Parish Finance Parish Leadership 101 Workshop

2014

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Stuart Hutcheson CMA

Interim Treasurer & Director of Finance

416-363-6021 x 238 hwadehra@toronto.anglican.ca

Legal Status Provincial: Ontario Corporations Act

(Not-for-Profit Corporations Act, further delayed)

Diocesan: Constitution and Canons

Canada Revenue Agency: Registered Charity

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Resources for ChurchwardensDiocesan Website:

www.toronto.anglican.ca/churchwarden-toolbox/Parish Finance Manual:

www.toronto.anglican.ca/churchwarden-toolbox/parish-finance-manual/

Parish Leaders’ Manual: www.toronto.anglican.ca/parish-administration/

Canada Revenue Agency – Charities www.cra-arc.gc.ca/chrts-gvng/chrts/menu-eng.html

Government of Ontario – Not for Profit Corporations http://www.citizenship.gov.on.ca/english/pp/

legislative.shtml3

Protection of Personal Information“Privacy Standards Policy”

The Churchwardens have:access to view all books and records of

the congregation, however;

Only for the purpose of satisfying themselves re: controls, procedures and duties.

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Filing RequirementsMarch 15th – Churchwardens’ Parochial Return

June 30th - T3010 (Charitable Information Return for CRA) is due 6 months after year end

HST return - Annually or Semi-Annually if registered.

Public Service Bodies Rebate Form, every 6 months (www.cra-arc.gc.ca/E/pub/gp/rc4034/README.html)

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Filing RequirementsChurchwardens 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.”

T3010 – CRA’s Charity Information ReturnCRA can (and has!) revoke your charitable status, whereupon the church is no longer exempt from tax and cannot issue donation receipts.

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Financial StatementsGovernment Requirements

CRA requires financial statements. Audit is recommended audit for charities with revenues > $250K

Ontario Corporations Act Revenues > $100K, Audit

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Financial StatementsCanonical Requirements Canon 14, section 14(7) states an audit is

required

Canon 14, section 14(4) allows for a Review Engagement or Notice to Reader if revenues are less than $100K with:Approval of Area BishopExtraordinary resolution passed at Vestry

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Review Levels

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Audit Review Compilation/Notice to Reader

Nature of involvement

Application of GAAP

Application of GAAP

Compiling information

Communication provided

Audit Report (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)

Licensed Public Accountant (if charging)

Any accountant

Inflow of Funds - HST

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Public Service Bodies’ Rebate (http://www.cra-

arc.gc.ca/E/pub/gp/rc4034/) up to twice a year for non-registrants 50% of federal portion of HST (5%) 82% of provincial portion of HST (8%)

HSTIf Registered for HST:

Charge, collect and remit HST on your taxable supplies annually or semi-annually.

Registration is not required if you qualify for the Small Supplier exemption: Less than $50,000 in taxable sales (not including

rent) or; Less than $250,000 in gross revenues

Must be in good standing as a Registered Charity with CRA.

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HSTRentals

Renting/leasing of church property - HST exempt.

Cemeteries Interment is exempt from HST unless the sale of

the plot is a true sale

Rectory expenses (taxable benefit) Not eligible for HST rebates (utilities)

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Inflow of funds - RentalsPublic Benefit Test – CRA’s measurement

for charities Cannot benefit private individuals (i.e. rental prices

cannot be different for members vs. non-members)

Non-charitable activities? Related businesses are allowed (see Decision Tree)

Substantially all the work is done by volunteers Business is linked, but subordinate to the charity’s

purpose

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Inflow of Funds – Donations & tax receipts

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 receipted14

Responsibilities of Funds - TrusteesThe Churchwardens

responsible for following the provisions of the Public Guardian and Trustee Act of Ontario.

If there is a misapplication of funds Congregation will be required to make restoration. The Churchwardens may be required to personally make

restoration.

Public Guardian and Trustee Act of Ontario

Restricted funds cannot be pledged as collateral nor can the Congregation borrow from restricted funds.

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Consolidated Trust Fund (CTF)Fund managers:

Foyston Gordon & Payne Letko Brosseau Scotia Asset Management Northleaf Capital Partners

Dividend (distribution) is 4.5% of the three year rolling average unit value.

2014 - $8.23 per unit paid out quarterly

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Consolidated Trust Fund (CTF)Value of what we have in the CTF at Dec 31, 2013:

Cash & Short-term deposits $ 5,262,500 5%

Bonds Prov. & Municipal 22,683,883 Corporations 3,458,151 26,142,034 23%

Stocks & Mutual funds 82,032,213 70%

Real Estate 2,871,441 2%

TOTAL $ 116,308,188 100%

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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% 1.0%

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Rectory FundsGuidelines: Re: The Sale of Rectories and the

use of funds therefrom.

Invested in the Consolidated Trust Fund

Dividends towards housing allowance (up to 100%)

Surplus: application can be made to use or borrow

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Cemetery FundFund Trustee: Scotia Trust

Fund manager: Scotia Asset Management

Principal amount cannot be withdrawn – perpetual care

Dividend (distribution) is 4.5% of the three year rolling average unit value.

2014 - $6.44 per unit paid out quarterly20

Cemetery FundValue of what we have in the Cemetery Fund at Dec 31, 2013:

Cash & Short-term deposits $ 287,800 3%

Bonds Gov of Canada 928,603 Prov. & Municipal 750,225 Corporations 2,131,064

3,809,892 39%

Stocks 5,760,919 58%

TOTAL $ 9,858,613 100%

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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%

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WithdrawalsBoth wardens approval/signature 2 weeks turnaround after receiving

request

+ $250k – 2 extra weeks notice

May require Vestry approval or Diocesan Council approval, e.g. Rectory Funds

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FaithWorks Report & Remittance ProcedureFaithWorks funds held “in trust”

Remit to the Diocese quarterly.

Parish may retain 15% for local outreach

Campaign ends on Dec 31 each year

Report & funds must be provided to the Stewardship office of the Diocese within the first week of January of every year

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Our Faith – Our HopeAll donations are received and receipted by the

Diocese

Donations of stock are to be processed through the Diocesan brokerage account

Rebates (40%) will be paid to the parish quarterly (not assessable on CWPR)

Promote how rebate is used re: “Case for Support”

Diocese will provide list of donors who have completed their pledges to allow parishes to follow up

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FundraisingFinancial statement presentation for

designated funds Flexibility within the restrictions

allow for the possibility for your parish council or advisory committee to change the use

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Diocesan Grants

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Diocesan RequirementsMonthly billing from Diocese :

costs of clergyAllotment (Canon 4)

Overdue list (31/12/13): 19 parishes greater than 3 months (hard list) 26 parishes less than 3 months (soft list) Total outstanding/unpaid $1,292,000

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Diocesan RequirementsOverdue policy:

Interest charged at 3% above CIBC Prime (current charge 6%)

Request for payment planVisit parish to assistBishops are always kept informed (monthly) Ineligible for Diocesan GrantsChurchwardens role may be taken over by

an Administrator appointed by Diocesan Council

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Record KeepingBank Accounts – you need at least one !

CIBC (preferred fee schedule available)$10 per month for basic servicesSam Marra 416-980-4538,

sam.marra@CIBC.ca

Cemetery funds & parish funds must be separated

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Keep on-side with the rulesVarious pieces of government

legislation set out rules:CRA and Registered Charity

requirements

Payroll requirements

Ontario Corporations Act (Ontario Not-for-Profit Corporations Act, not yet in force)

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Record KeepingKeep 3 years of donation receipts

Any back up records to verify for 3 years also (i.e. copy of cheque, cheque stub, envelope etc.)

Accounting records need to be kept for 7 years.

Records kept at the address on file with CRA (church address). Back ups at another location

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Donation Receipting (CRA guidelines)

Receipts must include the following: Statement: “official receipt for income tax

purposes” Church name and address Charity’s registration number Place and locality where receipt was issued Amount of donation Year of donation

Date of receipt if different than year of donation CRA’s name and website (cra.gc.ca/charities) Unique serial number Signature of authorized individual (we

recommend a churchwarden.) 33

Record Keeping - salariesStipend paid clergy pay processed by the

Diocese

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/pdoc-eng.html)

Payroll records must be kept for 7 years.34

Permanent RecordsMinutes of Vestry, Advisory Board etc.

All documents and bylaws (Constitution and Canons)

Capital additions (e.g. building project)

Insurance policies (very important!)

Send to Diocesan archives when finished

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END

But this is only the beginning of an exciting new year for you as a volunteer

in your Parish !!

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