NGUMBE CCAP

TERMS OF REFERENCE FOR THE FINANCE POLICY

The financial health of our church is fundamental to fulfilling our mission and serving our
community effectively. This Terms of Reference (ToR) for the Church Finance Policy outlines the
principles, practices, and procedures for managing the church financial and non-finance resources.
It is designed to promote transparency, accountability, and responsible stewardship of funds,
ensuring that all financial activities align with our mission and values.

The church developed guidelines on welfare and its objectives included the following:

1. Transparency
Ensure that all financial transactions, budgeting processes, and financial reports are accessible and
understandable to church members, fostering an environment of trust and openness.

2. Accountability
Define clear roles and responsibilities for individuals involved in financial management, The
Finance Chairman, Congregation Treasurer and Pledge Treasure. Empower the Chairman to assign
specific responsibilities to other members of the committee when deemed fit to do so.

3. Effective Utilization of funds

Promote responsible allocation and expenditure of financial resources to maximize the impact of
the church programs.

4. Financial integrity
Adhere to ethical financial practices, ensuring that all financial dealings are conducted with
integrity and in compliance with the finance policy, applicable accounting standards and local
laws.

5. Budget planning and Control

Facilitate a systematic approach to budgeting that aligns with the church’s strategy, allowing for
proactive financial planning and monitoring of expenses.

6. Financial Reporting
Implement a regular schedule for financial reporting to the church leadership (Management,
Executive and Session) and congregation, providing insights into financial performance and
financial position.

7. Risk Management
Identify and mitigate financial risks associated with church operations, ensuring safeguards are in
place to protect church assets and resources.

8. Fixed asset management

Maintaining the fixed asset schedule and managing the assets to ensure assets are functional and
safe
Scope of the policy

Below are specific areas that need to be reviewed.

1. Income
The church has the following income streams; Church offering, tithe, Sunday school offering,
Zikomo Yesu, Development/fundraising offering, harvest offering, Donations and Synod pledges.
 Church offering should be accounted for during the services by cottage representatives
using forms and the Church Treasurer or finance representative if not available, will
consolidate the cottage offering in a summary form and submit to the Session Clerk or
deputies to announce in church. The Congregation Treasurer with help of cottage
representatives and other finance committee members will verify the amount collected
after the church services.
 Tithe should be accounted for after service and all the receipts should be issued at the
same time by the Congregation Treasurer or any finance committee representative if not
available.
 Sunday school offering will be accounted after the church services and receipt should be
issued
 Zikomo Yesu offering should be accounted like Church offering and 50% of all the offering
should be paid to the Moderator after proper bank reconciliation is done.
 Development/ Fundraising offerings should be accounted for during the service and
reported accordingly.
 All financial donations will be accounted for and be used for the intended purpose
 All pledge cards money collected will be accounted for and receipts shall be issued
promptly. The Pledge Treasure shall maintain a Pledge Analysis Registers according to
cottages and a copy be maintained in excel.
 Cottage Church cleaning monthly contribution shall be paid every first week of the month
by the cottage treasurer to the church through the Congregation Treasurer.
 Church offerings paid to presbytery or Synod of Blantyre shall be accounted for like normal
church offering and be paid after proper recordings are done.
 10% of the funds raised during fundraising shall be allocated to support church
administration.
 All other non-direct church offerings like cottage offering, Mvano and Men’s Ministry
offering shall be deposited in their special bank account and proper bank reconciliation and
report shall be maintained. These ministries not depositing with the church shall be
required to make a monthly contribution to the church at least 10% of the previous month
collection before the current month ends.
.
All church offering shall be deposited the church bank accounts in the next working day. The
summary forms and the deposit slips shall be filed in finance office.

2. Payments
The church makes the following payments: Administrative, 50% of tithe to Moderator, 50% of
Zikomo Yesu, 50% of Harvest offering and 100% of offering during special Sundays like Christmas
and baptism.
 Administrative costs shall include salaries and allowances paid on 25 th of every month. The
Congregation Treasurer shall prepare the payment requisition which shall be reviewed by
Finance Chairman and be approved by the Session Clerk.
 All payment paid as a percentage to the Moderator shall be done after a proper monthly
bank reconciliation is done
 Tithe shall be paid to the moderator not later than 10 th of the following month after a
proper bank reconciliation. The Congregation Treasurer shall be responsible for the
computation and preparation of the payment requisition which shall be reviewed by the
Finance Chair and approved by the Session Clerk.
 On tithe we monthly pay 50% moderator and keep the other half for the church until the
end of the year. The balance is not allocated to any specific activities or committees. This
delay is subjected to devaluations and inflation thereby reducing the buying power of the
other half. We therefore suggest that the 50% tithe for the church should be divided into
the following: Welfare-25%, Evangelism-25% and development (not limited to main
project)-25% and administration-25%.
 All offering payments to presbytery and Synod shall be recorded before it is paid.
 The petty cash float will be reviewed during the year by the finance committee and
recommended to management for adjustments.
 All petty cash payments shall be approved by the congregation treasurer and no payment
shall be made without his/her approval. The approval can be through phone and proper
petty cash voucher approvals shall follow.
 No petty cash reimbursement shall be done without proper reconciliation.

3. Reporting

The church adopted the cash basis type of reporting, and this means that all receipts and
payments shall be made through the bank accounts and reporting is based on the bank
statements.
 The Congregation treasurer shall present in church the prior month at least by
second Sunday of the current month.
 The monthly report shall be reviewed by the Finance Chair before being shared to
the stakeholders.
 The Congregation treasurer shall be responsible for preparing finance reports for
the administrative session which shall be reviewed by the Finance Chair and
approved by responsible Session Clerk before its shared to management and
executive committee.
 The monthly finance report shall be put on the church noticeboard on the same day
it is presented in church and shall be sent to both management and executive
before presentation.

4. Budget and planning

 The Finance Chairman will lead in budget consultation and consolidation for next
year starting January to December.
 The Finance Chair shall be responsible for budget presentation at the administrative
session.
 All committee Chairpersons shall send their budgets to finance a month before
administrative session.
 The finance Chairman shall provide advises and guidance to management and
executive on all matters of finance and risk management.

5. Asset Management
  The finance committee shall maintain an updated asset register for all church assets
 The Finance Chairman shall allocate this responsibility to two finance committee
members.
 Finance committee shall follow up on all church assets being managed by different
committees.

6. Internal Controls

 All church income shall be promptly recorded and banked in the following working
day
 All payment requisition shall be approved before payment is made, the team to
suggest approval matrix.
 The team should suggest on stores procedures, control and approvals
 The team should suggest the role of finance in the procurement process
 The team should go through make some recommendations as per suggested during
the previous audit

The team will be required to present a draft report to Finance Committee first before oral
presentation to management and executive and later to Session for approval.

The draft policy is expected to be submitted on 14 December 2024.