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Financial Procedures

Responsibilities and Procedures
Finance Committee and Treasurer
Approved May 5, 2007
Updated February 8, 2010

Finance Committee Responsibilities


1. Oversees the Meeting's financial resources and procedures

2. Arranges for regular reports to the Business Meeting on the Meeting's finances

3. Proposes the new annual budget at the November Business Meeting

4. Oversees the work of the Treasurer and Collection Team

5. Informs members and attenders about making donations—for example, where to leave cash, where to mail checks, how to earmark contributions, how to initiate automatic bank payments, and which contributions are tax-deductible (see “Deductible Contributions” below)

6. Insures that only those contributions that meet IRS requirements for tax deductions are acknowledged by the Meeting as tax deductible (see “Deductible Contributions” below)

7. Arranges for annual internal audits of the Treasurer’s and the Collection Team’s records and the Meeting’s financial procedures (and external audits if necessary)

8. Arranges for preparation of the annual tax return, if required.

9. Meetings of the Finance Committee will be held only as necessary.

  1. Minutes of each meeting will be produced and kept by the clerk of the Finance Committee.

  2. A report based on the minutes will be given to the subsequent Business Meeting, with requests for action as necessary.

10. Structure of Finance Committee

  1. The Finance Committee will consist of the Treasurer and at least two other members.

  2. A member, not the Treasurer, will serve as clerk of the committee.


Treasurer Responsibilities

1. Prepares monthly financial reports prior to Business Meeting for the Finance Committee to review; provides brief monthly reports to the Business Meeting; makes the final annual report to the January Business Meeting.

2. Writes all checks and pays all Meeting bills after determining that the funds are budgeted and the payment has been authorized; (if the Treasurer will be out of town or otherwise unable to write checks within 30 days, the Treasurer will arrange with another signer to pay bills, using checks specifically provided by the Treasurer for this purpose)

3. Refers requests for scholarship requests and other activities of Quaker concern to Clerk of Meeting and/or Convener of Ministry and Oversight, and writes checks as approved.

4. Maintains the liability and property insurance for the Meeting (the safe deposit box with records for the Meeting House is now kept by the Trustees).

5. Maintains the Meeting's financial records (bank account records, invoices, and other expense receipts); maintains a chart of accounts; regularly backs up any electronic files of financial records (all older records should be stored as directed by the Archivist in case of an IRS audit)

6. With the assistance of the internal auditors, closes out by March 15 the expenditure and revenue accounts for the previous fiscal year

7. Manages the cash held by the Meeting, insuring that there is sufficient cash available in the checking account to pay bills, and that excess cash is kept in interest-bearing accounts

8. Maintains the accounts for all restricted Funds, and writes disbursement checks on request from their respective oversight committees or the Business Meeting

9. Obtains a Form W-9 from each unincorporated contractor providing services likely to cost over $600 in the fiscal year and submits a Form 1099-MISC for any contractor paid over $600. (Our EIN is 85-0413976.)


Collection Team Responsibilities

The Finance Committee designates persons – preferably members of the committee -- to be members of the Collection Team. Typically a member handles collections for a month or two. When the currently-serving member of the Collection Team is unable to be at Meeting, s/he should notify another team member in advance to make the collection. The Collection Team:

1. Manages all aspects of collecting and depositing contributions to the Meeting and maintaining the weekly collection records

2. Records cash and check donations collected at Meeting each Sunday, including Guest Apartment and Meeting House use receipts, in a Weekly Collection Record showing the amount of donations and receipts by purpose (i. e., unrestricted or restricted categories, such as Sufferings) and fund; all non-earmarked donations should go to the general fund, even if they come from people who are staying in the guest apartment. Only their rent, or an earmarked donation from them for the maintenance fund, should go to it

3. Checks from donors are recorded on the Weekly Collection Record by the check signer’s name and purpose of the donation

4. Cash from identified donors is recorded by the donor’s name on the Weekly Collection Record

5. A Collection Team member signs the Weekly Collection Record

6. The Weekly Collection Record is sent to the Donation Recorder, who maintains them until the annual audit has been conducted

7. The bank deposit is prepared and made ASAP; the deposit may be mailed if no cash is involved

8. All money received or mailed during December should be deposited, recorded, and reported to the Treasurer by January 15 to facilitate the year end closing of accounts

9. Donations received before January 1 – including checks mailed before January 1 but received after the new year begins -- are recorded as being made by the end of the year; donations received at the Meeting House or mailed on or after January 1 are recorded as made in the new year (this is an IRS requirement for acknowledgments)


Donation Recorder Responsibilities (currently handled by the treasurer)

The Finance Committee designates one person—preferably a member of the committee—to be the Donation Recorder. At present the Treasurer functions as the Donation Recorder, as the records are kept in the CCS program.

1. Using the Weekly Collection Record, records all donations in the CCS program

2. (If the Donation Recorder and Treasurer are not the same person) Notifies the treasurer of the amount of the bank deposit and the amounts allocated to each fund or purpose as recorded on the Weekly Donation Record

3. Provides an annual report to each contributor by email unless the contributor requests a paper acknowledgment (the IRS accepts email acknowledgments and requires documentation only for contributions over $250, but the Meeting has decided to acknowledge all identifiable donations)

4. Maintains copies of the Weekly Collection Record until the annual audit has been conducted

 

Business Meeting Responsibilities

Authorize all Meeting bank accounts and signers. Treasurer, Clerk of Finance and Clerk of Meeting were designated as signers at the Business Meeting of October 15, 2006, as well as the immediate past Treasurer.

Timeline for Finance Committee and the Treasurer:

1. Reports

a. Treasurer prepares Quarterly Reports for the quarter ending in March, June, September, December

b. Treasurer and Finance Committee prepare End of the Year Report and closing of the years’ books in January

c. Early in the new year the Finance Committee prepares a Financial State of the Meeting Summary, detailing the commitments approved by the Meeting for both General and Maintenance Funds for the coming year and reminding members/attenders of the need to come up with those funds.

2. Budget

a. Finance Committee contacts committees with budgets in early September for budget requests for the next fiscal year

b. Finance Committee receives recommendations of Good Works Committee for changes, additions and deletions to recipient groups in the Good Works budget. Response needed before October Finance Committee meeting.

c. Final Review by Finance Committee at October committee meeting (Former Treasurer invited to participate as needed).

d. 1st reading at November Business Meeting

e. 2nd reading at December Business Meeting

3. Tax matters

a. Letter of acknowledgment and thanks sent by January 31 to all contributors to Meeting

b. Submit by January 31 a Form 1099-MISC for any contractor paid over $600

4. Annual Audit

a. Assemble audit committee in January

b. Review books in February

c. Final report of audit committee to Finance in March

5. Contributions to Quaker and Non Quaker Organizations

a. Overall total determined in budget

b. Decision by Business Meeting on recipients and amounts as part of budget

c. Checks written quarterly as Finance Committee determines funds are available.

 

Financial Procedures and Records

Overview

The Meeting uses the calendar year as its fiscal year. It uses cash basis accounting and uses the CCS software program for bookkeeping.

All receipts are credited to the fiscal year in which they are received and recorded by the Collection Team, no matter when they are deposited (some end-of-year donations may arrive after December 31 -- if they are dated December 31 or earlier, they should be credited to that year).

In most cases, disbursements should be charged in the year they are made. Some significant disbursements for purchases made near the close of the year but paid in the following year may need to be charged back to the previous year to properly represent expenditures to the business meeting. This may need to be noted in reports.

All disbursements are made by check except for the two petty cash funds managed by the Resident. No presigned checks or checks made out to “cash” are allowed.

Meeting receipts are initially recorded in the Weekly Collection Record (maintained by the Collection Team).

Checking and Money Market Accounts - all Meeting funds (including restricted funds) are kept in checking and money market accounts (currently at Guadalupe Credit Union). All accounts require only one signature to withdraw funds. Authorized signers are designated by the Business Meeting as required to insure that the Meeting’s bills may be paid when the treasurer is unavailable.

Cash Management – The treasurer maintains sufficient cash in the checking account to cover anticipated expenses. The remaining cash is kept in MM accounts or CDs.

Restricted Funds – The Meeting has established a number of funds for specific purposes (see the Chart of Meeting Accounts). These restricted funds are assumed to have an indefinite life, so the balance in a fund at the end of the fiscal year is carried over into the new fiscal year.

Disbursements and Invoices - All payments are normally made against a written request for reimbursement invoice, if available. Invoices are filed by category and by year, with the date noted on the invoice. Most checks are initiated via the GCU on line billpay. The PNM, NM Gas, and City of Santa Fe utility bills are paid by automatic drafts from the GCU checking account initiated each month by PNM, NM Gas, and the City. See also “Open Accounts” and “Petty Cash.”

Open Accounts - Certain persons make purchases from these accounts and the Treasurer receives the monthly bills directly from the vendor (currently the only open account is at Paper Tiger for printing).

Petty Cash - The treasurer provides the resident with a check (currently $180) at the beginning of each quarter which is used as a petty cash fund to cover ongoing expenses and supplies for the Meeting (beverages, paper, cleaning supplies and other non-specified items). The resident maintains a record of the actual expenses during the quarter. The treasurer also provides the resident with a petty cash fund of $50 to provide emergency assistance to someone who may need immediate help if other resources for help are not available. The resident maintains a record of the disbursements from the fund and requests replenishment from the treasurer as required.

Special accounts - The Meeting advertises only in Dex, the official Qwest “Yellow Pages” directory. The Meeting has two Friends Journal classified ads: a listing in the meetings directory (paid annually) and a listing for the guest apartment (paid every 6 months).

Annual Tax Return - As a church we are not required to file a Form 990 tax return (see Publication 1828 (Rev. 7-02), Tax Guide for Churches and Religious Organizations). However, if the Meeting has more than $1,000 of “unrelated business income,” we must file a 990T. According to the IRS definition, the money we receive for the Guest Apartment and use of Meeting House is not considered unrelated income (see “Sec. 513. Unrelated trade or business” of IRS rules). The IRS advises that tax-related records should be kept for “at least four years” after filing the tax return.

The IRS requires that we maintain income, expense, and payroll records for at least four years.

Insurance – The Meeting has a church property and liability policy with Church Mutual.

Investments – The Meeting currently has no investments.

Returned checks -- The Treasurer will request reimbursement from the check writer if our bank charges a fee, but if the person does not respond, the Meeting will absorb the cost.

The Meeting is a NM nonprofit corporation, but has not sought a 501(c)(3) determination from the IRS because as a church we have an automatic 501(c)(3) status. The Meeting was issued a NM Tax ID Number (2-188233-009). Our federal EIN is 85-0413976.

 

Purchasing and Reimbursement

1. Each committee with a budget will designate a person to authorize expenditures and notify the Treasurer (there could be more than one person if the committee believes they need that flexibility, but the committee must let the Treasurer know who has the authority). The authorized person may consult the treasurer to determine whether a purchase might be tax-exempt (only "tangible personal property" is eligible for tax exemption, neither services nor construction materials are eligible; the state has provided tax exemption certificates to the Meeting -- see the New Mexico Taxation and Revenue pamphlet “501(c)(3) Nonprofit Groups & New Mexico’s Gross Receipts Tax” for information on how they can be used; the Meeting is incorporated but has not applied to the IRS for a 501(c)(3) determination since we have automatic status as a church).

2. To get a reimbursement or have an invoice paid, the authorized person would give the Treasurer a note showing to whom to make out the check, where to mail it, and what budget category to charge. The authorized person would either attach an invoice or state that an invoice is not available (submitting the request without an invoice should be a rare exception). .

3. If the vendor mails the invoice, it should be sent to the attention of the committee authorizer, so we will know who to give the invoice to.

4. When the purchase is made on an open account -- such as for printing -- the authorized person should immediately send the Treasurer the payment request with the information he'll need to pay the monthly invoice. (The Treasurer may accept an email message that has the required information.)

5. The Treasurer will have two weeks after receiving a payment authorization to write and mail a check. Persons who need reimbursements or payments more quickly -- such as a deposit for contracted services -- would need to arrange it with the Treasurer in advance. However, advance arrangements shouldn't become routine, as special arrangements increase the burden on the Treasurer.

 

Deductible Contributions

IRS Publication 526 describes deductible and non-deductible contributions, as well as requirements for documentation.

 

Meeting Policy on Tax-Deductible Solicitations

The IRS provides this advice on contributions, which applies to any Meeting benevolence project: ”You cannot deduct contributions to specific individuals, including:

Contributions to individuals who are needy or worthy. This includes contributions to a qualified organization if you indicate that your contribution is for a specific person. But you can deduct a contribution that you give to a qualified organization that in turn helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. Example: You can deduct contributions earmarked for flood relief, hurricane relief, or other disaster relief to a qualified organization. However, you cannot deduct contributions earmarked for relief of a particular individual or family.”

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