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 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:
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 secretary is usually responsible for tracking and reporting contributions to the church. Tasks related to this role include:
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 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:
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.
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:
The chairperson of the committee will be interacting with committee members, groups, members of the congregation, and church leaders as required.
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.
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.
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.
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.
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.
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.
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.
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.
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.
