upcoming Leadership Summit (Oct 22), and Larry Schmidt’s Thank You to the Finance Committee.

 

The meeting adjourned at 9:15 p.m. with a prayer by Mary Brunet.

 

Next meeting: 7:00 p.m. November 9, 2016 - Carriage House

 

Respectfully submitted by Heather Young, Recording Secretary.

Summary of the Financial Controls Task Force Meeting

September 19, 2016

Participants

Greg Roth, Jack Dupre, Mary Brunet and Janin Comiskey

Background

At the Finance Committee meeting on September 14, we reviewed the comments and recommendations from the recently-completed internal controls review by Goranson and Associates. In addition, we reviewed the UMC Book of Discipline section relation to financial controls.   Both suggest that we need to change our current process on handling deposits and bank account reconciliation.  A small task force consisting of the above named individuals was asked to meet, discuss the situation and make recommendations.

Discussion

The basic problem is that the same individual (the Bookkeeper/ Financial Secretary) should not prepare deposits, enter them into Power Church, make the deposits, and reconcile the bank statement.  In particular, the Book of Discipline prohibits the Bookkeeper/Financial Secretary and the Business Administrator/Treasurer from reconciling the bank account.  The BOD prohibits the Business Administrator/Treasurer from making deposits.  The auditor that reviewed FUMC’s internal controls reported that the Bookkeeper/Financial Secretary should not prepare the deposit, make the deposit and enter it into Power Church.  Our current process is that for particular sources of income, volunteers count the money and checks and prepare the deposit.  The Bookkeeper/Financial Secretary checks the deposits, enters it into Power Church and delivers the deposits to the bank.

Recommendations

1.All counting and deposits will be handled by volunteers.  The Bookkeeper/Financial Secretary will be provided with a form indicating the source, amount and date of the deposit.  To accomplish this, we estimate that four additional volunteers will be needed.  Greg and the Finance Committee members will solicit these volunteers.

 

2.The monthly online bank statements will be forwarded to the Finance Chair for manual reconciliation.  Separately, the Bookkeeper/Financial Secretary will reconcile the bank statements using PowerChurch.  The Finance Chair will compare the two reconciliations for consistency.

Summary

If the recommendations are implemented, our Bookkeeper/Financial Secretary will no longer participate in deposits and will not be the only individual reconciling the bank statements.  We believe these changes would eliminate the main concerns (regarding deposits and bank reconciliations) that were raised by the auditor.  These changes would also move FUMC’s internal controls into greater compliance with the Book of Discipline Guidelines for Finance.

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Wed, 10/12/2016 - 19:00