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Helps for Treasurers

The topics on this page may be of help to those who are new to being a parish treasurer. If you have suggestions for topics to cover, please let the Diocesan Treasurer know.

Please refer to the “Clergy Compensation” page for help in determining the target amount for clergy compensation and finding the payroll tax forms that must be filed with the IRS.

Contents:

Non-Profit Accountability

The following statements are taken from a white paper (April 2005, Blackbaud, Inc ) on accountability for non-profit organizations:

Accountability is all about being answerable to those who have invested trust, faith and money in (your parish). Nonprofits must be accountable to multiple stakeholders, including private and institutional donors; local, state, and federal agencies; volunteers; program recipients; and the public at large.
There are three components to accountability – financial and regulatory compliance, stewardship, and donor trust. To establish accountability across an organization, every department must both comply with nonprofit financial standards and demonstrate to key stakeholders that it has put in place the system and oversight needed to manage funds. When problems arise, nonprofits need to acknowledge them, fix them, and move on.
While the U.S. Senate is looking at legislative options to strengthen nonprofit accountability, states have not been sitting on the sidelines. Most notably, California’s Nonprofit Integrity Act imposes new financial requirements on nonprofits, including that audits be available to the public and that each nonprofit "establish and exercise control over its fundraising activities conducted for its benefit, including approval of all contracts and agreements."
To translate accountability principles into action, nonprofits have to translate these principles into actionable items.

  • Establish an audit committee.
  • Ensuring auditor communication with the board
  • Defining organizational policies and monitoring compliance
  • Reporting finances
  • Establishing Internal Controls
  • Providing for whistle blowers
  • Public disclosure

Read more: Internal Control Practices for Every Church

Signatures on checks

The signature(s) on parish checks should be the priest, the vice-president, or the treasurer of the parish council. Though the parish may require two signatures on a check, be advised that many banks no longer require or even check for two signatures. Thus, two signatures on a check would be an internal control mechanism only.

Recording Income

Counting, Making Deposits, and Tracking Donations

A process that protects the counters and reduces the chance of theft should control counting cash donations. I recommend that the plate donations be stored in a secure area as soon as possible after the collection has been taken. The collection should be kept secure until the counters are ready to begin their task.
Two people should always count the checks and cash received from the plate collections. The parish treasurer should not be one of the counters. If possible, counters should be scheduled in advance for this task.
As the envelope and check donations are counted, the amounts and category of the donation should be noted next to the donor’s name. Several copies of a list of parish members and donor names can be made available to the counters. One copy of the list can be filled in manually. If the list is an electronic spreadsheet, setting up automatic totals will help confirm the amounts received and to be deposited.
One of the counters or another assigned parishioner should deposit the funds in the bank as soon as possible.

Acknowledging Donations

Most parishes send end-of-the-year statements to members. This is a good practice because it is another way of confirming that donations have been received and properly recorded.
All individual donations of $250 or more must be individually acknowledged by a letter stating that the donor has not received any goods or services for the donation. The donor must receive this letter prior to filing an income tax return for the year in which the donation was made.

The 2008 Tax Guide for Churches is a “must read” from the IRS

Corporation Filings

In order to file federal employer tax forms, your parish will need an Employer Identification Number (EIN). To receive the benefits of a federal tax exempt organization, your parish will need a 501(c)(3) Non-Profit Number.
To file as a nonprofit corporation in California, use Form SI-100.

Paying Bills and Making Reimbursements

Parishes should use checks that have an attached voucher or create a carbon copy of the check. When the treasurer has written a check to pay an invoice, the invoice should be stapled to the check voucher or copy of the original check.

A parish should not reimburse anyone for any unsubstantiated expenses or expenses incurred without the consent of the parish council. The parish should provide an Authorization for Expenditure Form to anyone who expects to be reimbursed for a purchase.

All checks and substantiating materials should be filed by month in a file folder. Copies of deposit slips or receipts for bank deposits for the month should also be kept in that folder along with bank statements received for the month. The treasurer should provide the file folders for the year to the auditing committee in January of the following year.

The EIN Number

Every parish in the Diocese of the West should have their own Employer Identification Number (EIN). This number is required by banks when a parish wishes to open an account. This number is also required when submitting W2, W3, 1099, and 1096 forms to the IRS.
No parish should be using the Diocese’s EIN.
The EIN is a nine-digit number that has this format: NN-NNNNNNN. This number is NOT a “tax exemption number”, and is not related to your nonprofit corporation status. It does identify your parish uniquely to the IRS as well as banks.
You may obtain an EIN by submitting an Online Form SS-4 to the IRS or printing and submitting a Form SS-4.

For more information about clergy and church worker’s compensation, please refer to the “Clergy Compensation” page.

The 501(c)(3)

The 501(c)(3) number is the "non-profit" or "tax exemption number" that banks require. A parish may obtain its own number or it may petition the Orthodox Church in America (OCA) to allow it to be covered under its group exemption.

To apply for inclusion under the OCA’s exemption, the parish must submit the following items:

  1. A copy of the parish’s Articles of Incorporation
  2. A copy of the Parish’s Employee Identification Number (EIN)
  3. A copy of the parish’s By-Laws
  4. A completed "letter of consent" from the parish requesting inclusion in the OCA Group Exemption Roster.

These items must be submitted to:

The Orthodox Church in America
PO Box 675
Syosset, NY 11791-0675

When the above items are received, the OCA wll add the parish’s name to the roster and will provide a copy of the letter from the IRS affirming that the Orthodox Church in America is a not-for-profit parent organization qualifying for tax exemption from federal tax under Section 501(c)3) of the Tax Code.
This letter also includes the four-digit Group Exemption Number (GEN) the IRS has assigned to the Orthodox Church in America that should be added as a suffix to the parish’s corporate EIN.
You may obtain your own 501(c)(3) by filing federal Form 1023. ( as of Nov 2005).

Reporting to the State of California

Each State may differ in it’s requirements. If you are not in California, please check with the appropriate State office.

Reporting a New Employee

All employers are required to file a report of their new or rehired employees to the Employment Development Department (EDD) within 20 days of their start of work date. Complete Form DE 34, Report of New Employees, and mail to EDD MIC23, PO Box 997016, W. Sacramento, CA 95799-7016. To order form DE 34, call (916) 657-0529 or visit the EDD Web Site.

Reporting Independent Contractors

Any entity that is required to file a federal form 1099-MISC for service performed by an independent contractor must report specific information to the Employment Development Department (EDD). Information must be reported within 20 days of either making payments totaling $600.00 or more, or entering into a contract for $600.00 or more with an independent contractor in any calendar year, whichever is earlier. Use form DE 542 to report this information. To order form DE 54, call (916) 657-0529 or visit the EDD Web Site.

Calendar For Treasurers

January 31 – Parish Financial Reports for prior calendar year sent to Diocesan Treasurer
February 28 – Submit To Social Security Administration “Copy A” of each prior year’s W-2 Form issued to employees along with a W-3 transmittal form.
February 28 – Submit to the IRS “Copy A” of each prior year’s 1099-Mis form issued to self-employed persons along with a 1096 transmittal form by this date.
March – There are no tax deadlines to note in March.

Reporting to the Diocese

When to Send, What to Send

  • Annually, by January 31 – Annual Financial Report for the Previous Year. This report is also used to compute your parish Diocesan Percentage Assessment (DPA).
  • Annually, by September 30 – Parish Fair Share* Membership Count as of September 1
  • Annually – Parish Member and Non-Member Mailing list for The Orthodox Vision magazine (indicate who is a member and who is outreach)

Send all reports to:

Office of the Treasurer

Diocese of the West

22 Dunraven PL

Port Townsend, WA 98368-9500

* What is Fair Share?

The Fair Share Assessment program of the Orthodox Church in America is the method used to raise funds to support the administrative costs of the central administration. At the July 2005 All American Council, representatives of OCA parishes voted to accept a per member assessment calculated by taking the approved OCA budget and dividing the operating expenses by the number of Fair Share members reported.
When parishes report their membership count to the Treasurer of the Diocese, that number is reported to the Chancery of the OCA. The Diocese is then billed monthly for the Fair Share that is due from all members of all Diocesan Parishes.

Diocesan Percentage Assessment (DPA)

The Diocesan Percentage Assessment (DPA) is used to cover the operating expenses of The Diocese of the West. Any excess income from this assessment is applied to outreach activities of the diocese.
Click here to read the policy for calculating a parish’s DPA.
If you wish to estimate the amount your parish will owe for DPA in the coming year, click here to obtain a worksheet.

The following link will take you to the website for the Church Law and Tax Report. You may find the legal and tax information posted to be useful: The 12 Most Important Legal & Tax Issues For New Clergy