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Church Groups and accounting practices

by Brett
(Missouri)

I just need some straightforward advice. I am a member of a small church. For decades each group (ladies auxiliary,mens club, youth group,stitchers, etc) have had their own bank accounts and handled their own finances, all while using the churches id number on these accounts.

It has come to my attention that while these groups take in contributions and do fundraisers, that the accounting for these funds is never reconciled with the church and never included on church financial statements or reported to the irs.

It seems to me that if individuals who donate to these different missions were to claim a deduction on their personal taxes, but the churches reporting is different that this could lead to serious complications.

I guess my question is this-is the church responsible for reporting this money? It seems to me that regardless of how we operate internally that all financial operation of the church needs to be reconciled at the end of the year.

Thanks and God Bless.

Know the answer? Face the same situation? Please post your answer or comment by using the "comment" link below. Thank you!




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Church Groups and accounting practices

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Aug 20, 2010
Rating
starstarstarstarstar 		Internal Controls
by: Vickey

Your right, Brett, everything should flow the church records. I would also be concerned with internal controls not being in place with each group having their own bank accounts and handling their own finances.

I am not a big fan of having a lot of different bank accounts as they can be a nightmare to reconcile and account for.


Sep 29, 2010
Rating
starstarstarstarstar 		Nothing Separate
by: KJ

There should be no separate ministry bank accounts. Various ministries and events can be given credit for raising money, but the money itself should be recorded on the churches books. Some ministries get territorial and pile up huge amounts of money from dues and other things. They often end up spending that money on things have nothing to do with ministry. If the CHURCH, wants to keep the money available for the individual ministry to use throughout the year, thats fine, but the ministry should go through the church to get that money.

Church member DONATIONS should be recorded so that each members gets credit on their yearend statement. But money that member SPEND on various items and events, should NOT be credited to the individuals members. When they purchase something, that IS NOT a donation, they are getting something for their money, and should get no tax benefit.

Church do not have to report to the IRS.

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