ECCU Blog

It’s time again for the federal government to announce next year’s rates and limits for various federal programs. Some of those most applicable to ministries and their employees are:

•  The IRS limit for elective deferral (contribution) limit for employees who participate in 401(k) or 403(b) plans will increase from $17,000 to $17,500. Read the full announcement from the IRS.
•  The IRS limit for employees aged 50 and over who participate in 401(k) or 403(b) plans will remain unchanged at $5,500.
•  The federal per diem rates for reimbursing staff for lodging, meals, and incidentals are listed by city or zip code at the U.S. General Services Administration website.
•  Vehicle mileage reimbursement rates will continue at $0.55.5 per mile; the rate is expected to be revisited mid-2013.
•  The foreign earned income exclusion rises to $97,500 from $95,100.

 Notable tax changes that are set to expire or change in 2013 (unless they’re changed) include:

•  Employee contributions to FSAs (flexible spending accounts) will be limited to $2500 annually.
•  The reduced FICA payroll tax withholding of 4.2% on employees, which has been in effect for the past two years, is set to expire. The new rate will revert to 6.2%.
• Medicare tax rates are set to increase by 0.9% for all eligible earnings in January 2013 for higher income taxpayers.

 As always, consult the IRS website for up-to-date information and changes.

As you steward the financial resources entrusted to your ministry, one way to deter fraud is to establish internal controls around your checking account activities. Here are some best practices you should consider adopting:

Examine your bank statements quickly: When you opened your checking account with your bank, you entered an agreement (usually communicated through your account disclosures) that requires you to review your bank statements promptly and report losses as soon as possible. If you delay this review, fraudulent activity can go undetected. Even worse, it may escalate and you may become liable for the loss or future losses. Be sure you understand the requirements in your account agreement for timely statement review.

Use online banking features: Most online banking systems have a feature that allows you to set up account alerts that can be configured to inform you when checks clear and if balances fall below specific thresholds. Alerts are a strong tool in your early fraud detection arsenal.

Instill segregation of duties for check responsibilities: “Opportunity” is a common risk factor for internal fraud or embezzlement. You can minimize opportunities to commit fraud by implementing an internal control known as segregation of duties. An example would be assigning different people in your organization to prepare and reconcile checks. This way no transaction is handled by only one person from beginning to end.

Perform spot checks: Performing occasional surprise checks of the processes you have put in place shows you if those processes are performing as they should and that duties are indeed segregated.

Keep your check stock secure: You can keep check stock secure by restricting access to it. One good option is a locking cabinet that is accessible only to those individuals who are responsible for issuing checks. A cabinet with two locks is even better. The check reorder form should also be stored securely. Otherwise, a forger could easily reorder checks with the form and have them shipped to another location. It’s also a good idea to do occasional surprise inspections of your check inventory.

What internal controls do you have in place to protect the funds in your checking account?

This is the fourth in our series of email interviews with presenters for the upcoming 2012 Financial Forum for Ministries.

Gary Hoag serves as the Generosity Monk, providing spiritual and strategic counsel for denominations like the Evangelical Free Church of America and the Anglican Mission in theAmericas, and for ministries like Prison Fellowship and International Health Services. He will speak at each of the three 2012 California forums about your stewardship responsibilities as a leader and encouraging others to generously participate in your ministry despite tough times.

Here areGary’s responses to my questions.

MBG: How will your presentation help attendees better serve their ministries?

Gary: My prayer is that people go away informed and inspired to do their work in a way that is biblically faithful and financially fruitful. I will seek to accomplish this objective by presenting biblical principles, inviting interactive discussion, and sharing an amazing story about a ministry leader who is a good example for us all.

MBG: What are three important takeaways attendees will learn during your presentation?

Gary: Call it going the extra mile if you wish, but I want attendees to learn six important lessons from Scripture—three tips for practicing faithful stewardship in tough times and three tips for encouraging Christian generosity in tough times. It’s my clearest and best advice for leaders who want to be found faithful and fruitful                                                   

MBG: How will the format of the forum make it an even more valuable learning experience?

Gary: This session is content oriented, so a formal presentation and the detailed outline will contribute substantially to the experience. The opportunity to ask questions will help attendees firmly grasp the concepts presented.

Next up will be Pastor Brian Kluth with Maximum Generosity, who will be presenting on creative ways to move ministry forward even in the midst of tighter budgets and a challenging fundraising climate.                         

Follow this link to learn more and sign up for the financial forum in your area.

Okay, admit it. You work on your church’s administrative team and prefer that behind-the-scenes role to an up-front one. Well, for at least a day, you’ll have to accept a little public recognition. Thursday, October 18, is National Church Administration Day.

Sponsored by the National Association of Church Business Administration (NACBA), this day “is a service event of local chapters to share their knowledge of accurate, current information and resources to assist Ministers and Laity in congregations with the administration of their churches.”

To learn more about how this purpose will play out at the NACBA chapter in your area, visit their website.

This is the third in our series of email interviews with presenters for the upcoming 2012 Financial Forum for Ministries.

David Lee is a ministry development officer with ECCU. He will speak at all four forums about how to evaluate your ministry’s mission/money alignment and adjust spending to improve it. Here are David’s responses to my questions.

MBG: How will your presentation help attendees better serve their ministries?

David: Misaligned ministries, like cars with wheels out of alignment, can develop serious problems if the alignment problem is not corrected quickly. This presentation will challenge attendees to evaluate their current alignment and suggest possible solutions for issues of misalignment. The goal is to uncover not only the best practices of ministries that seem to have true alignment between their mission and money, but more importantly, to learn from mistakes ministries have made and identify the appropriate corrective action. 

MBG: What are three important takeaways attendees will learn during your presentation?

David: First, we’ll identify the risks and factors that contribute to misalignment of a ministry’s money and mission. Then we’ll talk about how to determine whether your ministry’s money is aligned with its mission. Finally, we’ll discuss methods for adjusting ministry budgets and spending priorities to improve alignment.                                            

MBG: How will the format of the forum make it an even more valuable learning experience?

David: In addition to focusing on the learning objectives I just listed, we’ll incorporate testimonials and examples from various ministries that have experienced misalignment of their mission and money.  

Next up will be Gary Hoag, the “Generosity Monk,” who will be presenting on executing your stewardship responsibilities as a leader and encouraging others to generously participate in your ministry despite tough times.

Follow this link to learn more and sign up for the financial forum in your area.