Composition, Role, Functions, and Compliance Check List
By Rev. Luan-Vu “Lui” Tran, Ph.D.
1. Where the Finance Committee fits in the local church
In the United Methodist local church, the charge conference is the congregation’s highest administrative body, and the church council is its year-round administrative agency. The finance committee serves these bodies by budgeting, safeguarding, and deploying the church’s monetary resources in support of mission. The Book of Discipline 2020/2024 locates the church council’s general authority at ¶252 and the charge conference’s oversight at ¶¶246–247; the finance committee operates under and reports to these entities.
2. How the Finance Committee is formed
The charge conference elects the finance committee annually. Required membership includes: chairperson; pastor(s); lay member of annual conference; chairs (or representatives) of the church council and the SPRC; a representative of trustees; the stewardship leader; lay leader; financial secretary; treasurer; and business administrator. If the financial secretary, treasurer, or business administrator is a paid employee, they serve without vote. The treasurer and financial secretary must be different people, and they should not be immediate family members; moreover, no immediate family members of appointed clergy may serve as treasurer, finance chair, financial secretary, counter, or in any paid/unpaid role under the committee’s responsibilities in that church.
3. Core mandate and scope of authority
The committee compiles an annual, comprehensive operating budget, submits it to the church council for review/adoption, and “develops and implements plans” to raise sufficient income to meet that budget. It administers funds “according to instructions from the church council” and carries out the council’s directions in guiding the treasurer and financial secretary.
4. Internal controls and handling of money
At least two persons, not from the same household, must count offerings; they work under the financial secretary’s supervision. All funds are recorded, promptly deposited under written procedures set by the committee, and the financial secretary keeps contribution records. These requirements embed separation of duties (receipting, recording, disbursing) as a baseline control.
5. Treasurer’s duties and monthly remittances
The treasurer disburses budgeted monies and other funds as the church council determines, and remits each month any World Service and conference benevolence funds on hand to the conference treasurer. Benevolence contributions must not be diverted to any other cause. The treasurer makes regular, detailed reports to both the finance committee and the church council and is to be adequately bonded.
6. Written financial policies and the annual audit
The committee must adopt written financial policies documenting internal controls and review them annually, reporting to the charge conference. It must also “make provision for an annual audit” of the local church and all its organizations and accounts, and then make a full report to the charge conference. The Discipline defines a local church audit as an independent evaluation of the church’s financial reports, records, and internal controls, and it outlines typical audit procedures and the requirement that auditors be unrelated to those handling funds (or be a CPA/firm).
7. Designated gifts and donor intent
Designated contributions “shall be promptly forwarded according to the intent of the donor and shall not be used for any other purpose.” After the budget is approved, any additional appropriations or budget changes require church council approval, and the committee must annually report all designated funds separate from the current expense budget. These safeguards protect donor intent and transparency.
8. Relationship to other administrative bodies
The finance committee’s budgetary work is accountable to—and requires action by—the church council (adoption/changes) and the charge conference (annual reporting, elections). Trustees manage property, special trusts, and bequests; finance manages operating funds and designated “current ministry” monies, coordinating with trustees when gifts or endowments touch property or long-term funds.
9. Judicial Council guidance that shapes finance practice
9.1 Treasurer reporting & budget/apportionments (JCD 320, 1969)
In affirming a bishop’s ruling, the Council tied the treasurer’s disbursement and reporting duties to both the finance committee’s budget process and the apportionment system. The treasurer must disburse funds as authorized in the local budget adopted by the administrative body and ensure proportional remittance of conference askings as required then by the Discipline—principles that continue under current ¶258.4’s reporting/benevolence provisions.
9.2 World Service/Conference Benevolences cannot be re-directed in full to one side (JCD 63, 1949)
The Judicial Council held that a charge could not designate all combined World Service and Conference Benevolences solely to World Service; funds had to be distributed according to the conference-approved ratio. This early ruling undergirds today’s prohibition on diverting benevolence contributions away from the purposes for which they are given.
9.3 Contributions must be used only for the purposes given (JCD 539, 1984)
Reiterating church policy, the Judicial Council stated that contributions to benevolences “shall not be used for any purposes other than those causes for which given.” This principle supports the strict handling of both benevolence and other designated gifts in local church finances.
9.4 Donor intent is binding for designated gifts (JCD 976, 2003)
The Judicial Council directed that designated funds from a capital campaign be applied to the purpose donors intended, interpreting multiple Disciplinary provisions to require honoring donor restrictions. This decision is expressly cross-referenced in ¶258.4(f) on designated contributions. See JCD 63, 320, 539 (re: reporting and benevolences) and JCD 976 (re: designated gifts).
10. Practical compliance checklist for Finance Committees
- Elections & membership: Ensure annual election by the charge conference and proper composition; separate the offices of treasurer and financial secretary; apply the immediate-family and clergy-family restrictions.
- Budget cycle: Gather all financial askings, compile a full annual budget, submit to church council, and develop plans to resource it; bring any mid-year changes back to the council.
- Cash handling: Use at least two unrelated counters under the financial secretary; deposit promptly; maintain contribution records and disbursement documentation.
- Treasury: Bond the treasurer; remit World Service and conference benevolences monthly; deliver regular, detailed reports to both finance and council.
- Policies & audit: Adopt and annually review written financial policies; arrange an audit of all church accounts and report results to the charge conference
- Designations: Forward designated gifts per donor intent; do not repurpose; maintain and annually report on all designated funds separate from the operating budget.
11. Frequently intersecting questions
Who “controls” the money—the finance committee or the church council?
Finance proposes and administers; the church council adopts the budget, gives directions, and approves additional appropriations/changes.
What if a donor’s designation conflicts with church policy?
Designations must be honored within Disciplinary constraints; funds cannot be diverted, and benevolence gifts follow established ratios and purposes. Work with donors to refine designations that align with mission, policy, and law.
How “formal” must our audit be?
The Discipline defines scope and independence; your audit may be done by an unrelated audit committee or by an independent CPA/firm, with procedures tailored to the church’s size and risk—then reported to the charge conference.
12. Conclusion
Under ¶258.4, the finance committee is the local church’s steward of fiscal integrity—planning for ministry, guarding internal controls, honoring donor intent, remitting connectional funds faithfully, and keeping the church council and charge conference fully informed. Judicial Council rulings reinforce these norms, especially regarding benevolences and designated gifts. When faithfully practiced, this framework finances mission with transparency, accountability, and trust.