15. Finances

For units in the United States and Canada, the term administration office in this section refers to Church headquarters in Salt Lake City.

For units outside the United States and Canada, the term administration office refers to the Presiding Bishopric administration office or service center that serves the unit.

General Church Financial Leadership

The Council on the Disposition of the Tithes, composed of the First Presidency, Quorum of the Twelve, and Presiding Bishopric, oversees all finances and property of the Church and determines the disposition of tithes and other offerings (see D&C 120; Conference Report, Apr. 1991, 74).

Stake Financial Leadership

Stake President

The stake president oversees stake finances. He may delegate much of this work to his counselors and clerks. He should read all instructions from the administration office about Church finances.

The stake president ensures that stake clerks and stake and ward leaders are taught their responsibilities for finances. He also ensures that they follow Church policies and procedures in fulfilling these responsibilities. He regularly reviews budgets and expenditures with bishops, stake clerks, and stake leaders.

The stake president teaches members to pay a full tithe and give generous offerings (see pages 134-35).

The stake president ensures that stake funds are properly handled and accounted for (see pages 136-37). He also manages the stake budget and expenditures (see page 137).

The stake president ensures that budget allowance guidelines are followed in the stake (see pages 137-38). He also ensures that the stake and wards follow applicable tax regulations to preserve the Church's tax-exempt status (see page 140).

The stake president oversees and reviews audits of stake and ward financial records (see page 139). He assigns clerks to follow up on all audit concerns within 30 days of the audit.

Stake Clerk (or Assistant Stake Clerk)

The stake president assigns the stake clerk or an assistant stake clerk to help with stake financial record keeping. This is an important calling to help account for and protect the sacred funds of the Church. The financial record-keeping duties of this clerk are outlined below and explained further in instructions from the administration office.

He receipts income property (such as funds collected from members for optional enrichment activities or from other stakes for multistake activities). He also accompanies the member of the stake presidency who deposits the income.

He prepares checks and makes sure stake financial obligations are paid promptly. He also reconciles the checking account and the local deposit bank account, if any. If necessary, he helps wards reconcile and correct ward deposits and expenditures.

He helps the stake presidency prepare the annual stake budget and keep track of the stake budget allowance (see pages 137-38). He also helps the stake president keep track of missionary funds in the stake.

He makes sure the stake is complying with all, applicable tax laws (see page 140). He also participates in periodic audits by stake auditors (see page 139).

Ward Financial Leadership

Bishop

The bishop oversees ward finances. He may delegate much of this work to his counselors and clerks. He should read all instructions from the administration office about Church finances.

The bishop ensures that ward clerks and ward leaders are taught their responsibilities for finances. He also ensures that they follow Church policies and procedures in fulfilling these responsibilities. He regularly reviews budgets and expenditures with clerks and ward leaders.

The bishop teaches members to pay a full tithe and give generous offerings (see pages 134-35).

He ensures that ward funds are properly handled and accounted for (see pages 136-37). He also manages the ward budget and expenditures (see page 137).

The bishop ensures that budget allowance guidelines are followed in the ward (see pages 137-38).

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He also ensures that the ward follows applicable tax regulations to preserve the Church's tax-exempt status (see page 140).

The bishop should be available to answer questions during audits of ward financial records (see page 139).

Ward Clerk (or Assistant Ward Clerk)

The bishop assigns the ward clerk or an assistant ward clerk to assist with ward financial record keeping. This is an important calling to help account for and protect the sacred funds of the Church. The financial record-keeping duties of this clerk are outlined below and explained further in instructions from the administration office.

Each week he helps a member of the bishopric account for all tithes and other offerings. He accompanies the member of the bishopric who deposits these funds in a bank. He also remits the tithing to the administration office.

Each month this clerk reconciles the ward checking account and any other financial records required. He also informs the bishop of (1) the status of ward expenditures in relation to the budget allowance and (2) the amount of funds in the ward "Missionary" and "Other" categories.

Each year this clerk prepares and organizes records to help the bishop conduct tithing settlement. He also helps the bishop prepare the Annual Tithing Status Report. In addition, he produces and distributes Year-to-Date Tithing and Offerings Statements and year-end summaries to members.

The bishop may assign this clerk to prepare checks as needed, help prepare the annual ward budget, and participate in financial audits by stake auditors (see page 139).

Contributions by Members

Church leaders should teach members the principles of tithes and other offerings and encourage members to live these principles. Nonmembers also may make contributions to the Church. Tithes, other offerings, and other contributions are described in the following paragraphs.

Tithing

Definition of Tithing

The First Presidency has written: "The simplest statement we know of is the statement of the Lord himself, namely, that the members of the Church should pay 'one-tenth of all their interest annually, which is understood to mean income. No one is justified in making any other statement than this" (First Presidency letter, 19 Mar. 1970; see also D&C 119:4).

Who Should Pay Tithing

All Church members who have income should pay tithing, with the following exceptions:

When and How to Pay Tithing

Local leaders should encourage members to pay tithing as they receive their income. However, members who wish to pay annually may do so.

Members give their tithing and a completed Tithing and Other Offerings form to a member of the bishopric. See also "In-Kind Donations, Including Tithing," page 135.

Use of Tithing Funds

Bishops may not use tithing funds for any purpose. All tithing funds must be remitted to the administration office (see D&C 120).

Tithing Settlement

The bishop holds tithing settlement near the end of each year. In urgent cases when the bishop is absent, the stake president may authorize one of the bishop's counselors to conduct tithing settlement.

All members should attend tithing settlement to make sure their contribution records are correct and to declare to the bishop their status as tithe payers. AR members of a family should attend tithing settlement. In addition to reviewing the members' tithing records, during tithing settlement the bishop can discuss the principle of tithing with them, encourage them to give a generous fast offering, and discuss other relevant matters.

Instructions for tithing settlement are provided by the administration office.

Fast Offerings

Each month members should contribute fast offerings that are at least the equivalent value of the two consecutive meals not eaten during the fast. When possible, members are I encouraged to be generous and contribute much more than this amount.

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To contribute fast offerings, members give the offering and a completed Tithing and Other Offerings form to a member of the bishopric. Members may also give the offering and form to Aaronic Priesthood holders who are assigned to collect fast offerings each month and who take the offerings to the bishopric. Members should not give other contributions to these Aaronic Priesthood holders. For more information about Aaronic Priesthood holders collecting fast offerings, see page 186 in Book 2.

Members should contribute fast offerings without designating how the funds should be used. Bishops may not enter into arrangements or make commitments to give a member's fast-offering contribution to an individual or family or to use it for a special purpose that the donor designates.

Guidelines for using fast-offering funds are provided on pages 15-16.

In-Kind Donations, Including Tithing

The Church normally discourages paying tithing in kind. It is preferable for members to dispose of the property themselves and then pay tithing in cash. However, the payment of tithing in kind may be accepted in certain cases and may be a common practice in some areas of the world.

The Church accepts (1) stocks, bonds, or other securities that are marketable immediately and (2) some marketable real estate. Before accepting these contributions, local leaders should receive approval from the administration office. If members want to contribute any other items, the bishop should clear it with the stake president. The stake president should contact the administration office for approval before authorizing the bishop to accept the items.

Missionary Funds

Financing Missionary Service

See pages 82-83.

Contributing to Missionary Funds

Members may use the Tithing and Other Offerings form to contribute to Church missionary funds.

Contributions to the ward missionary fund are used to assist missionaries from the ward or stake.

Contributions to the General Missionary Fund help spread the gospel in ways such as providing partial financial support for missionaries who need it to supplement contributions from themselves, their family, and the ward missionary fund.

Contributions to the General Book of Mormon Fund are used to provide copies of the Book of Mormon for full-time missionaries as needed.

Stake presidents and bishops should send missionary funds and other funds that exceed reasonable stake and ward needs to the General Missionary Fund at the administration office. Bishops or individuals may contact the administration office for further information about contributions to the General Missionary Fund.

LDS Foundation

The LDS Foundation is a department of the Office of the Presiding Bishopric that correlates, encourages, facilitates, and accepts voluntary philanthropic contributions to the Church and its related organizations and activities. Assistance in making contributions may be obtained by contacting LDS Foundation at Church headquarters.

Humanitarian Aid

Church humanitarian work assists people in dire need throughout the world. Members who desire to make contributions to Church humanitarian aid may use the Tithing and Other Offerings form. Members should enter the contribution on the "Other" line and designate that it is for humanitarian aid. These contributions should be remitted according to instructions provided by the administration office.

Contributions Not to Be Refunded

When tithes and other offerings are given to the Church, they belong to the Lord, to whom they are consecrated. These offerings include all contributions to the ward and general missionary funds. The essence of all such contributions is that they are freewill offerings, made without reservation of purpose, retention of control, ownership in any form, or expectation of any benefit by the donor other than the Lord's blessings.

It is therefore improper to refund missionary or other contributions to contributors. To do so not only violates the spirit of freewill offerings but also may cause legal and income tax complications in some countries for both the contributor and the Church.

Confidentiality of Tithing and Other Offerings

The amount of tithing and other offerings paid by a member is confidential. Only the bishop and those who are authorized to handle such contributions should know the amount. Stake presidents and bishops are not to announce the total amount of tithing received.

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If necessary, the bishop may tell the elders quorum president or high priests group leader whether individual members of their quorum or group are full-tithe payers, contributors to the tithing funds, or exempt. Quorum presidents and group leaders should keep this information confidential.

Handling and Accounting for Funds

The stake president and bishop ensure that all Church funds are properly handled and accounted for according to current financial instructions. General principles are outlined in the following paragraphs.

Receiving Tithing and Other Offerings

The Lord has given bishops the sacred trust of receiving and accounting for the tithes and other offerings of the Saints (see D&C 119; 42:30-33).

Only the bishop and his counselors may receive tithes and other offerings. Under no circumstances should their wives, other members of their families, clerks, or other ward members receive these contributions. The only exception is when Aaronic Priesthood holders are assigned to collect fast offerings. These brethren give the fast offering envelopes directly to a member of the bishopric.

Ward members should give contributions to a member of the bishopric in a sealed envelope with a properly completed Tithing and Other Offerings form enclosed. Church members should not place their tithes and other offerings in a contribution box. Checks should be made payable to the ward, not to the bishop or the Church.

Verifying Tithing and Other Offerings

Contribution envelopes should be opened and verified on Sunday, except during tithing settlement, when they are opened and verified on the day they are received. Two persons-a member of the bishopric and a clerk, or two members of the bishopric should open each envelope together to verify that the funds enclosed are the same as the amount written on the Tithing and Other Offerings form. They resolve any differences between the funds and the written amounts as soon as they can contact the contributor.

Depositing Tithing and Other Offerings

The persons who verify contributions prepare a bank deposit. A member of the bishopric makes the deposit. He should be accompanied by another person, usually a clerk. If a night depository is available, the deposit is made on the same day. The deposit should not be made later than the following day.

Stake presidents and bishops must be certain that Church funds are not deposited to the account of an individual or mixed with personal funds.

Safeguarding Church Funds

Members who are responsible for Church funds must never leave them in the meetinghouse overnight or leave them unattended at any time, such as during meetings and activities.

Receipting Tithing and Other Offerings

The administration office sends stakes and wards instructions for issuing receipts for tithing and other offerings.

Receipts to members who donate in kind (noncash tithing and other offerings) are issued only by the administration office. These receipts show no monetary value for the items contributed.

Receiving and Managing Budget Allowance Funds

Managing Stake and Ward Checking Accounts

Each stake normally has one general checking account. The stake president manages this account, though his counselors and clerks may assist him. If the stake has a physical facilities account, the administration office will provide instructions for using it.

All ward funds are handled through one checking account. The bishop manages this account, though his counselors and clerks may assist him.

Each check must have two authorized signatures. Usually the stake president, his counselors, and the clerk assigned to finances are authorized to sign checks for the stake account. Usually the bishop, his counselors, and the clerk assigned to finances are authorized to sign checks for the ward account.

Although counselors may be authorized to sign checks, they should not do so unless the stake president or bishop has approved the expenditure.

A check should not. be signed until it is filled out completely.

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The stake president or bishop should have the bank mail the statement for the stake or ward checking account directly to his home, not to the meetinghouse or a clerk's home. He should open each bank statement promptly, review it, and give it to the clerk to be reconciled. The stake president or bishop then reviews and signs the reconciliation. Finally, he reviews the monthly financial statement or report and ensures that it is reconciled.

Checkbooks and blank checks should be stored in a locked file or cabinet. They must not be left unattended when they are not locked securely. If any blank checks are missing, the stake president or bishop immediately reports the numbers of these checks to the administration office. He also asks the bank to stop payment on the missing checks.

Stakes and wards may not have savings accounts. Quorums, auxiliary, and Scout organizations may not have checking accounts, savings accounts, or petty cash funds. Their budgeted expenses are all paid through the stake or ward checking account.

Keeping Financial Records

Stakes and wards should keep current, accurate financial records. These records can help stake presidents and bishops account for and protect the sacred funds of the Church. These records are also necessary for preparing budgets, managing the budget allowance, and providing information to members on their financial contributions.

Budget and Expenditures

Stake and Ward Budgets

Every stake and ward prepares and operates on a budget. The stake president manages the stake budget, and the bishop manages the ward budget, though each may assign a counselor to supervise it under his direction.

No stake or ward expenses may be incurred or paid without the presiding officer's authorization. Stake presidents regularly review ward expenditures with each bishop as part of the monthly priesthood interview.

Stake presidencies and bishoprics should begin preparing budgets well before the beginning of each calendar year as follows:

It is not necessary to call for a sustaining vote to accept the budget.

Budget Allowance

The budget allowance provides general Church funds to pay for the activities and programs of stakes and wards. It eliminates the need to receive budget contributions from members. Faithful payment of tithes has made the budget allowance possible.

Allocation of Budget Allowance Funds

The administration office allocates budget allowance funds to each stake based on sacrament meeting attendance. The stake presidency allocates some of these funds to the stake and most of them to the wards. The stake president ensures that the stake and wards are funded fairly and adequately as permitted within the budget allowance.

When allocating funds, the stake president considers each ward's special needs, such as large numbers of youth. He works with bishops in a unified, cooperative manner. If unforeseen changes occur that may alter original budget allowances, he makes sure that fair adjustments are made.

The bishop oversees the allocation of budget allowance funds in the ward. He ensures that ward organizations are funded fairly and adequately.

Priesthood leaders make every effort to ensure that the level of budget allocations and activities for the Young Men and Young Women organizations are equitable.

General Principles and Guidelines

Most questions about the budget allowance can be answered by applying the basic principles that are outlined below. The stake presidency and bishopric should teach these principles to priesthood and auxiliary leaders.

The budget allowance was created to reduce the financial and time burdens on members. If necessary, priesthood and auxiliary leaders should reduce and simplify activities. Activities should have little or no cost, should build testimonies, and should provide meaningful service to others.

Stake or ward budget allowance funds should be used to pay for all Church activities, programs, and supplies. Members should not pay fees to participate (exceptions may be made for annual camps and enrichment activities as explained on pages 138-39). Nor should they provide materials, supplies, rental or admission fees, or long-distance transportation at their own expense. Activities in which many members provide food may be held if they do not place undue burdens on members.

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Members who want to contribute additional funds to the Church may not designate them for the stake or ward budget. Instead, leaders should encourage them to contribute the funds to fast offerings, missionary funds, or general Church funds.

Stake presidents and bishops make sure budget allowance funds are spent wisely. Funds should be used to bless people and further gospel purposes. Leaders also ensure that all expenditures are within the allowance. The success of the budget allowance depends on the efforts of local priesthood leaders to monitor and control Church finances and expenses.

Unneeded budget allowance funds should not be spent. Unused ward funds are returned to the stake. Unused stake funds are returned to the administration office. Some unspent funds may be retained if they are needed for specific activities that are planned for the next year. Some unspent funds may also be retained to cover budget checks that will not clear the bank until the next year.

For the budget allowance to succeed, it is important that Member Progress Reports are accurate and on time. Also, each ward's Annual Tithing Status Report for the previous year should be (1) reconciled to deposits made by the ward and (2) sent to the administration office each year as instructed by that office.

The budget allowance does not include expenses for building construction, maintenance, utilities, and computers. These expenses are paid from general Church funds according to current guidelines.

For more details about the budget allowance, see the current budget allowance instructions, which are available from the administration office.

Funding Special Activities and Equipment

Scouting

Scouting activities and awards for young men ages 8 through 17 are funded from the budget allowance. If necessary, an exception may be made for one annual Scout camp or similar activity as explained in "Annual Camps or Similar Activities" on this page.

Where Scouting is authorized, the Church pays all or part of the following registration fees:

Registration and chartering expenses are paid from the stake general checking account. The Church provides these funds in addition to the budget allowance.

Annual Camps or Similar Activities

The Church encourages one annual extended Scout camp or similar activity for young men ages 12 through 17, and one annual camp or similar activity

for young women ages 12 through 17. The Church also encourages one annual day camp for Scouts ages 8 through 11 (see the Scouting Handbook, page 4).

If there are not sufficient stake and ward budget funds, leaders may ask participants to pay for part or all of this one annual camp or similar activity by individually earning their own money. If funds from participants are insufficient, the stake president or bishop may authorize group fund-raising activities that comply with the guidelines on page 139.

In no case should the expenses or travel for these camps or activities be excessive. Nor should the lack of personal funds prohibit a member from participating.

Equipment for Annual Camps

If possible, equipment that the unit needs for annual camps is purchased with budget allowance funds. If these funds are insufficient, the stake president or bishop may authorize group fund-raising activities that comply with the guidelines on page 139. Such activities may not be used to purchase equipment or uniforms for individuals. Nor may they be used to fund other activities.

Youth Conferences

Youth conferences should be funded from the budget allowance. Members should not be asked for more money.

Optional Enrichment Activities

Units may sponsor optional enrichment activities that are presented by Church-related entities. Such activities include the Know Your Religion Series, Church university performance groups, and periodic major cultural events. Members may be charged a modest fee to defray the costs of such events if the program is entirely optional, the cost is not burdensome, and the event is not used to raise funds. Budget funds may be used to help those who want to attend but are unable to pay.

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Fund-Raising

Fund-raising activities are not normally approved because expenses for stake and ward activities are paid with budget allowance funds. As an exception, a stake president or bishop may authorize group fund-raising activities only when necessary to help pay for annual camps and equipment as outlined on page 138.

If a fund-raising activity is held, it should provide a meaningful value or service. It should be a positive experience that builds unity.

Contributions to fund-raising activities should be voluntary. Priesthood leaders should take special care to ensure that members do not feel obligated to contribute.

Stakes and wards that sponsor fund-raising activities should not advertise or solicit beyond their boundaries. Nor should they sell products or services door-to-door.

Examples of fund-raising activities that are not approved include:

Any exceptions to these instructions must be approved by the administration office.

The Friends of Scouting fund drive in the United States will continue as a separate, voluntary solicitation.

Audits

Stake Audit Committee

The stake president appoints a stake audit committee consisting of one of his counselors as chairman and two other stake members who understand financial matters. Committee members generally should not sign stake checks or otherwise be involved in stake financial record keeping.

Stake Auditors

The chairman of the stake audit committee calls at least two qualified stake auditors. They require approval by the high council, but they are not sustained and usually are not set apart.

The Auditing Process

Stake auditors audit financial records of the stake, wards, and branches twice each year. Auditors ensure that tithing and other contributions are properly recorded, Church funds are properly accounted for and protected, and financial records are complete and accurate. The unit's presiding officer should be available to answer questions during audits.

The stake audit committee reviews finished audits. The chairman signs the audit report and ensures that a copy is sent to the administration office to arrive by the due date. He also ensures that any exceptions disclosed by an audit are promptly corrected.

Embezzlement of Church Funds

If a person has embezzled Church funds, the stake president or the chairman of the stake audit committee should be notified promptly. He notifies the Church Auditing Department (or the area financial controller if the unit is outside the United States and Canada). The Auditing Department (or area financial controller) sends a loss report form to the stake president or the chairman of the audit committee. He makes sure the form is properly completed and submitted.

If a major misuse of funds is discovered, the stake president or chairman of the audit committee also notifies the Area Presidency.

Stake Clerk

The stake clerk ensures that other clerks in the stake and wards are properly instructed in financial record keeping. He should be aware of audit findings. He also helps clerks promptly resolve any problems disclosed by audits.

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For More Information

More information on audit committees, auditors, and audit procedures is included on the stake and ward audit report forms and instructions. Stake audit committees and auditors may direct questions to the Church Auditing Department (or area financial controller).

Taxes

The tax information in this section applies only in the United States and Canada. If priesthood leaders in the United States and Canada need additional information they should contact:

Church Tax Division Finance and Records Department Floor 22 50 East North Temple Street Salt Lake City, UT 84150-3620 Telephone: 1-801-240-3003 or 1-800-453-3860, extension 3003

Priesthood leaders outside the United States and Canada should contact the administration office to resolve questions on taxes.

Tax-Exempt Status

The Church normally is exempt from paying sales, property, income, and other taxes because it is a religious organization. Church buildings and other property are to be used for the purposes of worship, religious instruction, and other Church-related activities. Facilities are not to be used for political, business, or investment purposes as outlined on pages 153-54. To do so violates laws that permit tax exemption of Church property.

It is important that stake and ward leaders follow these guidelines to preserve the Church's tax-exempt status. If one stake or ward misuses the Church's tax-exempt status, other Church units could be affected.

Sales and Use Tax

Sales and use tax laws and how they apply to the Church vary from state to state. Leaders should check local tax laws to see whether the Church is exempt or must pay such taxes.

Property Tax

The Church Tax Division files all property tax exemptions and pays all required property taxes. No action is required by local leaders.

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