Financial Transparency in Ministry

Monty Mananafolis · Aug 27, 2019

In this day and age people are generally more suspicious of churches, especially Mega-churches. The root source of this is two fold: Not believing in God and suspicion that the ministry is a fraud. I believe one way the church can assuage these concerns is by publishing GAAP compliant financial statements for public consumption. This will allow for public scrutiny of just how well churches really are spending the money. I can already hear the rebuttals.
1. How does this help the church?
It will mean the church has to be more honest about it's affairs which disinfects any fraud out of the ministry.
2. What business is it of the public how a private church spends its money?
The church isn't a private organization. Jesus said Go ye therefore and teach all nations. He made no exceptions. The church is for everyone. Therefore it's public.
If we really want to reach the world we must base our affairs on honesty.

Presbyterian Continuist · Aug 27, 2019

Monty Mananafolis said:
In this day and age people are generally more suspicious of churches, especially Mega-churches. The root source of this is two fold: Not believing in God and suspicion that the ministry is a fraud. I believe one way the church can assuage these concerns is by publishing GAAP compliant financial statements for public consumption. This will allow for public scrutiny of just how well churches really are spending the money. I can already hear the rebuttals.
1. How does this help the church?
It will mean the church has to be more honest about it's affairs which disinfects any fraud out of the ministry.
2. What business is it of the public how a private church spends its money?
The church isn't a private organization. Jesus said Go ye therefore and teach all nations. He made no exceptions. The church is for everyone. Therefore it's public.
If we really want to reach the world we must base our affairs on honesty.

I was the treasurer for my Presbyterian church for around 18 years. I kept strict financial accounts, and presented a monthly financial statement to the Parish Council. The accounts were audited by a professional auditor each year. Through these financial statements, the Parish Council were able to see and know what the money was spent on. When we employed a minister, his salary was set by the National Church pay schedules. Cheques for accounts and reimbursements were signed by two signatories and had to be approved by the Parish Council at the next monthly meeting. Each year, a budget was made up and approved by the Parish Council and ratified by the members at a congregation meeting. This meant total financial accountability.

Problems arise when a pastor is in sole charge of the church and its finances and does not present financial statements. A pastor in this position opens himself to fraud and misappropriation of funds and can find himself before a judge having to answer a criminal charge. My advice to members of such churches, when no financial statements are forthcoming, to withhold contributing money in the church offering until monthly financial statements are made available to members so they can see where their money is going. People give their money to the work of the Lord, not to line the pastor's pockets. Nevertheless, the pastor needs to be paid a reasonable, living wage for the hard work he does for the church, but the salary level must be approved by the members as been reasonable - not miserly, nor extravagant.

In my view, a pastor who withholds financial statements from the church members has something to hide, and there could be the smell of dishonesty and embezzlement of church funds - where there's smoke there could be fire.

Monty Mananafolis · Aug 27, 2019

Oscarr said:
I was the treasurer for my Presbyterian church for around 18 years. I kept strict financial accounts, and presented a monthly financial statement to the Parish Council. The accounts were audited by a professional auditor each year. Through these financial statements, the Parish Council were able to see and know what the money was spent on. When we employed a minister, his salary was set by the National Church pay schedules. Cheques for accounts and reimbursements were signed by two signatories and had to be approved by the Parish Council at the next monthly meeting. Each year, a budget was made up and approved by the Parish Council and ratified by the members at a congregation meeting. This meant total financial accountability.

Problems arise when a pastor is in sole charge of the church and its finances and does not present financial statements. A pastor in this position opens himself to fraud and misappropriation of funds and can find himself before a judge having to answer a criminal charge. My advice to members of such churches, when no financial statements are forthcoming, to withhold contributing money in the church offering until monthly financial statements are made available to members so they can see where their money is going. People give their money to the work of the Lord, not to line the pastor's pockets. Nevertheless, the pastor needs to be paid a reasonable, living wage for the hard work he does for the church, but the salary level must be approved by the members as been reasonable - not miserly, nor extravagant.

In my view, a pastor who withholds financial statements from the church members has something to hide, and there could be the smell of dishonesty and embezzlement of church funds - where there's smoke there could be fire.

Well, that's certainly a step in the right direction. Personally I don't see why GAAP compliant financial statements (balance sheet, cash flows, income statement) can't be published quarterly. I'm not saying you need to publish the pastors paycheck stub and personal accounts online but churches need to go out of their way to be transparent about their finances. It should be the law.

Presbyterian Continuist · Aug 27, 2019

Monty Mananafolis said:
Well, that's certainly a step in the right direction. Personally I don't see why GAAP compliant financial statements (balance sheet, cash flows, income statement) can't be published quarterly. I'm not saying you need to publish the pastors paycheck stub and personal accounts online but churches need to go out of their way to be transparent about their finances. It should be the law.

It is the law for mainline churches that deal with member's contributions. Even an independent church pastor can be charged for failing to account as the result of a complaint made to the police by church members. If I give money in the offering and I suspect that the money I am giving is being misappropriated, I can order the leadership to do an audit of the accounts, and if they refuse, I can put a complaint to the police and request a full investigation of the church's finances.

Monty Mananafolis · Aug 27, 2019

Oscarr said:
It is the law for mainline churches that deal with member's contributions. Even an independent church pastor can be charged for failing to account as the result of a complaint made to the police by church members. If I give money in the offering and I suspect that the money I am giving is being misappropriated, I can order the leadership to do an audit of the accounts, and if they refuse, I can put a complaint to the police and request a full investigation of the church's finances.

Yeah but it shouldn't have to come to that. I have yet to see a church post a GAAP compliant set of financial statements.

Presbyterian Continuist · Aug 28, 2019

Monty Mananafolis said:
Yeah but it shouldn't have to come to that. I have yet to see a church post a GAAP compliant set of financial statements.

The full set of financial statements is made available to all our members at our AGM along with the budget for the following year. It is a requirement for our church.

Tolworth John · Aug 28, 2019

I don't know the tax reg for the US, but here in the UK churches can register as a charity, but this means they must sumbit financial accounts to the tax office.
It does not remove the oppertunity for fraud, just makes it more difficult.

All Christians should be members of their church, regular in attending each week and in attending the church buisness meetings.
These should be held every year and the accounts reported on and a new budget set.
Large purchases should be itemised, prefferably discussed in a quarterly church meeting and mnember be able to ask question for either pubic answers or if convidential for private answers.

JIMINZ · Aug 28, 2019

It has always been my belief, that the Church in it's dealings should
"Abstain from all appearance of evil."

Which to me means, the evil in the minds of those outside of the Church, it isn't the Parishioners who raise the questions asked it the Non-Believers who are Antichrist who are.

Therefore, the solution to this dilemma is, the Church should not take any of the So called breaks the Government offers, even for Charity Organizations.

That way there isn't anything that can be misconstrued as underhanded by the Church. "No appearance of Evil" can be brought into question.

The other part of that equation is, if the So Called Church is not of God and is in it for the Money, that if the fail, go bankrupt, then good.

I firmly believe, if God wants a Church He will prosper it regardless, if He doesn't and it fails, that is His will also.

How many So Called Churches do you believe would fail if this was done?

A Church should say we really want a Separation of Church and State.

We do not want you to grant Divorces for Marriages Sanctioned In and By the Church, cannot put asunder something God has joined, The Government does not have that Right, any more than the Church has the Right to collect Taxes, or print Money to pay it's debts.

And we will abide by all the Laws Governing Business.....Deal?

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