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ST PETER FINANCE POLICY Page 1
ST PETERS CONGREGATION’S FINANCE POLICY AND PROCEDURES
1. PURPOSE OF THE POLICY
1.1. This Finance policy is aimed at providing a regulatory framework for the control of income and expenditure in accordance with the ELCSA NT Church wide Constitution and Finance Policy. Through this policy, the Congregation commits itself to handle its finances in a way that is sustainable and consistent with the word of God. All finances within the Congregation belong to God’s mission and shall be used for God’s mission only. This Financial Policy is aimed at providing a regulatory framework for income and expenditure controls in terms of which the revenue structure of the congregation shall be determined.
1.1.1. Efficient, satisfactory and transparent administration of income and
expenditure shall occur for the benefit of the Congregation.
1.1.2. Financial viability and sustainability of the Congregation shall be obtained.
1.2. The policy also provides general statements of direction and purpose that allow users to exercise good judgment in the daily operation of the Congregation and promote the efficient use of resources in the Congregation. The Congregation further commits itself to comply with the generally accepted financial principles.
2. DEFINITIONS
2.1. All terms derived from ELCSA NT Constitution and applied in this policy shall
carry the same meaning as assigned to them by the constitution of ELCSA NT
unless otherwise determined.
2.2. Any noun in singular also denotes plurality of it, any reference to a particular
gender includes the opposite gender.
2.3. “Congregation” means St Peters Congregation ELCSA NT.
2.4. “Member” means:
All adults and children who have been received into the ELCSA NT through Baptism, Confirmation and /or application;
All members transferred from other Lutheran Congregations according to the regulations of the Congregation;
All persons baptised in the name of the Triune God and in a recognised
manner who have been admitted from other Denominations after having
ST PETER FINANCE POLICY Page 2
been instructed in the Lutheran doctrine and who have expressed their
adherence thereto.
“Contributing member” means a member who joins the Congregation as well as confirmed members who have been under parental care but have become economically active for the first time;
“Visiting Member” refers to a member who has formally announced his/her presence but has not formally declared himself/herself as a full/ permanent member of the St Peters Congregation.
“Economically Active Member” means a member who has a regular/ irregular source of income;
“Member in Good Standing” refers to a member who is compliant with the financial contributions clauses of this policy as applicable to him/her. The contrary hereof defines a Member-not-in good standing;
2.5. “Executive Committee” means the collective entity comprising of the Chairperson, Deputy Chairperson, Treasurer, Secretary, Deputy Secretary all duly elected by the Congregation and the Pastor in Charge;
2.6. “Annual General Meeting (AGM)” means a properly constituted gathering of all
congregants of St Peters once a year, or on special arrangement as the need may
be, with the purpose to consider the business of the Congregation and resolve
issues at hand;
2.7. “Council” means the Congregational Council ( CC) as elected by the St Peters in
accordance with the provisions of ELCSA NT Constitution;
2.8. “LMC” means Language Ministry Committees as defined by the Congregational
Council in terms of the Congregation’s schedule/ Constitution.
2.9. “Mandatory Contributions” means financial contributions as prescribed by the
Congregational Council and payable by members;
2.10. “Contracts” means contracts and/or Agreements concluded by the Council
and other parties with vested interest;
2.11. “External Auditing” means auditing or reviewing services rendered by the
external independent qualified auditor(s) as appointed by the AGM upon
request by the Council. Internal Auditing means auditing services rendered by any
member of ELCSA NT with requisite skill upon a request by the Council;
2.12. ‘’Operational Fund” means monies accumulated from contributions by
members for the purpose of general management of the Congregation;
2.13. “Service Fee” means a fee applicable to a member not in good standing who
seeks a service.
3 SCOPE OF POLICY
3.1. This policy governs all financial activities of the Congregation and all its
substructures with effect from 1 February 2018.
ST PETER FINANCE POLICY Page 3
3.2. All members of the Congregation are affected by the provision of this policy and
shall comply accordingly.
4. POLICY PRINCIPLES
4.1. The Council reserves the right to audit or cause to audit the books of all the
Ministries of the Congregation;
4.2. Assets accumulated in the name of the Congregation shall be used for the benefit
of the Congregation only;
4.3. The Treasurer and all authorized signatories shall consider budgetary approval as
a standing authorization by Council to execute financial expenditure as per
allocation. The Congregational Council shall from time to time determine the
expenditure fund limit to be exercised by the Congregational Office of St Peters.
The treasurer with the support of the LMC treasurers shall draw and present an
annual budget to the Congregational Council for approval and subsequent
ratification by the Congregation during the Annual General Meeting (AGM);
4.4. A user friendly process and reporting system without sacrificing the generally
accepted accounting principles shall be adopted.
4.5. Enhancement of financial growth and sustainability shall be promoted;
4.6. The Congregational Council shall establish an Internal Audit Committee and
mandate it with all matters related to internal audit.
4.7. Unplanned and/or emergency expenditure shall be fully motivated for by the
requester and considered by the finance committee and or Congregational Council;
4.8. Fruitless, wasteful and out of proportion expenditure shall be avoided to the best
ability of the Congregational Council.
4.9. This policy is subject to annual review by the CC subject to ratification by the
AGM.
ST PETER FINANCE POLICY Page 4
5. REVENUE STRUCTURE
5.1. Mandatory monetary contributions
5.1.1. An economically active member is required to contribute a prescribed
annual amount toward the Operational costs of the Congregation as
determined by the CC.
5.1.2. Members are required to make a minimum of R300 00 a month towards the
Congregation’s Operational costs to be reviewed annually by the CC.
5.1.3. Should an economically active member not in good standing require a
service, he/she shall be required to contribute a service fee equivalent to the
amount outstanding due by the member, for example if a member’s
contribution is outstanding by one month the service fee will be R300 , R600
for two months R900 for three months and so on.
5.1.4. There will be a three months waiting period for a new member or visiting
member before accessing services except burial services. In the event of a
burial service being required before the three months expire and before any
contributions are made, a new member/ visiting member will be required to
contribute a service fee of R900 (equivalent of three months
contribution).Should a member have already contributed one or two months,
a member will then contribute an amount equal to the outstanding month/s.
Any member may conclude a written arrangement with the Council
represented by a Coordinator of his/her LMC for instalment payment.
A non-economically active member is exonerated from all mandatory
contributions subject to the recognition of their exceptional condition by the
Council.
Members older than 65 years are exempted from all mandatory contributions
but are expected to make if possible an annual pledge to the best of their
capabilities.
5.1.5. A member who suspended his/her membership due to unavoidable
circumstances e.g. family relocation or related commitments or loss of
employment shall continue where he/she left off.
5.2. OTHER CONTRIBUTIONS
5.2.1. Members are encouraged to participate in contributing towards all the
activities of the congregation and of their respective LMCs.
5.2.2. LMCs are at liberty to augment their contribution to all congregational
events by way of fund raising projects that are approved by the Council;
ST PETER FINANCE POLICY Page 5
5.2.3. LMCs and Forums are at liberty to determine their sources of income to
finance their activities and carry out projects for the benefit of the
Congregation.
5.2.4. All Fund raising projects will be subject to approval by the Congregational
Council’s Fundraising sub-committee.
6. PLEDGES
A pledge is done when a member commits to give a monthly/annual amount to the Congregation, this derived from taking time to make a prayerful decision, as to how much one wishes to give.
6.1. Members are encouraged to make pledges to the Congregation regularly.
6.2. Members are encouraged to make pledges in cash or in kind in recognition of
whatever blessings they might have received from the Almighty.
All contributions may be made by:
Bank Stop or Debit Order - to be arranged by Member.
Electronic Funds Transfer. (EFT)
Cash in the numbered envelopes provided, to be placed on the Offertory collection during the congregation service.
7. PROCEDURE FOR THE ADMINISTRATION OF INCOME
7.1. The CC Treasurer Shall maintain a close working relationship with all LMC and
Ministries treasurers to ensure consistency and financial discipline among all
structures
7.2. The Treasurer shall play a leading role in appointing and directing volunteers who
count monies collected during congregation services.
7.3. The Treasurer shall take full banking responsibility for the counted cash.
7.4. The responsibility in 7.3 above may be delegated in writing to nominated officials
in the Congregational office.
7.5. The CC Treasurers in consultation with the congregational office shall set out
procedure for the LMCs and Ministries access to funds in their respective ledger
accounts at all material times.
7.5.1. All Forums and ministries shall manage their finances and keep a ledger
account of not less than R1000.00 in the Congregation’s bank account.
ST PETER FINANCE POLICY Page 6
7.5.2. A members deposit contributions into a specified bank account and submit
proof of payment to the LMC Treasurer or Congregation’s Office.
7.5.3. LMC Treasurers will receive monthly income reports as acknowledgement
of contributions made by the members.
7.5.4. LMC Treasurer will use the monthly schedule of contributions to provide
feedback to members at various levels of the LMC.
8. ADMINISTRATION OF EXPENSES
8.1. Operational expenses
8.1.1. These include routine expenses such as office administration requisites,
cleaning material, water, telephones, electricity, rates and taxes, subsistence
and travelling, general repairs and maintenance, etc, and are covered by a
budgetary allocation. No quotations shall be required.
8.1.2. A comprehensive motivation shall be submitted to full council for advance
approval of any anticipated over-expenditure
8.1.3. Cross-transfer of budget allocation from one expense account to another is
permissible only within budget estimates and upon approval by executive
committee and the ratification by the council.
8.1.4. Official travelling and accommodation require three quotations at all times.in
the event of three quotations not being possible, a comprehensive motivation
to that effect shall be submitted.
8.1.5. Travelling by own car for official Congregational errands shall be
reimbursed at prescribed rates per kilometre but limited to rates prescribed
by SARS. Rates will be subjected to annual review.
8.1.6. Accommodation on official trips shall be financed by the Council only in
institutions rated three stars or less, and travelling for that purpose exceeds
300 kilometres one way.
8.1.7. All activities of the substructures shall be financed only if they have been
approved by the Council during budgeting process, otherwise a detailed
motivation shall be submitted by the concerned party.
ST PETER FINANCE POLICY Page 7
8.2. Capital expenditure
8.2.1. A comprehensive motivation supported by budget allocation and three
quotations shall be presented to the council for all capital expenses.
8.2.2. The budget provides for all foreseen expenditure but cost-saving
opportunities are always available and should be considered through cost
comparison mechanisms, seeking alternative suppliers and a thorough
assessment of the need for each and every expenditure at a point in time. A
budget provision is not a must-spent item.
8.2.3. The normal budgeting procedure that includes but is not limited to the
consideration of zero based, historical facts, mechanical and other forecast
based on both patterns of usage and inflation indices shall be applied.
8.2.4. Budget parameters shall be presented by the council to the finance
committee and shall be factored in together with inputs by wards, leagues
and associations.
9. MANDATES
9.1. The Council shall mandate not more than five Council Members to be cheque
account signatories and mandate the bank on signature arrangements to be
honoured by it.
9.2. Bank signatories to authorise all operational expenditure within the budgetary
provisions.
9.3. The Council to approve/disapprove all capital expenditure on the basis of the
motivation presented.
9.4. Over-expenditure is foreseeable and must be motivated for to the Council well in
advance.
10. FINANCIAL REPORTS AND SUBMISSIONS
10.1. Treasurer compiles a monthly financial report and submits it to the Council.
10.2. Treasurer shall compile Annual Financial Statements in consultation with the
Finance Committee, and submit same to the Executive Committee, the Council
and the AGM.
ST PETER FINANCE POLICY Page 8
10.3. The annual financial report shall comprise of the following:-
10.3.1. Cash flow statement
10.3.2. Income statement with notes
10.3.3. Balance sheet with notes
10.3.4. Change of Equity statement
10.3.5. Debtors statement-Age analysis with a progress report on collections
10.3.6. Creditors statement with notes
10.3.7. Finance Committee submits Audited Financial Reports to the Council for
approval and presentation to the Annual General Meeting of the
Congregation.
11. AMENDMENT OF THE POLICY
The policy will be amended annually.
ST PETER FINANCE POLICY Page 9
ANNEXURES TO THE POLICY
Annexure A
RESPONSIBILITIES OF THE FINANCE COMMITTEE
1. Manage the budget compilation process;
2. Recommend fund raising projects and implement same upon approval by the Council;
3. Advise the Council on options available for investing surplus funds; 4. Provide the Council with the quarterly financial reports and the Executive
Committee with the monthly overview of the financial situation.
5. Provide Congregants with a six months reconciliation of their mandatory contributions in July and January of each year;
6. Advise the Council on all matters of finance in nature and implications of specific
decisions under consideration.
7. Recommend to the Council the mandatory contributions and collection procedures for such contributions and pledges;
8. Develop and recommend write-off policy for irrecoverable assets and
uneconomical assets.
9. Arrange and execute hand-over of financial records and assets in the event of the relevant authority changing hands;
10. Ensure proper and safe keeping of accounting records for the period of ten years
and update the archives annually.
11. Develop and implement policy on contracts for leasing/renting
ST PETER FINANCE POLICY Page 10
Annexure B
RESPONSIBILITIES OF THE INTERNAL AUDIT COMMITTEE From an internal audit oversight perspective, the Committee is primarily responsible for:-
considering and monitoring the independence of the external auditors and the appropriate rotation of the lead audit partner and to make recommendations to the CC/AGM on the appointment and dismissal of the external auditor;
overseeing the effectiveness of the Congregations’ internal control systems, ensuring that they are designed in response to identified key business and control risks, and have been effective throughout the year;
reviewing the scope and effectiveness of the external audit functions; ensuring that adequate books and records have been maintained; monitoring proposed changes in accounting policies; considering the accounting and taxation implications of major transactions; reviewing and reporting on compliance with IFRS, King III where applicable
requirements; reviewing of managements’ evaluation of the Group’s going concern assertion
remains appropriate; reviewing the interim and annual financial statements to ensure that they give fair
presentation, consistent with information known to the Committee, before submission to the Board;
considering the appropriateness of the expertise and experience of the Treasurer on an annual basis;
determine the fees to be paid to the auditor and the auditor’s terms of engagement;
ensure that the appointment of the auditor complies with the provisions of the Schedule and any other legislation relating to the appointment of auditors;
determine the nature and extent of any non-audit services which the auditor may provide to the Congregation;
pre-approve any proposed agreement with the auditor for the provision of non-audit services to the Congregation;
receive and deal appropriately with any concerns or complaints relating to the accounting practices and internal audit of the Congregation, the content or auditing of the financial statements or any other related matter;
make submissions to the CC on any matter concerning the Congregation’s accounting policies, financial controls, records and reporting; and to perform other functions as determined by the CC, including development and implementation of policy and a plan for a systematic and disciplined approach to evaluate and improve effectiveness of risk management control and governance.
ST PETER FINANCE POLICY Page 11
Annexure C
FINANCIAL DOCUMENTS
The following documents are prerequisites for a generally accepted accounting process;
1. Receipt slip
2. Proof of payment
3. Purchase/Payment requisition
4. Bank deposit slip
5. Trial balance
6. Bank account reconciliation statement
7. Bank statement
8. Cash flow statement
9. Income statement
10. Balance sheet (Financial Status)
11. Assets register
12. Cheque book
13. Specimen signature as per current bank signatory mandate.
14. Motivation for capital expenditure
15. Motivation for expenditure outside budgetary provision.
16. Monthly schedule of contributions
17. Remittance advice
18. Cheque Requisition
19. Invoices/Statements
20. Quotations
ST PETER FINANCE POLICY Page 12
Annexure D
PROCEDURE OF CLARIFY MEMBERSHIP STATUS OF THE ST PETERS CONGREGATION
1. Members as per definition of membership in the Finance Policy continue to be members.
2. Where a member is on the records, however has neither paid membership contributions, nor has been in services, nor has shown no interest, or where post sent to them is returned with “addressee unknown” , the following steps are to be taken:
a. Where a phone number is available, telephone contact is to be attempted. If after being contacted the person expresses interest in continuing to belong to the St Peter congregation, then no 1above applies. Where the person indicates lack of interest in continuing membership, or indicates to having joined another congregation the no.3.applies. A note on the telephone conversation is to be made.
b. Where a phone number does not exist, or the phone is not answered, or answered by different people, a letter (e-mail or post) is to be written, requesting the persons to indicate whether they are interested in continuing membership. Where an answer is received within a month indicating interest, 1. Applies. Where no answer is received, or the letter is returned addressee unknown, 2. Applies. A note on the correspondence is to be made, and the correspondence is to be kept.
3. Where people have indicated that they do not have interest in continuing membership, their names, together with a note on how this information was obtained, is to be presented to Congregational Council. The CC will then decide to remove these people from the membership of the Congregation.
4. A letter and certificate of removal is to be sent to the last known address of the persons removed.
N. B. Any member requiring a service should start first by informing the coordinator at the Pastoral Redemptive Community (PRC) they belong to. Pastors will not render any service required by a member without the recommendation of the PRC coordinator.