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Financial
Policies for Parishes
Diocese of Palm Beach
Parish Finance Councils
Introduction: Since 1983, the Code of Canon Law (c. 537)
requires that “each parish is to have a finance council which is
regulated by universal law as well as by norms issued by the
diocesan bishop; in this council the Christian faithful,
selected according to the same norms, aid the pastor in the
administration of parish goods.” This canon makes it clear,
however, that the finance council does not substitute for the
pastor as the chief administrator and legal representative of
the parish’s goods and refers to canon 532 which charges the
pastor to care for the parish’s goods and to represent the
parish in all juridic affairs.
Application: The finance council serves in a critical
advisory and consultative role to the pastor in all business
affairs of the parish. It should be memorialized at the parish
level through a charter which addresses matters such as its
purpose, membership, term of office and vacancies, officers and
duties, meetings and voting. An active finance council is an
important goal with meetings to be held regularly, at least on a
quarterly basis. A record of meetings should be maintained on
file documenting the main topics discussed and any votes taken.
Responsible financial management requires that the finance
council, in concert with the pastor, maintain vigorous oversight
of the financial affairs of the parish. Together, they should
regularly oversee the accounting function and its work product
including budgets and financial statements reflecting income and
expenses, parish savings and indebtedness. They should regularly
evaluate operating and capital requirements, as well as assess
the condition of the physical plant and plan for improvements.
Internal controls, which are vital to the effective and
efficient operations of the parish, normally rely to a large
extent on the adequate separation of accounting duties among
staff personnel. However, with limited staff or an accounting
staff of one, such separation may be difficult to achieve. Under
these circumstances, the pastor and finance council can
compensate for such a deficiency through diligent oversight.
Finally, the finance council should assist the pastor in the
regular reporting of the parish financial results. A
comprehensive report is an important element of accountability
and transparency and is required to be submitted to the Pastoral
Center on a quarterly basis and to the parish community as a
whole at least annually.
Diocese of Palm Beach
Entity Audit Program
Introduction: In late 2004, Bishop established the
“Sub-Committee on Entity Audits” and charged the members with
examining the existing policy of the diocese and making
appropriate recommendations. In January of 2005, the
Sub-Committee reported to the Presbyteral Council as follows:
We all share a fiduciary responsibility to see that the
financial resources made available to us are used in a manner
consistent with our mission and respecting the donor’s intent.
In this regard, accountability and transparency are necessary to
evidence the discharge of these responsibilities, maintain our
credibility as stewards and instill confidence on the part of
the donor. It is in this spirit that the following
recommendations are made:
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The existing policy of financial audits only with a change
of pastor is no longer adequate. Our finance councils,
parish communities and donors seek the assurance of
regularly scheduled audits with reports which are available
to interested parties.
Recommendation: Every diocesan entity be subject to a
form of audit/review on a biennial basis (every two years).
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Credibility of the work product can be significantly
enhanced with the independence of an outside accounting firm
as opposed to diocesan internal audit.
Recommendation: The biennial audit/review be performed by
an independent accounting firm with a report to the
applicable Pastor, President and Bishop (and/or his
designees).
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Fees associated with this audit/review have been estimated
for a stand-alone entity (church or high school) and for
parishes with a parochial school.
Recommendation: All fees be paid by the entity subject to
audit/review.
The report and its recommendations were accepted by the
Presbyteral Council and upon further consultation with the
College of Consultors and Diocesan Finance Council, Bishop
approved the recommendations. Therefore, as of the new fiscal
year beginning July 1, 2005 it became the policy of the Diocese
of Palm Beach to conduct audits as set forth above.
Application: It is important to distinguish these entity
audits from true independent audits – the purpose of which is
the expression of an opinion on the entity’s financial
statements. These are “agreed-upon procedures” engagements which
focus on the adequacy of internal controls and adherence to
policies and procedures. They are largely compliance oriented
and examine the control environment which generates the
applicable financial statements. Responsibilities are as
follows:
Pastor Responsibilities:
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Initiate planning with parish finance council, parish
finance staff and outside accountants to ensure that
engagement is initiated and completed within assigned year;
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Select accounting firm from approved list and coordinate
with firm and parish staff for a mutually convenient date to
begin engagement during the year. Financial statements to be
used may be end of fiscal year or any calendar quarter.
(Example: For required audit cycle year ended 6/30/06, the
financials for 6/30/05, 9/30/05, 12/31/05 or 3/31/06 may be
utilized;
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Support the outside accountants during the engagement
providing whatever information (verbal and written) is
required;
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Provide outside accountants with standard “representation
letter” at the completion of the engagement evidencing full
cooperation with all elements of the uniform audit program;
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Fully consider all aspects of the accountants report and, in
conjunction with parish finance council, respond in writing
to each of the comments and recommendations. Parish
responses are to be forwarded to the Diocesan Finance
Office;
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Insure that outside accountants fees (as previously
estimated) are paid in full.
Bookkeeper Responsibilities:
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Assist Pastor in the planning and scheduling of the
engagement;
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Assemble all required documentation in advance of the
arrival of outside accountants;
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Notify the Diocesan Finance Office of the scheduled start
date and ultimate completion date of the engagement;
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Support the outside accountants during the engagement
providing whatever information (verbal and written) is
required;
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Assist Pastor and parish finance council in responding to
accountant’s report.
Diocesan Finance Office Responsibilities:
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Develop “Entity Audit Cycle” schedule;
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Identify, negotiate with and select outside accounting
firms;
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Develop “Entity Engagement Program” for churches and schools
and provide to entities and outside accounting firms;
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Support entities in the planning and scheduling of
engagements;
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Provide outside accountants with current account information
pertaining to entity savings and loan accounts, fixed
assets, pension, health and property and liability
information for each entity prior to audit;
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Monitor entity audit cycle progress throughout the year;
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Receive all outside accountant reports and applicable parish
responses, log-in, review and follow-up on unresolved
problem areas;
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Provide accountants reports and entity responses to Audit
Committee of the Diocesan Finance Council;
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Provide Bishop and Diocesan Finance Council with appropriate
summaries of entity audits.
Diocese of Palm Beach
Parish Procedures for the Collection
and Count of Weekly Offertory
Introduction:
The parish procedures for the collection and count of weekly offertory
promulgated as policy November 2003 have been revised October 2009. The following updated procedures
incorporate additional internal controls designed to enhance the integrity of the collection and count
process in the diocesan parishes.
The primary controls required by this update are as follows:
- Sequentially numbered, tamper resistant bags must be used to hold offertory collections.
- Offertory collections must be in the custody of at least two independent persons at all times.
- Each collection must be accounted for on the parish books in its entirety and in accordance with the intent of the donors.
Application:
Responsible stewardship demands that the weekly gifts from the faithful be
given appropriate consideration as the parish’s most vulnerable financial asset. Weekly offertory,
which represents the monetary lifeblood of the parish community, must be properly safeguarded, counted,
deposited and recorded.
A system of internal control that emphasizes honest and capable staff, as well as a clear segregation of duties,
is essential. This segregation should preclude any one individual from performing all aspects of the function.
Fundamentally, custody of assets must be separated from the bookkeeping for those assets. Each of the parties in
the weekly offertory process should play a clearly defined role.
Generally, the greater the number of individuals involved, the stronger the internal control, and strong internal control translates into greater confidence within the parish community.
Overview of Roles:
Pastor: While the parish pastor may play any role in the collection and count of weekly offertory,
his primary function is one of oversight. He should periodically observe the collection process and the performance
of ushers. The physical control and safety of the offertory prior to count is critical, with only the pastor and his
designee having safe combinations or lock keys.
Periodic observation of the count team is most beneficial, as is an occasional comparison of tally sheet totals
to deposit totals to recording of offertory on the parish books. The pastor’s involvement in the process should
not be routine, but rather variable and unpredictable.
Parochial Vicar: The parish pastor may delegate some or all of his responsibilities for the weekly
offertory to the parochial vicar. Acting as a team, they may increase their observation and coverage of the
process.
Ushers: The collection, bagging and initial security of the offertory is a critical responsibility of
the usher staff. Ushers must work in teams when handling collection proceeds. No one individual should be
permitted to have sole custody of the offertory without the opportunity for observation by an independent party.
Ushers should not have safe combinations or lock keys. Their responsibility ends when the offertory is properly
secured.
Count Team: In addition to the obvious tasks of examining and opening the tamper resistant bags,
sorting collections, counting money, accumulating checks and preparing the deposit, a team member must
complete the weekly tally sheet for control, recording and audit trail purposes.
Each count team should include at least three unrelated people, and teams and/or members should be rotated
whenever possible. Longevity in the same position is not desirable.
Bookkeeper: Ideally, the role of the bookkeeper is limited to keeping track of the sequentially numbered
collection bags, and recording the detail deposit information in the parish records. The source documents are the
receipted deposit slips and the detailed tally sheet. While the bookkeeper may provide support with other count
functions, he/she should not have control over the preparation of the tally sheet, the applicable deposit slip(s) or
make the physical deposit at the bank.
Procedures
Collection at Mass
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Ushers collect baskets with offertory and proceed to a separate collection area where contents are transferred to sequentially numbered,
tamper resistant bag(s) in the presence of an independent witness.
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Each collection is transferred, unsorted, in its original form; i.e. no cash may be
removed from the offertory to cash checks, or for any other purpose.
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Bags are clearly identified by Mass and collection so that offertory from each Mass on the schedule is
accounted for.
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Once the offertory is sealed in the tamper resistant bag, both the usher and the
witness affix their signatures directly on the sealed bag.
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Bags with their contents are stored securely until counting. The use of drop safes
is preferred. In the alternative, vaults or fireproof cabinets may be used.
Transfer to Count Area
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If offertory bags must be transported to the count room from the drop safe or other secure location,
the clergy and /or other responsible employees with access to the safe combination or required lock keys
will perform this function.
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For security reasons, at least two independent persons must transport these bags.
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The bags are delivered directly to the count team and never left unattended.
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Dual control is recommended; with dual control, two people with different keys or combination
numbers are required to access the collections from their secured location.
Offertory Count
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The offertory bags are initially inventoried by the count team to ensure that each Mass and collection
is represented.
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Each bag number and its condition is recorded on the “Bag Tracking Form.” (attached)
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The offertory count is conducted in a secure location (access door locked if possible).
The area should be large enough to accommodate all team members, with all activity in clear view
and subject to peer observation. Adequate equipment (electronic bill counters, adding machines, etc.)
and supplies (wrappers, clips, bands, etc.) should be available.
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To assure accountability and transparency, each collection is accounted for on the parish books in
its entirety and in accordance with the intent of the donors. i.e. under no circumstances may
cash be removed prior to the count or bank deposit.
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Team members diligently count all loose cash, coins and checks followed by the opening of envelopes.
Envelope contents are marked on the envelope for future recording of parishioner contributions in PDS
(or other census software). As the count progresses, a designated team member works on completing
the weekly tally sheet.”
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A team member, independent of the tally sheet preparation, prepares the actual bank deposit.
Offertory proceeds to be deposited are maintained in tamper resistant bags.
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The total of all deposit slips is compared with the total collections recorded on the tally sheet.
This control function is performed by the clergy or a count team leader. Any differences must be reconciled.
All members of the count team then sign the tally sheet, evidencing their presence and participation.
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The completed tally sheet is forwarded to the parish bookkeeper for purposes of recording the offertory in the parish books.
Deposit of Offertory
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The bank deposit should be made as soon after the count as possible. For temporary storage of the deposit,
a safe, the parish vault or other fireproof, locking cabinet may be used. Again, access to combinations or
keys must be limited.
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Transport of the deposit to the bank by courier service is recommended. If that is not feasible,
it must be made by a two person team made up of the clergy and/or other responsible,
independent individuals. Depending on circumstances, security may be enhanced by employing
a variety of vehicles, delivery times, routes and bank branches. A consistent weekly pattern
of bank deposits is not desirable.
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The receipted deposit slip(s) should be forwarded to the parish bookkeeper for
purposes of verifying the bank deposit.
Recording the Weekly Offertory
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The total deposit recorded in the parish books should be compared with the receipted bank deposit slip(s)
to verify accuracy.
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The total deposit recorded in the parish books should be
compared with the receipted bank deposit slip(s) to verify
accuracy.
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Weekly tally sheet and deposit slips must be maintained with other accounting records in order to document
transactions and provide for an appropriate audit trail.
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For internal control purposes, an independent verification should be periodically performed
by a member of the parish clergy, finance committee or parish administrator. This verification
compares the tally sheet totals to the deposit slip totals to the offertory receipt totals in the
parish books.
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