Maintaining Financial IntegrityJack SmartTed Papit

Develop An Annual Budget

•Begin 3 months prior to start of the fiscal year

•Produce a chart of accounts•Decide on an Operation (P&L) Statement

format Consolidated Departments

•Build the budget from zero Justify departments and expenditures Based on the goals and objectives of the

organization

Financial Statement Production• Balance Sheet

For each month end Show assets, liabilities and equity

• Operating Statement (P&L) Monthly consolidated – actual versus budget and

actual versus prior year Monthly by department – actual versus budget

and actual versus prior year Year-to-date (YTD) Consolidated – actual versus

budget and actual versus prior year Year-to-date by department – actual versus

budget and actual versus prior year

Financial Review Process Each Month

•Account by account review Actual versus budget Actual versus prior year Reasons for variances Corrective action – by whom and when

Reporting To Your Board of Directors

•Latest Balance Sheet

•Year-to-date Consolidated Operating Statement

•Year-to-date Operating Statement by Department

Annual Independent Certified Audit

•Required for Teen Challenge International, USA accreditation

•Required to meet ECFA standards

Reporting to the Internal Revenue Service•Form 941

▫Employer’s Quarterly Federal Tax Return

•Form 990▫Return of Organization Exempt from

Income Tax This is public information Watchdog groups

Guidestar Wall Watchers

Ratio of expenses to total revenue

State Solicitation Registration• Required by the following states for religious Non-Profit

Associations Alaska Arizona Florida Georgia Illinois Maryland Minnesota North Carolina Tennessee Utah Wisconsin

• Non-religious associations need to file in all states

ECFA’s Seven Standards of Responsible Stewardship•Standard 1 – Doctrinal Statement•Standard 2 – Board of Directors and

Financial Oversight•Standard 3 – Financial Statements•Standard 4 – Use of Resources•Standard 5 – Financial Disclosure•Standard 6 – Conflicts of Interest•Standard 7 – Fund-Raising