Reporting and other financial requirements of the Church in Wales
All Parochial Church Councils (PCCs) are required to prepare and annual report and accounts, which must:
- comply with the Church in Wales Constitution and the Accounting regulations set out within the Constitution;
- be retained along with all of the accounting records for 6 years;
- be available for inspection by the Archdeacons;
- be available to the public on request.
Accounting Thresholds for Church in Wales Parishes
|Audit/Independent Examination||Method of accounting||Charity Commission Registration|
|Income less than £25,000||Independent Examination||Receipt and Payments accounts||N/A|
|£25,000 - £100,000||Independent Examination||Receipt and Payments accounts||Possibly after 2014|
|£100,000 to £250,000||Independent Examination||Receipt and Payments accounts||Yes|
|£250,000 to £500,000||Qualified Independent Examiner||Accruals Accounting||Yes|
|Over £500,000||Audit||Accruals Accounting||Yes|
Overview - Standard Form of Accounts for Parishes
Following a consultation exercise with parishes and approval of the dioceses and the Representative Body, a Standard Form of Accounts for Parishes was introduced from 1 January 2010.The Standard Form of Income and Expenditure sets out the categories of income and expenditure which should be used by parish Treasurers in preparing the accounts:
|Voluntary Income||Planned Giving||Regular planned giving by envelopes, standing orders, cheques, Gift Direct (GWADD) etc|
|Loose Collections||All loose collections, including offertory at occasional services (weddings, funerals etc)|
|Donations||All donations not included in the categories above, including offertory boxes, income from trust funds, gift day receipts and special appeals|
|For Mission||Mission boxes, house to house collections, all amounts received specifically for mission and charities in the UK and overseas|
|Tax Refunds||All tax recovered under the Gift Aid Scheme, including Gift Direct tax refunds|
|Legacy gifts Received||The capital value of legacies received|
|Grants||Heritage Lottery Fund, CADW, other Government grants, local or Church authorities|
|Generated Income||Money Raising||Sales of work, fetes, magazine income, bookstalls, rent from church and hall hire and use (income must be shown gross). Easter and Christmas cards (if used for money raising).|
|Fees||All fees for weddings, funerals, churchyards etc|
|Investment Income||Investment Income||Rent from investment properties, bank interest, interest or dividends from investments|
|Other Incoming Resources||Other Income||Insurance claims, profit on realisation of assets used for normal church purposes, eg. profit on sale of property, sale of assets for church purposes, sale of investments, transfer from deposits, loans received and repayment of loans made.|
|Support for Ministry||Parish Share||Parish share payable to the Diocese|
|Parochial expenses of clerics||All expenses incurred by the parish clerics (inc NSMs) relating to Parish business as provided in the Church in Wales guide for the reimbursement of clerics’ expenses.|
|Other||Payments to support assistant clergy, readers’ fees, curate’s stipend or contribution thereto; (but excluding expenses).|
|Parish Activities||Maintenance of Services||Altar requisites, verger, organist, organ and choir, service books.|
|General Parish Expenses||Meeting expenses, bank charges, printing, postage, stationery, telephone, office and general expenses, depreciation, leasing, hire purchase. Audit and accountancy fees, other professional fees and advice, preparation of statutory reports, statutory fees. Cost of gift aid envelopes. Costs incurred with investment management (brokers, managers fees).|
|Church Property||Maintenance of Churches||Electricity, gas, water, insurance, general repairs and maintenance, cleaning, interest on parish loans.|
|Maintenance of Other Property||All church property expenses including churchyards and church halls, but excluding the church building, interest on parish loans.|
|Exceptional Expenditure||Non-recurring major items of expenditure (major building repairs, renovations, extensions), associated professional fees. Additions to church furnishings.|
|Grant and Other Financial Support||Mission: Parish||Evangelism, education, Sunday School, youth club, payments to youth workers, local projects, caring groups, other secular contacts within the parish. Cost of church magazines, newsletters, publicity. Easter and Christmas cards (if not used for money raising)|
|Mission: Home/World||Other UK Church organisations, other UK charities. Support of diocesan projects. Support of the Church and other charitable causes overseas.|
|Other Resources Expended||Capital Payments||Purchase of assets for Church purposes; Purchase of investments; Transfer to term deposits; Loans made; Repayment of loans received. Losses on the realisation of assets.|
|Cost of Money Raising||All costs associated with ‘money raising’ income|
Receipts and Payments Accounts
Parishes with an income of under £250,000 can avoid the burden of having to prepare full accounts, and instead they may produce a ‘Receipts and Payments Account’ for the year and a ‘Statement of Assets and Liabilities’ at the year end.Detailed interactive spreadsheets, designed for parishes with an income of under £250,000, and producing Receipts and Payments Accounts (as opposed to Accruals Accounts), have been updated for 2013 and include new features, including a link to an interactive cashbook.The following link will direct you to a linked interactive spreadsheet containing several worksheets, and include:
- Advice on use of the interactive spreadsheets (Excel)
- Standard Form of Accounts (Excel)
- Receipts (Excel)
- Payments (Excel)
- Cashbook (Excel)
- Annual accounts (Excel)
- Notes to the accounts (Excel)
- Independent Examiners Report (Excel)
- Annual Financial Return (Excel)
Parishes with an income in excess of £250,000, must prepare their accounts on an accruals basis and include a Statement of Financial Activities (SOFA), whose form and content is specified in the Statement of Recommended Practice (SORP) issued by the Charity Commission. The ACAT handbook gives comprehensive advice to Treasurers preparing their accounts on the accruals basis.
Association of Church Accountants and Treasurers (ACAT) Handbook
A copy of this Handbook was distributed to each Parish Treasurer in early 2010, and the Parish Treasurer will receive regular updates to the Handbook, which is funded by the Representative Body.
If you are a new Treasurer, please ask the former Treasurer to give you the original copy provided. However, if you require a further copy of the Handbook and updates they are available (email: firstname.lastname@example.org) for around £12 p.a. The Handbook provides guidance for Treasurers and others concerned with the financial affairs of the Parish. However, not all of the Property Development and Insurance sections of the Handbook apply to the Church in Wales so please contact email@example.com if you have a query. The Handbook can be used as guidance on completing the Annual Report and Accounts of the Parish but the Receipts and Payments/Statement of Activities should follow the Standard Form of Accounts for Parishes (see below), and the Annual Report should include some extra information as also set out below. The handbook is available on-line at the ACAT website in full, and is accessible once you register at the website as a user.
Understanding Unrestricted and Restricted Funds
Parishes are often confused by the classification of General Funds and Restricted funds.
- General Funds / Unrestricted Funds are income or income funds which can be spent at the discretion of the PCC Members (trustees) in furtherance of any of the parish’s objects.
- Designated funds are part of the unrestricted funds which the PCC have earmarked for a particular project or use, without restricting or committing the funds legally. The designation may be cancelled by the PCC if they later decide that the parish should not proceed or continue with the use or project for which the funds were designated.
- Restricted funds: Restricted funds are funds subject to specific trusts, which may be declared by the donor(s) or with their authority (e.g. in a public appeal) or created through legal process, but still within the wider objects of the parish. Restricted funds may be restricted income funds, which are spent at the discretion of the PCC in furtherance of some particular aspect(s) of the objects of the parish, or they may be endowment funds, where the assets are required to be invested, or retained for actual use, rather than spent.
Tel: 029 2034 8200.
Tel: 029 2034 8200.