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The Role of Your Church Board in Providing Financial Oversight
The Role of Your Church Board in Providing Financial Oversight
Consider the value of strong finance and audit subcommittees with specific responsibilities.

Your church should invest in hiring competent accounting personnel to ensure the basic records are well-maintained and accurate. It is also key to train the accounting staff on what information the board needs and how to prepare it accurately and on a timely basis.

What financial information should your board monitor?

No matter who the hands-on designee is, however, ultimately it’s the board’s duty to monitor the church’s financial situation because it holds the fiduciary responsibility for oversight.

So what financial areas should your board monitor? While this isn’t an all-inclusive list, the board should be responsible for:

  • Protecting the overall health of the church by continuously analyzing financial condition and trends
  • Maintaining adequate levels of reserves
  • Safeguarding investments
  • Ensuring internal controls are in place to prevent fraud and protect assets

The board should also pay careful attention to various financial ratios and measurements,* seeking to answer questions like these:

  • Are we using our financial resources as efficiently as possible?
  • How does our church compare with similar churches?
  • What financial indicators should we monitor, and how?
  • Are we financially healthy?

*Editor’s note: For specific help monitoring and measuring key financial ratios, see these articles by CPA and editorial advisor Vonna Laue: “Using Comparative Ratios to Improve Church Financial Health,” “How to Monitor Your Church’s Financial Health,” “5 Cash Flow Ratios and Measures Your Church Must Monitor,” “4 Income and Giving Ratios Your Church Should Monitor,” “4 Expense Ratios and Measurements Your Church Should Monitor,” “6 Debt Ratios and Measurements Your Church Should Monitor.” The ratios and measurements in Laue’s article are based on metrics developed for CapinCrouse’s Church Financial Health Index.

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December 10, 2018



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