Is approval needed on any unbudgeted items?

by Deb
(Ohio)

Our Ministry Council has no policy on how to manage unbudgeted items and wondered if anyone has a guideline. Do you have a maximum amount that you will let "slide through" without the need for approval? And if you have a guideline in place, when you do have an expense that is over the amount, do you require a majority or unanimous vote?

We do not have a Pastor Discretionary Fund, and wondering if that would suffice for these items should they come in. It's usually the Pastor who has spent (or wants to spend) money on an unbudgeted expense.

Thank you.

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I don’t Skin Cats
by: TGO

There’s More than 1 way, (but I don't Skin Cats).

But there are things to consider/keep in mind.

PROBLEM: The budget was approved for "X" but you really couldn’t plan for "y" happening during the year = unplanned Expenses

REMEDIES: (can do one or more)

1) Guess what the cost of a possible (unforeseen) emergency might be and put that number in the budget, call it "contingency". For some its $500, for others it could be $5k. Do you rent? Do you own? "What could go wrong?" & "how much could it cost" are the leading questions. If your boiler is old and bad, if you cant budget for full replacement then its contingent that repairs are needed. You cant plan everything, so combine it with option 2.

2) If your board or leadership can meet and get quorum without a major fuss, approve the item as an authorized expenditure at the next meeting, sure some things need payment before its formally approved, but its an emergency. not to be legalistic, but a responsible congregant or leader might take issue with following policy, but the trustees should be given authority to spend reserves (if you have them) to at least pay the bare minimum of a manor financial obligation for the emergency unbudgeted expenditure.

3) Make sure you have policies in place to guide the leaders and trustees, but still give them discretion, checks & balances before money is spent without due care or sharing of knowledge, getting full estimates, etc.



2)

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