Ministry Financial Trends: An Interview with Vonna Laue
Vonna Laue shares her perspective on ministry financial trends.
CLA President and CEO Tami Heim recently interviewed Vonna Laue, CPA, managing partner for CapinCrouse, LLP, a national CPA and consulting services firm that since 1972 has provided support in key areas of financial integrity and security for mission-focused nonprofit organizations, churches and higher education institutions..
A member of CLA’s national advisory council, in the area of financial management, Laue has frequently taught both at conferences and online for CLA. She also led the development of the financial management modules in CLA’s Outcomes Academy (Online). Heim spoke with Laue about emerging trends in financial management and reporting for Christian nonprofit organizations.
What trends are you seeing in terms of ministry financial reporting practices?
I would start with software and technology. We are seeing more cloudbased applications. That’s causing everyone to ask about their technology. Is it sufficient? What are the controls around it? How can it simplify financial reporting?
Users of financial statements, whether donors, regulators or the general public, also have a greater concern for transparency and how financial information relates to the use of funds raised, as well as general outcomes or accomplishments.
The whole landscape of financial reporting practices is changing. Within this year, a standard will likely be released that will tell us what nonprofit financial statements will look like in the future. There’s discussion about how expenses will be reported, potentially in ways we haven’t previously seen. These proposed changes are the most significant we in nonprofit ministry have seen in more than 20 years.
How will ministry leaders need to prepare differently?
First, they will need to have the technical expertise either on staff or from outside to comply with the changes. Second, from a leadership perspective, the broader issue is stepping back and asking what these changes are about. They’re actually outcomes-driven changes, and that’s what we’re about as organizations, or should be.
We should be able to tout what we’re doing and be excited about what God is doing in our ministries. There should be a correlation between our financial numbers and our ministry results. Financial reporting just links it together and communicates it to the outside world.
How can boards manage well their fiduciary roles?
An engaged and knowledgeable board asks questions, maintains accountability, monitors the CEO and ensures governance compliance. They are ultimately responsible for outcomes and accomplishments. Boards shouldn’t micromanage, but they do have fiduciary responsibility. For small ministries, that could be handled by the board as a whole, but ultimately boards need a financial committee and then an audit committee.
Someone with financial expertise is needed on any board. Sometimes that doesn’t exist on a board, so an option is to bring them in as a committee member rather than a board member. I love that, because it’s a great form of board recruitment.
How can financial departments best support boards and executive leaders?
Financial departments need to help provide the board and executive team with training on financial risks, internal controls, and financial policies and procedures. Help them understand their role, and equip them to perform it.
Also, ask what information the board wants to receive to adequately monitor and oversee financial operations. What timing? What’s the right level of detail? Ask that periodically, because the makeup of leadership teams change, whether it’s board rotation or a change in executive leadership.
Financial departments need to make sure that they’re providing accurate, timely and succinct information. If you provide 40 pages of detail, don’t be surprised if leadership misses what you believe is most important.
Dashboards are important for providing key financial and nonfinancial data to decision makers. That’s where you need to get the feedback, because it needs to be relevant to governing the operations of the organization. Dashboards are a growing trend because they provide a snapshot of what boards need to know at a given point.
What are the most essential controls ministries need to have in place to ensure financial integrity and transparency?
The most essential control is at the top. I think we sometimes overlook the importance of the tone that the board and leadership set for the entire ministry. For example, if the CEO or senior pastor doesn’t turn in receipts, doesn’t do an expense report, doesn’t place importance on controls, then it’s hard to get others to do it. They don’t see that behavior modeled. Controls start there.
From a nuts-and-bolts perspective, it’s also about basic segregation of duties. Sometimes that’s harder because of technology, since it allows people to do more things. If we’re not intentional about looking at what technology allows people to do, we can have lapses.
What counsel would you offer CEOs about their financial oversight and responsibilities?
If you don’t understand something, or it doesn’t seem right, probe further. One of the largest reputational risks ministries face relates to money. We need to appreciate the importance of financial oversight. Ministry outcomes are crucial, but if finances aren’t seen as a vital component, ministry will suffer. They go hand in hand. Never be satisfied with the status quo. We must always raise the bar.
Today’s post is an excerpt from the 2016 Fall edition of Outcomes Magazine.
Christian Leadership Alliance (CLA) is pleased to announce that at the 2017 Outcomes Conference there will be three new Summits created specifically for senior leaders in Finance, Resource Development, an Human Resources. These will be full day learning experiences as part of the Outcomes Conference – Intensive Training Institute. Register for the Academic Experience and reserve your seat today.
Chief HR Officer Summit: Improving Organizational Performance – Faculty hosts: Alfred Lopus, Giselle Jenkins, Best Christian Workplace Institute
Chief Financial Officer Summit: The CFO as Missional Strategist – Faculty host: John Siverling, Christian Investment Forum
Chief Development Officer Summit: Growing Giving in a Rapidly Changing Landscape – Faculty host William High, J.D., National Christian Foundation
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