34.

Finances and Audits

34.0

Introduction

Tithes and offerings allow the Church to pursue God’s work of salvation and exaltation (see 1.2). These funds are sacred. They represent the sacrifice and faith of members of the Church (see Mark 12:41–44).

Some of the uses of tithes and offerings in supporting the Lord’s work include:

• Building and maintaining temples, meetinghouses, and other Church buildings.

• Supporting the activities and operations of the Church and its local congregations.

• Sharing the gospel throughout the world.

• Supporting the programs of the Church, such as education and family history.

• Providing food, shelter, and other necessities to people in need.

Stake presidents and bishops have a sacred obligation to oversee Church funds (see Doctrine and Covenants 72:9–10). These funds should be used only by authorized members for authorized Church purposes. They must be carefully accounted for and protected.

34.1

Stake Financial Leadership

34.1.1

Stake Presidency

The stake president has the following responsibilities for stake finances. He delegates some of this work to his counselors and clerks.

The stake president:

• Teaches and inspires members to pay a full tithe and give generous offerings (see 34.3).

• Ensures that stake funds are properly handled and accounted for (see 34.5).

• Reviews the financial statement each month and ensures that any issues are resolved promptly.

• Ensures that bishoprics, organization leaders, and clerks learn their responsibility for sacred Church funds.

• Prepares and manages the annual stake budget (see 34.6).

• Ensures that stake budget allowance guidelines are followed (see 34.6.2).

• Regularly counsels with each bishop to discuss the ward’s finances.

• Verifies that each ward receives members’ tithing declarations annually.

• Ensures that passwords to access Church financial systems are never shared.

• Ensures that the stake audit committee is organized and functioning properly (see 34.7.1).

• Is available to answer questions during audits of stake financial records (see 34.7).

• Reviews audits of stake and ward financial records and ensures that any issues are resolved promptly (see 34.7).

• Ensures that the stake and wards comply with all applicable tax laws (see 34.8).

34.1.2

Stake Clerks

The stake president assigns the stake clerk or an assistant stake clerk to help with stake financial record keeping. Clerks carefully follow current policies to safeguard Church funds and ensure that Church records are accurate.

The clerk has the following responsibilities:

• Record and deposit any funds received with a member of the stake presidency.

• Review the financial statement each month and ensure that any issues are resolved promptly.

• Help the stake presidency prepare the annual stake budget (see 34.6.1 and 34.6.2).

• Verify that each ward has submitted the annual tithing declaration report.

• Participate in financial audits by stake auditors and take corrective actions if needed (see 34.7).

• Assist bishoprics with training ward clerks.

Clerks should hold the Melchizedek Priesthood and have a current temple recommend. For more information about calling stake clerks, see 33.3.2 and 33.3.3.

34.2

Ward Financial Leadership

34.2.1

Bishopric

The bishop has the following responsibilities for ward finances. He delegates some of this work to his counselors and clerks.

The bishop:

• Teaches and inspires members to pay a full tithe and give generous offerings (see 34.3).

• Ensures that ward funds are properly handled and accounted for (see 34.5).

• Reviews the financial statement each month and ensures that any issues are resolved promptly.

• Ensures that organization leaders and clerks learn their responsibility for sacred Church funds.

• Prepares and manages the annual ward budget (see 34.6).

• Ensures that ward budget allowance guidelines are followed (see 34.6.2).

• Meets with ward members annually to receive their tithing declaration.

• Ensures that passwords to access Church financial systems are never shared.

• Is available to answer questions during audits of ward financial records and ensures that any issues are resolved promptly (see 34.7).

34.2.2

Ward Clerks

The bishop assigns the ward clerk or an assistant ward clerk to help with ward financial record keeping. Clerks carefully follow current policies to safeguard Church funds and ensure that Church records are accurate.

The clerk has the following responsibilities:

• Record and deposit any funds received with a member of the bishopric.

• Review the financial statement each month and ensure that any issues are resolved promptly.

• Help the bishopric prepare the annual ward budget (see 34.6.1 and 34.6.2).

• Ensure that members have access to their statements of contributions and assist as needed.

• Help the bishop prepare and record tithing declarations.

• Participate in financial audits by stake auditors and take corrective actions if needed (see 34.7).

Clerks should hold the Melchizedek Priesthood and have a current temple recommend. For more information about calling ward clerks, see 33.4.2 and 33.4.3.

34.3

Contributions

Church leaders teach members the principles of tithes and other offerings and encourage members to live these principles. People who are not members of the Church may also make contributions. However, only members of the Church may pay tithing.

Members are encouraged to make their contributions online where possible (see donations.ChurchofJesusChrist.org). Members may also give their contributions and a completed Tithing and Other Offerings form to the bishop or one of his counselors (see 34.5.2). If members use a check, it should be payable to The Church of Jesus Christ of Latter-day Saints.

34.3.1

Tithing

Tithing is the donation of one-tenth of one’s income to God’s Church (see Doctrine and Covenants 119:3–4; interest is understood to mean income). All members who have income should pay tithing.

The Lord’s covenant people have lived the law of tithing since ancient times (see Genesis 14:18–20; Leviticus 27:30–32). The Lord has said, “The tithing of my people … shall be a standing law unto them forever” (Doctrine and Covenants 119:3–4).

Tithes are holy to the Lord, and members honor Him by paying tithing. This is an expression of faith in God and His promises. Those who pay tithing receive this promise from the Lord: “Prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it” (Malachi 3:10).

34.3.1.1

Use of Tithing Funds

Tithing donations are always used for the Lord’s purposes, as directed by the Council on the Disposition of the Tithes (see Doctrine and Covenants 120). Some of these purposes are outlined in 34.0.

34.3.1.2

Tithing Declaration

The bishop meets with each member during the last few months of each year to receive his or her tithing declaration. In rare circumstances when the bishop is absent, the stake president may authorize one of the bishop’s counselors to fulfill this responsibility.

All members are invited to meet with the bishop to:

• Declare to the bishop their status as tithe payers.

• Ensure their contribution records are accurate.

Whenever possible, all members of a family, including children, should attend together.

During tithing declaration, the bishop expresses appreciation to members for their faithfulness. He also teaches the principle of tithing, encourages members to give a generous fast offering, and discusses other relevant matters.

Instructions for tithing declaration are provided by Church headquarters or the assigned area office.

34.3.2

Fast Offerings

Church leaders encourage members to live the law of the fast. This includes giving a generous fast offering (see 22.2.2).

In some wards, the bishop may authorize Aaronic Priesthood holders to collect fast offerings. In deciding this, the bishop considers the number of Aaronic Priesthood holders available, their safety, and the blessing to members who might not otherwise contribute.

Priesthood holders should go in pairs when gathering fast offerings. They deliver fast offerings promptly to a member of the bishopric.

Members should not give other contributions, such as tithing or other offerings, to those who gather fast offerings.

Guidelines for using fast-offering funds are provided in 22.5.2.

34.3.3

Missionary Funds

Contributions to the ward missionary fund are used primarily to meet the contribution commitments of full-time missionaries from the ward. Excess funds in a ward may be used to meet the commitments of other missionaries in the stake. Excess funds in a stake may be used for other stakes in the coordinating council as directed by the Area Seventy who presides over the council.

Ward missionary funds should not be sent directly to individual missionaries. These funds should not be used for any missionary activities in the ward or stake.

Contributions to the General Missionary Fund are used by the Church in its overall missionary efforts.

Stake presidents and bishops should send missionary funds that exceed reasonable stake and ward needs to the General Missionary Fund at Church headquarters or to the area office.

For more information about missionary funds and financing missionary service, see 24.3.4.

34.3.4

Additional Contributions

Members may contribute financially to additional approved categories. If donors are using the Tithing and Other Offerings form, they write the category name in the “Other” section of the form.

Stakes and wards should not establish categories in the “Other” section to request, collect, or spend funds for projects that are not approved by the Area Presidency. For a list of approved categories, members should contact the ward clerk.

34.3.5

Philanthropies

Philanthropies of The Church of Jesus Christ of Latter-day Saints is a department of the Office of the Presiding Bishopric. This department coordinates and facilitates voluntary philanthropic contributions to the Church and its affiliated charities and activities, other than tithing and other offerings. Assistance in making contributions may be obtained by contacting the Philanthropies office:

Philanthropies

1450 North University Avenue

Provo, UT 84604-6080

Telephone: [phone] or 1-800-525-8074

Email: [e-mail]

34.3.6

In-Kind Donations, Including Tithing

The Church normally discourages making in-kind contributions (non-monetary) as tithing and other offerings. It is preferable for members to dispose of the property themselves and then pay tithing and other donations monetarily. However, in-kind donations may be accepted in certain cases. Such donations may be a common practice in some areas of the world.

The Church accepts (1) stocks, bonds, or other securities that are immediately marketable and (2) some marketable real estate. Members should email [e-mail] for instructions on how to initiate these in-kind donations. If members want to contribute other items, the stake president contacts Church headquarters or the area office for approval before authorizing the bishop to accept them.

Receipts to members who make in-kind donations are issued only by Church headquarters or the area office.

34.3.7

Contributions Cannot Be Refunded

When tithes and other offerings are given to the Church, they belong to the Lord. They are consecrated to Him. All such contributions are freewill offerings. They are 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.

Stake presidents and bishops inform those who contribute tithes and offerings that these contributions cannot be refunded. Nor can prepaid missionary funds be refunded.

34.4

Confidentiality of Tithing and Other Offerings

The amount of tithing and other offerings paid by a donor is confidential. Only the bishop and those who are authorized to handle or view these contributions should have access to this information. Stake presidencies, bishoprics, and clerks should never inappropriately discuss a member’s tithing status. Nor should they discuss the total amount of tithing or other offerings received.

34.5

Handling Church Funds

The stake president and bishop ensure that all Church funds are properly handled. This is a sacred responsibility of their callings. General principles are outlined in the following sections. Bishoprics and clerks review the video “Sacred Funds, Sacred Responsibilities” at least once a year.

34.5.1

Companionship Principle

The companionship principle requires two persons—a member of the bishopric and a clerk, or two members of the bishopric—to be actively involved when recording and disbursing Church funds. This principle is essential to safeguarding sacred funds and protecting Church leaders.

Leaders should protect and never share their passwords (see 33.9.1.1).

34.5.2

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 Doctrine and Covenants 42:30–33; 119). 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 (see 34.3.2).

Church leaders and members should not leave donations unattended.

34.5.3

Verifying and Recording Tithing and Other Offerings

Contributions should be verified and recorded on the Sunday they are received. A member of the bishopric and a clerk, or two members of the bishopric, open each envelope together. They verify that the funds enclosed are the same as the amount written on the Tithing and Other Offerings form. They record each donation properly. If the funds and the written amount differ, they contact the donor as soon as possible to resolve the discrepancy.

34.5.4

Depositing Tithing and Other Offerings

A deposit should be prepared after ensuring the amounts recorded match the funds received.

Where a 24-hour bank depository is available, the bishopric member and another Melchizedek Priesthood holder deposit the funds in the bank on the same day the funds are opened and verified.

Where a 24-hour bank depository is not available and the bank is closed on Sunday, the bishop designates a Melchizedek Priesthood holder to make the deposit the next business day. Normally this person should be a member of the bishopric. He is accountable for these funds. He should:

• Ensure that the funds are kept secure until they are deposited.

• Obtain a deposit receipt showing the date and the amount of the deposit.

Additionally, a bishopric member and a clerk, or two members of the bishopric, should complete the following procedure on the next Sunday before processing donations for that day:

• Compare the deposit receipt to the previous week’s deposit records to verify that the correct amount was deposited.

• Sign the deposit receipt and file it with the previous week’s donation information.

34.5.5

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.

34.5.6

Donation Statements

Donor Statements of Contributions are available to all members at donations.ChurchofJesusChrist.org. Leaders should encourage members to regularly review their donor statements. Where applicable, official tax statements are also available at donations.ChurchofJesusChrist.org, from the local unit, or from the area office.

34.5.7

Managing Stake and Ward Payments

All stake funds are managed in Church financial systems. The stake president manages the stake finances. His counselors and clerks may assist him. The counselor who serves as chairman of the stake audit committee generally should not be involved in stake financial record keeping.

All ward funds are managed in Church financial systems. The bishop manages the ward finances. His counselors and clerks may assist him.

Payments are generally made by electronic funds transfer or by check. In some areas, units may be approved to use bank cards.

No stake or ward expenses may be incurred or paid without the presiding officer’s authorization.

Two authorized leaders must approve each payment. One of them must be a member of the stake presidency or bishopric. Although counselors may be authorized to approve payments, the stake president or bishop must review each payment. Leaders should not approve a payment to themselves.

The stake president’s written approval is required before a bishop may use fast offerings or approve a bishop’s order for himself or his family. Written approval from a member of the Area Presidency is required before a bishop may use fast offerings or approve a bishop’s order for the stake president or his family. See 22.5.1.2 for guidelines.

A member requesting reimbursement provides a physical or electronic copy of any receipts or invoices. He or she also includes the purpose, amount, and date of the purchase.

If funds are advanced, the member submits a payment request form, noting the purpose, amount, and date. After the expense has been paid, the member then (1) provides receipts or invoices for the funds spent and (2) returns any unspent funds. Returned funds should be redeposited.

Authorized leaders and clerks should not approve payments without carefully reviewing the expense and receipts or invoices.

Stakes and wards may not open their own bank accounts or maintain a petty cash fund.

34.5.7.1

Electronic Payments

If the stake or ward uses electronic payments, members are encouraged to enter their personal bank account details in the Expense Reimbursement Account section under Settings in Online Donations at donations.ChurchofJesusChrist.org. The ward or stake should never keep physical or electronic copies of members’ bank account information details.

34.5.7.2

Checks

If the stake or ward uses checks, a check should not be signed until it is filled out completely. 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 those checks to Church headquarters or the area office.

34.5.7.3

Payment Cards

If the stake or ward uses payment cards for local unit expenses, they may be used for point-of-sale transactions or for withdrawing cash. The card transactions and cash withdrawals are automatically uploaded to Church financial systems. All uses of the card should be promptly recorded. If these uses are not recorded, the card may be disabled.

All payment card balances should be brought to zero at least annually.

34.5.8

Cash Boxes

The area office provides specific guidelines for units that do not have access to a Church-provided bank account.

34.5.9

Keeping Financial Records

Each stake and ward should keep current, accurate financial records. These records help stake presidents and bishops account for and protect sacred Church funds. Accurate records are also necessary for:

• Preparing budgets.

• Managing the budget allowance.

• Providing information to members about their financial contributions.

• Responding to audits.

For information about the use and retention of records and reports, clerks should refer to instructions from Church headquarters or the area office. Financial records should be retained for at least three years plus the current year. Local laws may require longer retention periods.

34.6

Budget and Expenditures

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

If necessary, leaders should reduce and simplify activities to stay within the allowance. Most activities should be simple and have little or no cost.

34.6.1

Stake and Ward Budgets

Every stake and ward prepares and operates an annual budget. The stake president manages the stake budget, and the bishop manages the ward budget. They may assign a counselor to supervise the budget under their direction. They may also assign a clerk to help prepare and monitor the budget.

Stake presidencies and bishoprics begin preparing budgets well before the beginning of each calendar year. Guidelines are listed below:

• Review the amounts spent during the previous year to make sure that recurring expenses are considered.

• Ask organizations to estimate their budget needs in detail.

• Compile the budget using approved budgeting practices. Budgets should ensure that projected expenses do not exceed anticipated budget allowance funds.

The budget tools included in Church financial systems should be used where they are available.

34.6.2

Budget Allowance

34.6.2.1

Allocation of Budget

Budget funds are allocated quarterly based on attendance in the following categories:

• Sacrament meeting

• Young men

• Young women

• Primary children ages 7–10

• Young single adults

It is important to report attendance accurately and on time (see 33.5.1.1).

Before each quarterly allocation, the stake president receives information on the amount to be distributed. He then determines how much of the funds are allocated to the wards. He works with bishops in a unified, cooperative manner to ensure the stake and wards are funded fairly and adequately. If unforeseen changes occur that may justify altering original budget allocations, the stake president makes sure that fair adjustments are made.

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

Priesthood leaders ensure that the budget allocations and activities for young men and young women are equitable and that allocations for children in Primary are sufficient.

34.6.2.2

Appropriate Use of Budget

Stake presidents and bishops make sure budget allowance funds are spent wisely. Funds should be used to bless people and to further gospel purposes. Leaders also ensure that all expenditures are within the allowance.

Stake and ward budget funds should be used to pay for all activities, programs, manuals, and supplies. Members should not usually pay to participate in activities. Nor should they provide materials, supplies, rental or admission fees, or long-distance transportation at their own expense. Members may provide food if doing so is not a burden (see 20.6.1).

Members who want to contribute additional funds to the Church may not designate them for the stake or ward budget. Instead, leaders encourage them to contribute the funds to fast offerings, missionary funds, humanitarian aid, or other authorized donation categories.

Expenses for building construction, maintenance, telephones, utilities, computers, and priesthood leader travel are paid from general Church funds according to current guidelines.

34.6.2.3

Excess Budget

Excess budget allowance funds should not be spent. Excess ward funds should be returned to the stake. Excess stake funds are returned to the Church.

As an exception, stakes and wards may retain some unspent funds if they are needed for specific activities that are planned for the next year, such as a youth conference. However, significant portions of the stake or ward budget allowance should not be retained from one year to the next.

34.6.3

Funding Special Activities and Equipment

34.6.3.1

Stake and Multistake Activities

Local leaders are encouraged to hold stake and multistake activities that provide opportunities to develop unity and friendships, especially among youth and young single adults. Leaders ensure that they budget adequate funds to support an appropriate number of stake and multistake activities.

Funding for most multistake activities comes from the budget funds of the participating stakes. Funding for area activities may come from area or Church headquarters budgets when approved.

34.6.3.2

Special Activities and Equipment

For information about special activities and equipment, see chapter 20.

34.7

Audits

34.7.1

Stake Audit Committee

The stake president appoints a stake audit committee. This committee ensures that stake and ward finances are handled according to Church policy. It consists of one of the stake president’s counselors as chairman and two other stake members who understand or can be trained in financial matters. These brothers or sisters should have current temple recommends.

The counselor who serves as chairman generally should not approve payments or be involved in stake financial record keeping.

Committee members should not be stake auditors. Nor should they do stake or ward financial record keeping.

34.7.2

Stake Auditors

The stake president or his counselor who is chairman of the stake audit committee calls at least two stake auditors. These brothers and sisters should have current temple recommends. If possible, they should be experienced in accounting or auditing. They should be approved by the stake presidency and high council. However, they are not sustained. The stake president determines whether they are set apart.

High councilors may also serve as stake auditors. However, the stake clerk and assistant stake clerks may not be called as auditors. Those who serve as auditors may also hold other callings.

34.7.3

The Financial Audit

Stake auditors audit financial records of the stake, wards, and FamilySearch centers twice each year. They also audit the financial records of recreational properties once each year. These are opportunities to encourage, support, and kindly train those who have been called to handle the funds of the Lord’s Church.

Auditors ensure that:

• Tithing and other contributions are properly recorded.

• Church funds are properly used, accounted for, and protected.

• Financial records are complete and accurate.

The unit’s presiding officer and the clerk assigned to finances should be available to answer questions during audits.

The stake president and stake audit committee review all audits. After their review, the stake audit committee chairman and stake president sign the audits. Audits may be signed and submitted before all of the exceptions are corrected. The stake president and stake audit committee ensure that any audit exceptions are promptly corrected.

34.7.4

Area Auditors and Assistant Area Auditors

The Area Presidency follows the guidelines in the Guide to the Area Audit Program when calling an area auditor or assistant area auditor.

34.7.5

Loss, Theft, Embezzlement, or Misappropriation of Church Funds

The stake president or chairman of the stake audit committee should be notified promptly if:

• Church funds have been lost or stolen.

• A leader has embezzled or misappropriated Church funds.

The stake president or the chairman of the audit committee notifies the Church Auditing Department. He notifies the area controller if the unit is outside the United States and Canada.

The Church Auditing Department (or area controller) sends a loss report form to the stake president or chairman of the audit committee. Under the direction of the Church Auditing Department (or the area controller), the stake president or chairman of the audit committee ensures that the matter is properly examined. He also ensures that the loss form is properly completed and submitted.

After the examination is complete, if the Church Auditing Department determines that a leader or Church employee has embezzled Church funds or property, membership action should be considered. Guidelines are in 32.6.3.3.

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

34.7.6

Stake Clerk or Assistant Stake Clerk Assigned to Finances

The stake audit committee may assign the stake clerk or the assistant stake clerk assigned to finances to instruct ward leaders in proper financial policy. He also instructs them in procedures related to exceptions disclosed by audits.

34.7.7

For More Information

For more information about audit committees, auditors, and audit procedures, see the Help Center at ChurchofJesusChrist.org. Stake audit committees may direct questions to the assistant area auditor.

34.8

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 more information, they should contact the Tax Administration Division:

Tax Administration

50 East North Temple Street, Room 2276

Salt Lake City, UT 84150-0022

Telephone: [phone] or 1-800-453-3860, extension 2-4405

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

34.8.1

Tax-Exempt Status

The Church is normally exempt from paying sales, property, income, and other taxes because it is a religious organization. Church buildings and other properties are to be used for the purposes of worship, religious instruction, and other Church-related activities. Stake and ward leaders ensure that Church facilities are not used for political, business, or investment purposes as outlined in the examples in 35.5.6.1 and 35.5.6.3. To do so would violate 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.

34.8.2

Sales and Use Tax

Sales and use tax laws and how they apply to the Church vary by country and by state. Leaders contact the Church’s Tax Administration Division or the assigned area office to see if the Church is exempt or must pay such taxes.

34.8.3

Property Tax

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