BP 11122023 129pm - Flipbook - Page 50
playground equipment is $20,000 and the full amount paid from the operating account; the
following transaction would occur when the when payment is made via check. You will notice
the entry is the same, but the amount changes.
Debit/increase capital replacement expense (playground project code)
20,000
Credit/decrease Operating checking account
20,000
In other cases, the amount of the donations $10,000 may exceed the full playground expense of
$8,000 leaving excess funds restricted* for a purpose that has already been fulfilled. In this
case, the following transaction would occur when the when payment is made via check. You will
notice the entry is the same, but the amount changes.
Debit/increase capital replacement expense (playground project code)
8,000
Credit/decrease Operating checking account
8,000
*Note that in this example an excess of $2,000 donated remains unused. If the amount is not
needed for the intended purposes, the donors should be notified. The donor may agree to
allocate the funds for another purpose (offertory, annual appeal, parishioner hardships, etc.).
The change in donor intent should be obtained in writing from the donor via a letter or email.
Donor intent must be honored; funds should be returned to the donor if the restriction can’t be
fulfilled and the donor does not agree that it can be used for other purposes.
Fundraising and collections for ministry use
Fundraising for ministry use: Examples include prison ministry, funeral ministry, men groups,
women’s groups, etc. Many of these groups solicit donations, charge dues, or perform
fundraising to use for their ministry. These funds can be used for the ministry’s benefit or for the
parish’s benefit, which drives the accounting required.
Accounting for ministry funds raised for ministry use: Funds raised for the ministry’s own
benefit should be recorded in the exchange account. For example, if the women’s group holds a
bake sale and uses the proceeds to buy tickets for the women to attend a play, the transactions are
recorded to the exchange account as the benefit is not for the parish, but the ministry. If proceeds
are more than the funds spent, a balance grows in the ministry account. If the proceeds don’t
cover the full expense, prior women’s group reserve can be used to cover the payment. If the
cost are more than those available for the women’s group usage and the pastor still approves the
ticket purchases, the exchange account would be zeroed out first and the excess recorded to
parish ministry expense. The specific accounting follows:
Women’s Group example:
Proceeds from the bake sale are included in the weekly deposit and the following occurs when
the deposit is made:
Debit/increase Operating checking account
250
Credit/increase Women’s Group exchange account
250
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