Monday, January 25, 2010

Principle of Financial Management II

Salary and Allowance

The great ambiguity of these 2 terms are often intertwined together, that sometimes we mix the two term up. In my opinion, an allowance is provided on top of any assistance the church gives to its staff.

For example, a full-time staff could choose Cash Salary or simply Church support as a basic remuneration. As both would undoubtedly serve the same function.

Salary is given so that people can use the money to pay for Food, lodging, transport and all daily necessities, if the church provide already provide lodging, transport and reimbursement of food then its considered salary. And amount given beyond these would be termed an allowance.

In my opinion, it is always good to separate Church and personal items as these would create better accountability. As pastor or full-time staff, we should always consider when doing reimbursement if the items are for Church of personal.

Some of the most common gray area during Ps PN days were reimbursement for entertainment expenses, petrol. For smaller churches where church would support the rental of church office and staff housing, it is always important to try and keep the items black and white.

When we buy items and reimbursed it under church we need to consider if the item used is mainly for the church for their own family and persnal use. If church buys a car or van, is the vehicle used more for personal and family purpose or used mainly for church purpose.

My recommendation is always to keep church and personal vehicle separate so that people cannot say we are abusing our authority. Unless the Vehicle is given to the staff and is not part of church repsonsiblity then Staff becomes responsible for its maintenance and insurance.

The issue in Hope is that since everyone is also serving almost at the same capacity as the pastor meaning going to meet people for shepherding, meetings, spending money or their own sheep. If the full-time staff starts to claim reimbursement then everyone in Church would therefore by precedent be able to claim, unless of course, only full-time staff do the shepherding and follow-up.

Thus i think one of the biggest change we must consider is to keep money as black and white as possible so that no one can say we are abusing our authority.

1 comment:

janira3c5 said...

Amharic Ten-a-yee-still-ing!