Thesis
INTERNAL CONTROTJS IN THE AREA OF FINANCE FOR L0CAL CHURCHES
By Joseph W. Hudson
A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Christian Education Liberty Baptist Seminary January 1984
LIBERTY BAPTIST SEMINARY
THESIS APPROVAL SHEET
Grade
Thesis Mentor
Reader
TABLE OF CONTENTS Chapter I. INTRODUCTION Statement of the Problem . Importance of the Study Purpose of the Study . Preview of the Thesis II. INTRODUCTORY INFORMATION ON INTERNAL CONTROL Definitions and Terminology Purpose of Internal Control Elements of Internal Control . III. SPECIFIC PROCEDURES Cash Receipts Purchasing Cash Disbursements Control for Assets Budget Miscellaneous Control Procedures . IV. RESULTS OF INTERVIEWS WITH CHURCHES Development of Survey Presentation of Survey Data V. ANALYSIS OF DATA
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2
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7
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34 (Property)
39
43
46
52
statistics Analysis of Cash Receipts . Analysis of Purchasing Analysis of Cash Disbursements Analysis of Control Over Assets Analysis of Budget Procedures Analysis of Other Controls Rejection of Thesis statement VI. CONSLUSION
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60
· 61
• • 62
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. 63
(Property) .
64 64 65 65 67
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Appendix BIBLIOGRAPHY .
71
CHAPTER 1 INTRODUCTION Statement of the Problem Currently, a major problem in independent Baptist churches is that the churches are not using proper business methods in the carrying out of the administrative activities of the church. Many leaders in these churches
are reluctant to use good business principles because they are used in secular businesses. Some of these leaders
fail to seek out the proper procedures and, therefore, are ignorant of most good business practices. This writer
sees one business practice, in particular, that has been neglected by these churches. internal controls. That practice is the use of
By Joseph W. Hudson
A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Christian Education Liberty Baptist Seminary January 1984
LIBERTY BAPTIST SEMINARY
THESIS APPROVAL SHEET
Grade
Thesis Mentor
Reader
TABLE OF CONTENTS Chapter I. INTRODUCTION Statement of the Problem . Importance of the Study Purpose of the Study . Preview of the Thesis II. INTRODUCTORY INFORMATION ON INTERNAL CONTROL Definitions and Terminology Purpose of Internal Control Elements of Internal Control . III. SPECIFIC PROCEDURES Cash Receipts Purchasing Cash Disbursements Control for Assets Budget Miscellaneous Control Procedures . IV. RESULTS OF INTERVIEWS WITH CHURCHES Development of Survey Presentation of Survey Data V. ANALYSIS OF DATA
• 49
Page
.
· · · · · · · · ·
1
2
3
4
6
7
.
· 11
18
· 29
34 (Property)
39
43
46
52
statistics Analysis of Cash Receipts . Analysis of Purchasing Analysis of Cash Disbursements Analysis of Control Over Assets Analysis of Budget Procedures Analysis of Other Controls Rejection of Thesis statement VI. CONSLUSION
•
60
· 61
• • 62
·
.
. 63
(Property) .
64 64 65 65 67
• 70
.
· · · . . . · . . . · · ·
Appendix BIBLIOGRAPHY .
71
CHAPTER 1 INTRODUCTION Statement of the Problem Currently, a major problem in independent Baptist churches is that the churches are not using proper business methods in the carrying out of the administrative activities of the church. Many leaders in these churches
are reluctant to use good business principles because they are used in secular businesses. Some of these leaders
fail to seek out the proper procedures and, therefore, are ignorant of most good business practices. This writer
sees one business practice, in particular, that has been neglected by these churches. internal controls. That practice is the use of
Bibliography: A.I.C.P.A. Professional Standards. Clearing House, 1978. Chicago: Commerce Anderson, David R.; McCosh, Andrew M.; and Schmidt, Leo A 72 Ditzen, Lowell R. Handbook for the Church Secretary. Englewood Cliffs, NJ: Prentice-Hall, 1963. Dobbins, Gaines S. The Efficient Church. Broadman Press, 1923. Dollar, Truman. Nashville: Nashville: How to Carry Out Gods Stewardship Plan Elliot, Ernest E. Making Good in the Local Church. New York: Fleming H. Revell Co., 1913. Ellis, Loudell O. Church Treasurer 's Handbook. Forge: PA: Judson Press, 1978. Valley Ellison, David J.i Hubbard, Thomas D.; and Strawser, Robert H Feldman, Julian. Church Purchasing Procedures. wood Cliffs, NJ: Prentice-Hall, 1964. Freeman, John D. More Than Money. Press, 1935. Nashville: Goss, Malvern J., Jr Holck, Manfred, Jr. and Holck Manfred, Sr. Complete Handbook of Church Accounting. Englewood Cliffs, NJ: Prentice-Hall, 1978. Holt, David R. Handbook of Church Finance. Millan Co., 1960. New York: Mac- Horngren, Charles T 73 Lindgren, Alvin J. Management for Your Church. ville: Abington Press, 1977. McGarrah, Albert F. A Modern Church Program. Fleming H. Revell Co., 1915. NashNew York: MCLeod, Thomas E Richardson, Louvella S. Handbook for the Church Office. Cincinnati: Standard Publishing, 1972. Schmitt, Frank J. Church Administration. by the author, 1983. Lynchburg, VA: Taussig, Russell and Vance, Lawencel Westenbroek, Vernon J. "How to Organize a Counting Commi ttee. " Church Administration. (December 1983): p. 37.