2. Operating Budget

A. The Operating Fund

The operating fund consists of monies available to meet the needs of the budget approved annually at the congregational meeting for the fiscal year beginning on July 1.  The best sources of information about the operating fund are the budget itself, the monthly net income statement, and the Senior Minister’s monthly financial report to the board.

The typical budgeted income and expenses are currently about $1,400 per member and distributed as follows:

Income Expenses
Pledge Receipts 79% Administration & Building 39%
Plate & Donations 10% Lifespan RE 28%
Earnings 6% Worship & Music 14%
Fundraisers 5% Pastoral Care & Community 11%
Transfers and Other <1% Social justice & Outreach 8%

The balance in the operating fund is at all times equal to the net income for that portion of the current fiscal year.  If the operating fund suffers a net loss for the year, it will be covered by the balance in the reserve fund.

Because we have a balanced budget, the net income for the year is planned to be zero.  However, income and expenses are not distributed evenly through the year. In the first half of the fiscal year, income exceeds expenses, and the reverse happens in the second half of the year.  The net income typically peaks in December at about 8% of the total budget. If the net income peaks at less than this, experience shows that a deficit for the year as a whole is likely to follow.

B. Creating the Budget

The annual budget is one of two primary ways that the congregation achieves the mission and vision established by the Board of Trustees (the other being volunteer time provided by the congregation).  The Senior Minister is responsible for creating the Budget and for submitting this Budget to the Board of Trustees for review and affirmation before it is voted on by the congregation in the annual meeting.  

While the Senior Minister maintains authority over the whole of the budget, she delegates the authority and responsibility for particular portions to the staff members most directly responsible for the related operations.  This delegation begins during the creation of the budget when each budget owner is responsible for submitting a budget for their portion of the overall budget.

In January of each year, the Administrator informs the budget owners of the Board’s priorities as articulated in their Vision of Shared Ministry.  The Budget owners in turn create an operating plan and a corresponding budget to align with this Vision. At the same time, the Senior Minister projects the pledge drive  and other income and presents that to the Administrator. No later than mid-February, all items in the budget are communicated to to the Administrator by their respective owners.  

The Administrator consolidates the budget owners’ input into a single budget draft.  By late February, the Senior Minister reviews the budget draft and edits the budget to fit within the projected income and establishes the first version of the budget.  This version will be adjusted as the stewardship drive begins to take shape. Additionally, this draft is presented to the Finance Ministry Team for review and feedback.  

No later than the Board meeting in March, the Senior Minister finalizes the Budget to be presented to the Board of Trustees, who is responsible for reviewing and affirming the budget before it can be presented to the congregation.  

After the Budget has been affirmed by the Board of Trustees, sometime in late April or early May, the Finance Team presents the Budget to the congregation and hears their feedback and answers their questions.  The Finance Team incorporates this Feedback and prepares for the Congregational Meeting.

The Finance Team presents the final budget to the congregation during the annual meeting with the congregation, when the congregation has a chance to provide final input and to ask questions.   The congregation will also have a chance to vote on the budget at this time. Assuming that the budget is approved, it is then entered into QuickBooks by our bookkeepers no later than July 31 each year.

C. Spending and Spending Authority

The Senior Minister controls and is responsible for all spending from Church accounts, but delegates the responsibility for certain areas to the respective staff budget owners.  

Budget owners are authorized to spend within their budget for any of their budget areas.  Spending from within an area where a person is not a budget owner requires the explicit and advance permission of the budget owner.  

The Senior Minister retains all authority and responsibility for variations to the staff compensation budget.  Changes to this budget can be made only within the total budget for staff compensation for the whole budget.

The Senior Minister can at her discretion move money from one budget category to another, as long as the overall budget remains net neutral.  Any budget transfers beyond 3% of the total budget require that the Senior Minister reports these to the Board. As a result, the bookkeeper tracks budget transfer requests and informs the Senior Minister whenever an item approaches a 3% total.  

I. Credit Cards

In the interest of efficiency staff members may be issued a credit card to be used for church-related expenditures. Under no circumstances shall the cards be used for personal use or loaned to others. Credit card limits are determined by the administrator, but not to exceed $3,500.

Monthly, the employee reviews their credit card statement and provides a breakdown of the charges including amount, code for the budget and a brief description of item.  All card charges greater than $10.00 must be substantiated by a receipt. Unapproved purchases must be reimbursed to the church by the employee. The administrator may cancel a card for repeated lack of receipts or if he/she suspects inappropriate use of the card. The balance of credit cards will be paid each month so that no debt is incurred.  

D. Bookkeeping and Managing the Budget  

The Budget must not deviate from its projected net income by more than 1% of the total budget (in the negative).  When a projection beyond this exists, the Senior Minister is responsible for taking appropriate corrective operational action, as well as informing the Board of Trustees.

The Senior Minister works with the Finance Ministry Team to identify Budget categories for managing the budget and operation. Expenditures are classified by those making the purchases using these account categories and submitted to the bookkeeper no later than the first Thursday of each month.  The bookkeeper ensures that these classifications are entered correctly into QuickBooks and produces monthly financial reports for review by the Administrator no later than the 2nd Tuesday of each month.

The Administrator reviews the reports provided by the bookkeeper and makes any initial corrections.  Additionally she consults budget owners for variances and makes additional corrections or notes. Finally, the Administrator sends these updated reports to the Senior Minister for review and additional corrections. The Administrator sends this finalized report back to the bookkeeper for updates.  The bookkeeper sends the finalized reports to the Finance Ministry Team no later than the 3rd Tuesday.

The Finance Ministry Team meets on the 3rd Wednesday to review cash flow and budget management, and other concerns related to financial management.  Any actions from this meeting are taken back to the staff team by the Administrator and/or the Senior Minister.

Additionally, at the end of each quarter, the Administrator works with the bookkeeper to produce quarterly YTD reports for budget owners to review and to provide operational strategies and feedback for any variances and intended strategies to align the budget with actuals in meetings with the Senior Minister.  The Senior Minister provides a summary of these meetings to the Board of Trustees in the subsequent Board Meeting.

E. Emergency Expenditures

The Senior Minister and the Administrator may make emergency expenditures necessary for the well being of the church and make limited budget adjustments within the intent of the budget approved by the congregation.  Any such expenditures that will require a significant variation in the total budget will be promptly reported to the Board.

F. Payments and Reimbursements

To either request reimbursement, to have a bill paid, or to have a check issued, staff and lay leaders fill out a Request for Payment/Transfer Form, which can be found in the office mailbox marked “Payment/Transform Forms” or in this location.  Receipts and/or invoices should be attached, and then these are placed in the bookkeeper box.  

Forms placed in the bookkeepers box by Tuesday evening will be paid by the following Wednesday. If a check is needed sooner than this turn around, contact the Administrator who will attempt to meet the time requirements.  

Updated on September 12, 2018

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