It is both a blessing and a problem.
In this season of rising prices and funding challenges, all organizations work hard to raise money, and are careful not to spend money foolishly.
But, in truth, churches all over America have cash that is “not on the books.”
Where is it? How can this be?
First a story…
The congregation at First Church took an offering of affection as a retirement gift to Pastor Jones for his 30 years of faithful and successful service. But Pastor Jones had a better idea. Because of his love for that body, he quietly never cashed the check, wanting the church to benefit from that cash.
The church thought the money was gone. And Pastor Jones never received the money. So where did it go? Who got the benefit?
The only winner in this tale is the bank. They still hold the cash – and the only way that the church knows of this exists in the Outstanding Payment List (formerly called the Outstanding Check List) inside the monthly bank reconciliation.
“Bank recs,” as they are called, are too often treated as a dull, monthly accounting process. The bookkeeper too often is only concerned that the bank rec balances to the bank, without ever looking at the quality of the information it contains.
By the way, Pastor Jones and First Church are real. This is a true story – only the names have been changed.
But there is more to the story…
The church notified Pastor Jones and his intention was honored, and the church had $5,000 more in the bank balance after the check was voided.
Payments of all sorts can fall into this condition. It could be payments to Missionaries that have left the field. It might also be a former employee that never cashed their paychecks. The Treasurer or some other financial leader should be periodically reviewing the Outstanding Payment List looking for stale payments.
But there is still more…
Your State Attorney General wants to know about this.
All 50 states have “Escheatment” laws which define property that is deemed abandoned and must be surrendered to the state Attorney General for resolution. In most states the law declares that assets which are idle for three years must be surrendered to the state. Depending on the property and state, the period can be as short as one year or five years.
For First Church in our earlier example, the uncashed payment to Pastor Jones should have been sent to the state if it were older than three years and in Massachusetts.
The moral of the story is: look at the Outstanding Payments List - looking for money there that the church does not know that it has. But be cautious, the State Attorney General may want to know about it, as well.
Wondering if you have stale items in your books, contact Wisdom here and let's see how we can partner with you!