David Harvey, St John’s Treasurer explains what is behind this new accounting situation.
“At each of the services on Sunday 13th January, I explained a change that had been agreed by the PCC in relation to the accounting treatment of Living Stones.
“The PCC have suggested that it might be helpful to have a document that is designed to provide some information for any who may have missed the services at which the topic was raised.”
Living Stones (LS) – The accounting treatment of LS has changed from being a restricted fund to a separate budget as part of the general fund and the following Q&A is designed to answer some of your questions.
Q: What is a restricted fund?
A: Donations or grants received for a specific objective, (LS). The funds may only be spent on the specific objective (LS) for which they were given.
Q: What has happened to the restricted fund status?
A: It has been removed.
Q: Why the change?
A: The accepted practice is that any restricted fund should break even or be in surplus and LS has been operating with a deficit.
Q: How did this arise?
A: A growing number of people (47%) have stopped designating their giving to LS and leaving it up to the PCC to decide how much should be allocated to this area of our ministry. This meant that effectively the PCC was in control of the LS budget and it was therefore not technically a restricted fund, it was just another PCC account.
Q: Have the auditors been consulted?
A: Yes and they have agreed the changes.
Q: Have the PCC approved the changes?
Q: What is the effective date?
A: 1st January 2013
Q: Does this change how LS operates?
Q: Does this mean that effectively everyone gives the same proportion of their gift to LS?
A: Yes, the same proportion of every gift goes to LS.
Q: May anyone still ask for their gift to be allocated to LS or ask for different proportion of their gift to be given to LS?
A: Yes but this will not alter the total amount of the LS budget which will continue to be set by the PCC as it has been over recent years.
Q: How do I tell the PCC that I want my gift treated differently?
A: Enclose a letter with a one off gift or enclose a note on the pledge form when it is being returned or write to Bill Smith.
Q: How will a large legacy given to LS be treated?
A: Any large legacy has to be formally received by the PCC accepting any terms and conditions and if accepted the terms of the legacy will be honoured.
Q: Is the plan to grow the LS budget?
A: Yes it is the intention to increase the % of income given away through LS over the next few years from a base of 18% in 2011 and circa 20% in 2012/13. Additionally if the overall income continues to grow then so will the amount given away.
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