PARISH ADMINISTRATION & FINANCE ENEWS
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Inaugural issue - message to subscribers
Welcome to the first issue of Parish Admin & Finance eNews!
 The work done by Rectors, Wardens, Parish Administrators, Treasurers, and Vestry members can be challenging. We hope that this newsletter (which will be published six times annually on even-numbered months) will bring you news, calendar events, and tips to make your work in support of parishes less daunting, and more effective and fulfilling. Several offices at The Commons are launching this new communication platform enthusiastically, as we appreciate and honor the time and effort that each of you perform for the parishes that you love and support.
Please forward this to others in your parish who might find this information of this nature useful, and let us know who from your parish we should add to our subscriber list (please contact
Gigi Leackfeldt). You are receiving this because you checked the box for it when you signed up, or, we had your address through your relationship to ECCT and believed you would be interested in receiving these. You can unsubscribe, or change your email address, at any time following links at the bottom of each eNews.
We hope to bring you timely information and suggestions in keeping with the administrative and financial management activities that typically take place over the course of the year. Investment management, budgeting, and health insurance issues will all be topics for future issues of Parish Admin & Finance eNews. It may also cover Sunday visitations, confirmation certificates, changes in laws that could have an impact, supply clergy rates, and more. This issue will focus on Parochial Reports and share with you answers to questions parish leaders have been asking us recently on a number of topics.
Louis Fuertes
Canon, Mission Finance & Operations
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HR Matters: Why it is important to have an updated employment letter
By Kayla Tubolino, HR Administrator for ECCT Staff at The Commons
A letter of employment specifies the terms and conditions between an employer and employee. It is not a contract or guarantee of employment but a document that outlines specifics so an employee is not left wondering.
Reasons why you should have one on file for each and every employee:
- Incoming and existing employees (if existing employees do not have them) will have an understanding of their rights and it can give them more assurance versus a verbal agreement.
- Conflicts can be avoided because the employment letter will state the employers expectations. This can help facilitate management conversations if expectations are not being met.
- The employment letter is an encompassing document that may trigger conversations about topics one may forget when hiring a new employee. i.e. Non-profit organizations may be excused from paying into unemployment. It is always a good thing for your employees to know that they may not be eligible for unemployment should their employment status change.
Creating employment letters for your employees does not have to be difficult or time consuming. Here is a link for a sample Letter of Employment that can be used as a template to work from for your parish employees.
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In Focus: Parochial Reporting Tips
By Louis Fuertes, Canon for Mission Finance & Operations
Parishes are required (by The Episcopal Church and ECCT) to file Parochial Reports annually, and compliance with this request has been quite good in recent years. The timeliness of compliance is another issue, however. Parochial Reports are due on March 1 by ECCT canons, and our reminders of this date reflect the fact that we need information early in the year so we can monitor parish financial performance, support clergy transition planning and to prepare ECCT budgets.
Conversations with many parishes and our analysis of Parochial Report submissions led us to introduce "Parochial Report 101" training sessions this year to help parishes complete their reporting in a manner that portrays parish activity and financial performance accurately, completely and in a manner that is advantageous to parishes financially.
There are good reasons for you to read further!
Page 2 of Parochial Reports document membership, attendance, worship services, sacraments (baptisms, confirmations, marriages, burials) and Christian formation practices, reflecting parish life in the prior year. We review this information carefully, and do not sense that parishes experience great difficulty in completing this page.
However, Page 3, which summarizes parish financial performance and condition, can be a challenge, particularly for first-time treasurers. Let me focus on three areas.
- Line B - Operating Revenues (portraying this information correctly can reduce future Common Mission Support obligations)
- Lines 4 and 20 (reporting this information correctly can prevent parishes from problems with the Endowment Stewardship & Mutual Responsibility Resolution passed at our 2015 Annual Convention)
- Line E - Operating Expenses (the financial sibling for Line B, which together portray parish operations and are key drivers of financial sustainability
Line B - Operating Revenues -- A parish's statement of its 2016 Operating Revenues will determine its Common Mission Support obligation for 2018 (10% of "trailing year" Operating Revenues has been the Common Mission Support obligation since our 2014 Annual Convention, and 2016 is the trailing year for 2018). Parishes should report all revenues generated in 2016 to support operations -
but no more than Parochial Report requirements dictate. Non-operating revenues do not affect Common Mission Support obligations and should be excluded from the lines that collectively add up in calculating Line B. For example:
- Line 3 ("Plate collections, pledge payments and regular support") should not include capital campaign pledge payments (a non-operating revenue reported on line 8). Funds collected for designated outreach efforts (e.g., Hurricane Relief for Costa Rica, Coats for Kids drive for needy families in Connecticut) should be reported on line 11, non-operating revenues to be transmitted to other organizations
- Line 4 ("Money from Investments for Operations in 2016") should not include any draws from your parish's investments that was used for major building maintenance (e.g., repaving the parking lot, re-roofing the sanctuary, replacing a boiler). Only funds from investments used to pay employee compensation, building operating and minor maintenance costs, Common Mission Support, parish ministry expenses and other operating costs should be reported on Line 4.
- Line 5's title is a mouthful ("Other operating income, including unrestricted gifts & restricted gifts used for operations & contributions from congregation's organizations") and typically includes fund-raising and facility use contributions from outside organizations. In addition to the "operating vs non-operating" distinctions discussed above, be sure and subtract the expenses incurred by the parish in generating this income.
- If there was a fund-raiser, subtract the costs incurred for it.
- If the parish rents out its rectory, subtract the property taxes, utility expenses and maintenance costs incurred.
Lines 4 and 20 - Endowment draw % determinants. The Endowment Stewardship and Mutual Responsibility Resolution of our 2015 Annual Convention (
here)
specified three-year limits on parish endowment drawdowns in support of operations and consequences for exceeding these limits. In practice, ECCT staff will compare information on Line 4 ("Money from Investments for Operations in 2016") with Line 20 ("Total investment at market value") to identify parishes that might exceed limits specified by this resolution. Through conversations with a number of parishes, we are aware of common reporting errors that can falsely indicate non-compliance with the resolution. To avoid this result, we advise parishes as follows:
- For Line 4,
- include only income used for operations, as noted in the discussion above.
- In addition, include only investment income for operations from investment funds that benefit only your parish. Report income used for operations from shared trusts (that benefit your parish and other organizations and individual) on line 5.
- In Line 20, include only market value from funds that benefit only your parish.
By following these practices, your parish's endowment drawdown practices will be reflected accurately.
Line E - Operating Expenses. In the discussion above, we referred to operating expenses as expenditures to "pay employee compensation, building operating and minor maintenance costs, Common Mission Support, parish ministry expenses" and other costs to support annual operations of your parish. Other expenses should be reported elsewhere:
- The purchase of long-lived assets (vestments, hymnals, prayer books, artwork, furniture, computers, printers and other office equipment) are non-operating expenses and should be reported on Line 15.
- In addition, proceeds of collections to be transmitted (or passed-through") to other organizations should be reported as a non-operating expense on Line 18.
After sorting out these non-operating expenses, report Common Mission Support on Line 12, Outreach expenses from your operating budget on Line 13 and all other operating expenses (employee compensation, parish operating expenses, etc.) on Line 14. If you netted out expenses in your calculation of Other Operating Income (as advised above), net out the same amount from your calculations of Line 14 so you will not overstate your parish's operating expenses.
What about all the other lines in Page 3? Instructions for other line items on pages 2 and 3 are provided in Workbooks on the National Church website:
Click here
For page 2;
Click here
for Page 3.
We focused on the sections above because they are most pertinent to parishes in Connecticut.
Good luck and thank you
for your efforts to portray your parish accurately,
for getting Parochial Reports to us by March 1, and
for all you do to support your parish.
Closing note: It's not too early to prepare for your parish audit of 2016 financial reports.
- Parishes with Total Revenue (Line D on your Parochial Report) over $500,000 are required to have a full audit performed annually by a Certified Public Accounting firm.
- Parishes with Total Revenues less than $500,000 can have a Financial Review of Agreed-Upon Procedures performed by an Independent Public Accountant.
Audits/Financial Reviews of 2016 financial statements are to be submitted before September 1, 2017. Please contact Karolyn Nicolaides (
knicolaides@episcopalct.org or 203-639-3501, ext. 123) for names of firms that have performed audits and reviews for other ECCT parishes.
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Donations and Bequests for Church Purposes, Inc.
By Theresa DuPont, Secretary, Donations and Bequests
D&B's objective is to provide financial counsel and professional investment management for parishes and organizations in ECCT. The D&B Balanced Fund is currently held at U.S. Trust, a division of Bank of America Corp. which serves as investment advisor, custodian, and record keeper of the fund.
FUN FACTS
Moving money in and out of D&B is simple,
click here for the D&B Request Form.
- For additions, money can be wired at no charge by D&B or by check.
- Request for withdrawals are processed the first of each month; ACH deposits should be received 2 business days after the first, checks (snail mail) 3-5 business days after the 1st
- Vestry minutes approving withdrawal and two authorized signatures are necessary
Quarterly Performance Reports are posted on the D&B webpage:
here. Reports contain asset allocation, executive summary, investment performance since inception and portfolio holdings.
- The D&B portfolio had a +7.13% return for 2016
- Additions into the D&B Balanced Fund for 2016 totaled $6,144,632
- 2016 total of 10 new funds were created
- Asset diversification as of 2-6-2017 shown in the chart below
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Parish admins invited to join a listserve
 Want to chat with colleagues about ACS vs PowerChurch? Offer tips on more successful mail merges? Get suggestions on names for a new campaign?
Alison Hollo, Senior Administrator for the Office of the Episcopate, invites parish administrators to forward her their names and email addresses to be added to an ECCT listserve for parish admins.
As a member of Bishops' Executive Secretaries Together (B+E+S+T), Alison has participated in their listserve and wants to make the same opportunity available for parish admins in ECCT.
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Clergy Compensation notes:
From the Rev. Lee Ann Tolzmann, Canon for Mission Leadership
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If a Letter of Agreement is modified to
reduce
clergy salary or benefits, it must be approved by the Canon for Mission Leadership and the Bishop.
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If clergy who work half-time or more are being paid diocesan
minimum
salary and have been ordained less than 20 years, each year they should receive a salary increase of $749 for full time work (adjusted proportionally for less than full time). This increase keeps them at the minimum salary.
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Parish properties
Fire protection alarm protection system subsidy available
"We strongly encourage parishes to equip all buildings with central station, early fire detection systems. ECCT offers parishes a financial incentive plan (one-half of the total system cost up to a maximum grant of $2,500) to assist parishes with the installation costs of this equipment plus other related protection devices." --Source: Treasurers' Newsletter 2.2.6
Property Insurance "Did you knows"
By Matt Handi, Operations Manager
 Did you know that actions and decisions of Vestry members are covered under ECCT's "Directors and Officers" liability insurance?
Did you know that ECCT's insurance Board voted to increase the parish deductible for property and casualty losses from $2,500 to $3,750 for 2017? This decision was made to reduce our claim investigation expense for smaller claims.
Did you know that parishes should contact John Webster at York Risk Services at 201-388-4509 to file a property loss or damage claim? To initiate a claim, you will need your Parish ID Number found in your insurance handbook and a description of the loss.
- If you have trouble finding your parish ID please contact Matt Handi via email or at 203-639-3501, ext. 107.
- Once the claim has been filed, please reach out to Matt Handi to notify him of the loss.
To report other classes of losses (e.g., worker's compensation, general liability, automobile) please consult your insurance handbook for contact phone numbers. It is important to place a claim as soon as possible!
It isn't easy being green, but these tips might help!
 Kermit the Frog can be found on YouTube singing "It isn't easy being green", and one wonders if he has prior experience and a parish property manager. Many of our beloved sanctuaries, parish halls and rectories are over 100 years old, consume lots of energy to heat, cool and illuminate and cannot readily be made energy-efficient by today's standards.
A number of parishes have chipped away at their energy costs by:
- adding insulation
- converting heating systems from oil to natural gas
- installing LED lighting systems
- solar panel installation
- other great opportunities
One of the energy contractors we have met with recently has volunteered to assess the solar potential for up to 20 ECCT parishes that are:
a) genuinely interested investigating the potential for solar energy, and
b) owns under-utilized sunny acreage near its buildings or
c) has recently (within the last five years) re-roofed parish buildings, and
d) is not limited by historic district designations.
If this sounds like your parish, please contact ECCT's Property Manager Dave Desmarais,
203-639-3501, ext. 101 to find out if your parish might benefit from a solar panel project.
How to get approval for major property transactions
Parishes must get approval for "encumbrances and alienations" of property and financial assets. What does that mean?
- "Encumbrances" including use of real estate or financial assets as loan collateral, leasing property for more than a year and the formal provision of usage rights (even if no money changes hands) to a third party.
- The term "alienations" generally refers to a property sale
 Canons of The Episcopal Church require that encumbrances and alienations must be approved by the Standing Committee and Bishops. ECCT's process for seeking approval is pretty simple.
- Parishes submit a proposal outlining the request.
- There is no set format or structure,
- A brief Word document summary is fine, with whatever supporting documentation needed to describe the proposal in greater detail (such as a draft business agreement or lease) along with a narrative about how the arrangement will allow the parish to support God's mission in the communities it serves
- The proposal should be submitted to Matt Handi
- The proposal will be reviewed by ECCT staff along three dimensions: financial, property/mechanical, and missional
- ECCT staff prepares summaries of these reviews which are forwarded to Bishops and Standing Committee members 10 days in advance of Standing Committee meetings, which are currently held on the third Thursday evening of the month.
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Annual reminders from the finance office
- February 21, 10:00 a.m.: Final "Parochial Report 101" session
- March 1, 2017: Parochial Reports submitted online AND mailed to The Commons
- September 1, 2017: Audits of 2016 parish business records due
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Treasurers' Newsletter
2017 Treasurers' Newsletter can be found
here.
2016 Treasurers' Newsletter can be found
here.
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