Policies and Procedures for Your Church Finance Committee

The members of a church’s finance committee have a huge responsibility. They are tasked with collecting and disbursing funds to make sure the church remains financially sound. They must also make decisions that affect the church’s finances on a daily basis.

Here are some helpful guidelines, common policies, and standard procedures for the finance committee at your church.

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Church Internal Controls

Church financial policies and procedures stem from the need for transparency and internal controls. Some procedures may vary based on the size of your church and the available staffing. However, these policies are intended to demonstrate accountability, reduce the risk of fraud, and keep financial team members aboveboard so accusations of mismanagement (if any are made) have no merit. Because of that, churches of all sizes will want to implement internal controls for their own protection.

Internal controls may include but are not limited to the following:

• There should always be at least two people present when transporting cash or checks to a safe or to the bank.
• Always make sure the safe is locked.
• Never leave a safe key unattended or in an unlocked drawer or cabinet.
• If the safe has a combination lock, do not write it down anywhere, and do not share the code with anyone who is not authorized to have it.
• At least two people should be present when counting physical tithes and offerings, and anyone present should be cleared to have access to the counting area.
• A second person should count the tithes and offerings to verify that the amount matches the initial count.
• Bank deposits should be made at least weekly to minimize the amount of cash on hand.
• Itemized receipts should be reviewed by someone other than the purchaser to make sure the amounts are accurate.
• Purchased items should be reviewed to verify that they are all legitimate church expenses and that all items are accounted for.
• Bills should be approved by someone other than the person paying them.
• Bank account statements should be reviewed at least monthly by the finance committee.
• Initiate an annual private audit to make sure no financial discrepancies or holes are found.
• Have clear reporting procedures if anyone notices any policy violations.

The Roles of Primary Church Finance Committee Members

The typical role of a church finance board member will be to evaluate church financial records, prepare the church budget, and supervise other church finance board members. This means you must attend meetings, keep up on church finances, and counsel other members of the board as needed.

Below is a breakdown of common tasks and responsibilities associated with three of the main finance committee members.

The Financial Secretary

The secretary is usually responsible for tracking and reporting contributions to the church. Tasks related to this role include:

• Supervision of the offering count
• Deposit of the offering
• Recording and tracking contributions

This role also requires regular communication with other committee members and church leaders when needed. For example, there may be conversations about financial resources with the treasurer, discussions about policies with the chairperson, occasional talks with the pastor when needed, or interactions with the congregation when there are questions about giving trends or contributions as a whole.

The Treasurer

The treasurer is usually tasked with making most of the financial decisions on behalf of the finance committee. The duties of the treasurer primarily fall into two areas:

• Reporting – Providing reports and updates on finances, attendance, tithing, expenses, etc.
• Disbursement Of Funds – Allocating money to any previously agreed upon causes and expenditures

As treasurer, it will also be essential to interact with a wide range of people to fulfill church obligations. These relationships typically involve working with the financial secretary on a regular basis, discussions with the committee chairperson regarding major financial decisions, and weekly conversations with the pastor regarding the health and direction of the church.

The Chairperson

Also referred to as the “chair,” this committee member’s role is to oversee the financial health and direction of the church. The responsibilities of the chair vary from church to church, but they usually consist of the following activities:

• Creating the annual church budget
• Developing and implementing strategies that will generate the funds necessary to successfully achieve budget benchmarks
• Distributing any funding received based on recommendations from church leaders
• Leading the secretary, church treasurer, and other committee members as needed
• Recruiting assistance for counting the offering as needed
• Arranging bonding for the treasurer or any other members who deal with cash on a regular basis
• Keeping church leaders up to date on any new trends or developments related to church finances

The chairperson of the committee will be interacting with committee members, groups, members of the congregation, and church leaders as required.

General Responsibilities and Duties of the Finance Committee

The finance committee as a whole is tasked with generating and maintaining church funds to support the organization. They are responsible for maintaining and auditing the church’s financial records, and they must make decisions that will directly affect the church’s finances.

Below is a breakdown of the general responsibilities and duties of the committee.

Creation of the Church Budget

The finance committee should create a general budget that takes into consideration the individual budgets of each department. The chair usually gives final approval before it is officially announced.

Forming and Managing a Reserve for Emergencies

The committee should decide on a percentage for an emergency reserve and then set aside that percentage accordingly for unforeseen situations. A healthy habit is to add to this on a yearly basis so you are prepared when an emergency arises.

Reporting on Church Finances

Monthly, quarterly, and annual reports should be created to keep church leadership and the congregation apprised of budget projections, spending, attendance, offerings, and any other relevant data.

Protection of Church Assets

The board and the finance committee should be working together to create policies that protect the church against unpleasant topics like fraud, embezzlement, etc. They are not fun to talk about, but having these discussions and creating safeguards to avoid them is a necessary evil.

Establishing and Maintaining a Profit Margin

Another sign of a healthy church is the creation of a fund that is solely created to maintain a profit margin for the ministry. Similar in concept to an emergency reserve, the committee should set aside a predetermined percentage of any income that is generated by the church as a safety net that can be reinvested into future church projects.

Supervising and Managing Spending and Debt

The finance committee should either have a plan in place or create a plan to pay down debt so the church is not limited financially. Churches with financial flexibility stand a much better chance of staying on budget and achieving their vision for the foreseeable future.

Educating Church Leaders on the Church Budget and Budget Management

Teaching church leadership the basics of budget and budget management will help them know how to interpret reports. They may also be able to assist if someone from the committee is out for an extended period of time.

Assistance for Church Finance Committees

As you can see, the church finance committee is responsible for a significant part of the church’s success and well-being, and participating requires a lot of time, patience, and knowledge.

Fortunately, there is a tool that was specifically created for the challenges that come with managing church finances. Thousands of churches currently use Aplos to simplify their finances and accounting, saving a ton of time and sanity in the process.