It may be a new year, but there are some required tasks that must be attended to ASAP! This column is devoted to administrative details some churches overlook that can impact their property, ministers, church board of directors, members and others.
First and foremost is the church’s annual budget. Unless your church has, for some reason, adopted a fiscal year other than the calendar year, failure to formally adopt a budget for 2020 prior to January 1 means the church is operating without proper authority to expend funds. Too many churches fall into this category, and some don’t even adopt a written budget ... they simply exist by trying to spend less than their monthly revenue. This is not good stewardship, and does nothing to set a course for the church’s Kingdom work. There should also be a review of 2019 accounting.
Second, if any ministers are receiving some or all of their annual compensation as housing allowance, the church board or body must approve a resolution permitting this — it cannot be done retroactively later in the year. Formal approval of the budget with a line item for housing allowance for each minister may substitute for a resolution, but there should still be recognition in the church board’s January meeting minutes. Additionally, ministers need to let the church know in writing how much compensation should be paid as housing allowance — the church does not tell the pastor how much housing allowance it will permit.
If your church board or body does not hold a regular business meeting in January, as it should, it may be impairing each minister’s ability to claim a housing allowance, raising their income tax bill.
Third, it’s time to verify the church has applied for, received, renewed or revised applicable property tax exemptions. County assessors usually mail a postcard requesting notification of any change affecting existing exemptions, and churches that have had an adverse change but fail to notify the assessor are at risk of exemptions later being denied or revoked, possibly resulting in added penalties and interest. Depending on the church, the responsibility for this probably rests with the trustees.
Next, it may be time to review the church’s Policies and Procedures Manual for old or missing policies, and to make sure all policies are soundly written. The manual is a “living document” that requires regular maintenance every couple of years. Someone or some group — church administrator or ministry team — should have control of the manual while a separate group — church board or council — should exercise administrative oversight in order to maintain proper checks and balance.
Finally, church bylaws may be due for review and updating. This primary governing instrument also is a “living document” that must be nurtured. If the church’s last bylaws review was more than two years ago, you’re overdue. Start the process by e-mailing a copy to email@example.com for expert review and commentary before enlisting a bylaws committee; e-mail other compliance and human resources questions as well.