Parish Finance Parish Leadership 101 Workshop 2014 Stuart

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Parish Finance Parish Leadership 101 Workshop 2014 Stuart Hutcheson CMA Interim Treasurer & Director

Parish Finance Parish Leadership 101 Workshop 2014 Stuart Hutcheson CMA Interim Treasurer & Director of Finance 416 -363 -6021 x 238 [email protected] anglican. ca 1

Legal Status ØProvincial: Ontario Corporations Act (Not-for -Profit Corporations Act, further delayed) ØDiocesan: Constitution

Legal Status ØProvincial: Ontario Corporations Act (Not-for -Profit Corporations Act, further delayed) ØDiocesan: Constitution and Canons ØCanada Revenue Agency: Registered Charity 2

Resources for Churchwardens Ø Diocesan Website: www. toronto. anglican. ca/churchwardentoolbox/ Ø Parish Finance Manual:

Resources for Churchwardens Ø Diocesan Website: www. toronto. anglican. ca/churchwardentoolbox/ Ø Parish Finance Manual: www. toronto. anglican. ca/churchwarden-toolbox/parishfinance-manual/ Ø Parish Leaders’ Manual: www. toronto. anglican. ca/parishadministration/ Ø Canada Revenue Agency – Charities Ø www. cra-arc. gc. ca/chrts-gvng/chrts/menu-eng. html Ø Government of Ontario – Not for Profit Corporations Ø http: //www. citizenship. gov. on. ca/english/pp/legislative. shtml 3

Protection of Personal Information Ø“Privacy Standards Policy” ØThe Churchwardens have: Ø access to view

Protection of Personal Information Ø“Privacy Standards Policy” ØThe Churchwardens have: Ø access to view all books and records of the congregation, however; Ø Only for the purpose of satisfying themselves re: controls, procedures and duties. 4

Filing Requirements Ø March 15 th – Churchwardens’ Parochial Return Ø June 30 th

Filing Requirements Ø March 15 th – Churchwardens’ Parochial Return Ø June 30 th - T 3010 (Charitable Information Return for CRA) is due 6 months after year end Ø HST return - Annually or Semi-Annually if registered. Ø Public Service Bodies Rebate Form, every 6 months (www. cra-arc. gc. ca/E/pub/gp/rc 4034/README. html) 5

Filing Requirements Churchwardens Parochial Returns: As stated on the returns: “Failure to file this

Filing Requirements Churchwardens Parochial Returns: As stated on the returns: “Failure to file this return or the Incumbent’s return by March 15 may cause the Incumbent and Lay Members of Synod to forfeit their right to a seat in a session or sessions of Synod. ” T 3010 – CRA’s Charity Information Return CRA can (and has!) revoke your charitable status, whereupon the church is no longer exempt from tax and cannot issue donation receipts. 6

Financial Statements Government Requirements Ø CRA requires financial statements. Audit is recommended audit for

Financial Statements Government Requirements Ø CRA requires financial statements. Audit is recommended audit for charities with revenues > $250 K Ø Ontario Corporations Act Ø Revenues > $100 K, Audit 7

Financial Statements Canonical Requirements Ø Canon 14, section 14(7) states an audit is required

Financial Statements Canonical Requirements Ø Canon 14, section 14(7) states an audit is required Ø Canon 14, section 14(4) allows for a Review Engagement or Notice to Reader if revenues are less than $100 K with: Ø Approval of Area Bishop Ø Extraordinary resolution passed at Vestry 8

Review Levels Audit Review Compilation/ Notice to Reader Application of GAAP Compiling information Communication

Review Levels Audit Review Compilation/ Notice to Reader Application of GAAP Compiling information Communication Audit Report provided (opinion) Review Engagement Report Notice to Reader (no review) Level of Assurance Highest level Moderate level No assurance Who can perform Licensed Public Accountant (if charging) Nature of involvement Any accountant 9

Inflow of Funds - HST Ø Public Service Bodies’ Rebate (http: //www. craarc. gc.

Inflow of Funds - HST Ø Public Service Bodies’ Rebate (http: //www. craarc. gc. ca/E/pub/gp/rc 4034/) up to twice a year for nonregistrants Ø 50% of federal portion of HST (5%) Ø 82% of provincial portion of HST (8%) 10

HST Ø If Registered for HST: Ø Charge, collect and remit HST on your

HST Ø If Registered for HST: Ø Charge, collect and remit HST on your taxable supplies annually or semi-annually. Ø Registration is not required if you qualify for the Small Supplier exemption: Ø Less than $50, 000 in taxable sales (not including rent) or; Ø Less than $250, 000 in gross revenues Ø Must be in good standing as a Registered Charity with CRA. 11

HST ØRentals Ø Renting/leasing of church property - HST exempt. Ø Cemeteries Ø Interment

HST ØRentals Ø Renting/leasing of church property - HST exempt. Ø Cemeteries Ø Interment is exempt from HST unless the sale of the plot is a true sale Ø Rectory expenses (taxable benefit) Ø Not eligible for HST rebates (utilities) 12

Inflow of funds - Rentals ØPublic Benefit Test – CRA’s measurement for charities Ø

Inflow of funds - Rentals ØPublic Benefit Test – CRA’s measurement for charities Ø Cannot benefit private individuals (i. e. rental prices cannot be different for members vs. non-members) Ø Non-charitable activities? Ø Related businesses are allowed (see Decision Tree) Ø Ø Substantially all the work is done by volunteers Business is linked, but subordinate to the charity’s purpose 13

Inflow of Funds – Donations & tax receipts Ø Ø Ø Ø v Plate

Inflow of Funds – Donations & tax receipts Ø Ø Ø Ø v Plate offerings PAG (pre-authorized giving) Bequests (from an Estate) Endowments Designated gifts Gifts of stock Gifts of assets or supplies Services (labour) do not qualify as a gift, and cannot be receipted 14

Responsibilities of Funds - Trustees Ø The Churchwardens Ø responsible for following the provisions

Responsibilities of Funds - Trustees Ø The Churchwardens Ø responsible for following the provisions of the Public Guardian and Trustee Act of Ontario. Ø If there is a misapplication of funds Ø Ø Congregation will be required to make restoration. The Churchwardens may be required to personally make restoration. Ø Public Guardian and Trustee Act of Ontario Ø Restricted funds cannot be pledged as collateral nor can the Congregation borrow from restricted funds. 15

Consolidated Trust Fund (CTF) ØFund managers: Ø Ø Foyston Gordon & Payne Letko Brosseau

Consolidated Trust Fund (CTF) ØFund managers: Ø Ø Foyston Gordon & Payne Letko Brosseau Scotia Asset Management Northleaf Capital Partners ØDividend (distribution) is 4. 5% of the three year rolling average unit value. Ø 2014 - $8. 23 per unit paid out quarterly 16

Consolidated Trust Fund (CTF) Value of what we have in the CTF at Dec

Consolidated Trust Fund (CTF) Value of what we have in the CTF at Dec 31, 2013: Cash & Short-term deposits Bonds $ Prov. & Municipal Corporations 5% 22, 683, 883 3, 458, 151 Stocks & Mutual funds Real Estate TOTAL 5, 262, 500 $ 26, 142, 034 23% 82, 032, 213 70% 2, 871, 441 2% 116, 308, 188 100% 17

Consolidated Trust Fund. Performance 1 year 3 year 5 year CTF 18. 7% 8.

Consolidated Trust Fund. Performance 1 year 3 year 5 year CTF 18. 7% 8. 9% 10. 6% Benchmark 13. 4% 6. 9% 9. 6% Value added 5. 3% 2. 0% 18

Rectory Funds Guidelines: Re: The Sale of Rectories and the use of funds therefrom.

Rectory Funds Guidelines: Re: The Sale of Rectories and the use of funds therefrom. Ø Invested in the Consolidated Trust Fund Ø Dividends towards housing allowance (up to 100%) Ø Surplus: application can be made to use or borrow 19

Cemetery Fund Ø Fund Trustee: Scotia Trust Ø Fund manager: Scotia Asset Management Ø

Cemetery Fund Ø Fund Trustee: Scotia Trust Ø Fund manager: Scotia Asset Management Ø Principal amount cannot be withdrawn – perpetual care Ø Dividend (distribution) is 4. 5% of the three year rolling average unit value. Ø 2014 - $6. 44 per unit paid out quarterly 20

Cemetery Fund Value of what we have in the Cemetery Fund at Dec 31,

Cemetery Fund Value of what we have in the Cemetery Fund at Dec 31, 2013: Cash & Short-term deposits Bonds $ Gov of Canada Prov. & Municipal Corporations 3% 928, 603 750, 225 2, 131, 064 Stocks TOTAL 287, 800 $ 3, 809, 892 39% 5, 760, 919 58% 9, 858, 613 100% 21

Cemetery Fund- Performance 1 year 3 year 5 year Cemetery Fund 9. 1% 5.

Cemetery Fund- Performance 1 year 3 year 5 year Cemetery Fund 9. 1% 5. 7% 8. 9% Benchmark 4. 5% 3. 7% 7. 9% Value added 4. 6% 2. 0% 1. 0% 22

Withdrawals ØBoth wardens approval/signature Ø 2 weeks turnaround after receiving request Ø+ $250 k

Withdrawals ØBoth wardens approval/signature Ø 2 weeks turnaround after receiving request Ø+ $250 k – 2 extra weeks notice ØMay require Vestry approval or Diocesan Council approval, e. g. Rectory Funds 23

Faith. Works Report & Remittance Procedure ØFaith. Works funds held “in trust” ØRemit to

Faith. Works Report & Remittance Procedure ØFaith. Works funds held “in trust” ØRemit to the Diocese quarterly. ØParish may retain 15% for local outreach ØCampaign ends on Dec 31 each year ØReport & funds must be provided to the Stewardship office of the Diocese within the first week of January of every year 24

Our Faith – Our Hope Ø All donations are received and receipted by the

Our Faith – Our Hope Ø All donations are received and receipted by the Diocese Ø Donations of stock are to be processed through the Diocesan brokerage account Ø Rebates (40%) will be paid to the parish quarterly (not assessable on CWPR) Ø Promote how rebate is used re: “Case for Support” Ø Diocese will provide list of donors who have completed their pledges to allow parishes to follow up 25

Fundraising Ø Financial statement presentation for designated funds Ø Flexibility within the restrictions Ø

Fundraising Ø Financial statement presentation for designated funds Ø Flexibility within the restrictions Ø allow for the possibility for your parish council or advisory committee to change the use 26

Diocesan Grants Ø Ferguson – home for aged men or women Ø Carleton Fund

Diocesan Grants Ø Ferguson – home for aged men or women Ø Carleton Fund – clergy-occupied rectories Ø Baker Fund – church school facilities Ø Church Development Fund – loans for renewing and growing ministry Ø Church Development Rectory Fund – loans for purchasing/building rectories Ø Ministry Allocation Fund Ø Real Estate Ø Congregational Growth/Development Ø Innovative and new forms of ministry Ø Curacy Grants – support curacies at a parish Ø Reach Grants – local ministry Ø Our Faith – Our Hope Ø Building the Church for Tomorrow Ø Revitalizing our Inheritance Ø Area Council – Ministry Development Grants 27

Diocesan Requirements Ø Monthly billing from Diocese : Ø costs of clergy Ø Allotment

Diocesan Requirements Ø Monthly billing from Diocese : Ø costs of clergy Ø Allotment (Canon 4) Ø Overdue list (31/12/13): Ø Ø Ø 19 parishes greater than 3 months (hard list) 26 parishes less than 3 months (soft list) Total outstanding/unpaid $1, 292, 000 28

Diocesan Requirements Ø Overdue policy: Ø Interest charged at 3% above CIBC Prime (current

Diocesan Requirements Ø Overdue policy: Ø Interest charged at 3% above CIBC Prime (current charge 6%) Ø Request for payment plan Ø Visit parish to assist Ø Bishops are always kept informed (monthly) Ø Ineligible for Diocesan Grants Ø Churchwardens role may be taken over by an Administrator appointed by Diocesan Council 29

Record Keeping ØBank Accounts – you need at least one ! ØCIBC (preferred fee

Record Keeping ØBank Accounts – you need at least one ! ØCIBC (preferred fee schedule available) Ø$10 per month for basic services ØSam Marra 416 -980 -4538, sam. [email protected] ca ØCemetery funds & parish funds must be separated 30

Keep on-side with the rules ØVarious pieces of government legislation set out rules: ØCRA

Keep on-side with the rules ØVarious pieces of government legislation set out rules: ØCRA and Registered Charity requirements ØPayroll requirements ØOntario Corporations Act (Ontario Not-for- Profit Corporations Act, not yet in force) 31

Record Keeping Ø Keep 3 years of donation receipts Ø Any back up records

Record Keeping Ø Keep 3 years of donation receipts Ø Any back up records to verify for 3 years also (i. e. copy of cheque, cheque stub, envelope etc. ) Ø Accounting records need to be kept for 7 years. Ø Records kept at the address on file with CRA (church address). Back ups at another location 32

Donation Receipting (CRA guidelines) Ø Receipts must include the following: Ø Statement: “official receipt

Donation Receipting (CRA guidelines) Ø Receipts must include the following: Ø Statement: “official receipt for income tax purposes” Ø Church name and address Ø Charity’s registration number Ø Place and locality where receipt was issued Ø Amount of donation Ø Year of donation Ø Date of receipt if different than year of donation Ø CRA’s name and website (cra. gc. ca/charities) Ø Unique serial number Ø Signature of authorized individual (we recommend a churchwarden. ) 33

Record Keeping - salaries Ø Stipend paid clergy pay processed by the Diocese Ø

Record Keeping - salaries Ø Stipend paid clergy pay processed by the Diocese Ø Clergy paid on units and other employees (eg; administrator, organist) processed by the parish. (see payroll deductions online calculator provided by CRA (http: //www. cra-arc. gc. ca/esrvc-srvce/tx/bsnss/pdoceng. html) Ø Payroll records must be kept for 7 years. 34

Permanent Records Ø Minutes of Vestry, Advisory Board etc. Ø All documents and bylaws

Permanent Records Ø Minutes of Vestry, Advisory Board etc. Ø All documents and bylaws (Constitution and Canons) Ø Capital additions (e. g. building project) Ø Insurance policies (very important!) Ø Send to Diocesan archives when finished 35

END But this is only the beginning of an exciting new year for you

END But this is only the beginning of an exciting new year for you as a volunteer in your Parish !! 36