Well, the first month of the year has gone, and with it, the flurry of fresh starts, resolutions and new initiatives. February is a moment to pause – have we gone at a sprint or are we pacing ourselves for the journey ahead?

Winter may still be with us but signs of spring are emerging. The days are slowly getting longer and with them a sense of hope. In the life of the Church we are still discerning how we serve our communities, steward our resources and support one another in ministry.

This month’s newsletter has important updates – the Listed Places of Worship Scheme is being renewed, National Wage Rates are increasing and the Charity Commission writes to the General Synod about safeguarding expectations. We also look at practical matters such as verifying funeral directors and protecting heritage assets.

We also encourage you to take part in the ACAT questionnaire regarding the Home Office consultation on preventing ransomware so that the voices of churches are heard in this important discussion.

And our partners at Kingdom Bank want us to think differently about stewardship and fundraising – a vital conversation for churches in 2025. They have written an excellent article that we all should read.

As always we hope this edition is helpful, thought-provoking and equips you for your work.

1. What’s new
   • Listed Places of Worship Scheme – Renewal Time Limited
   • Increased National Wage Rates 1st April
   • Home Office Consultation – Preventing Computer Ransomware (and ACAT Questionnaire)
   • Protecting our Heritage Assets
   • Verifying the Funeral Directors who use your church
   • Church Commissioners £2.6 billion assets transfer to halt parish decline.
   • Charity Commission sets out Safeguarding Expectations to Church of England ahead of General Synod.
   • AI in Funding Applications: What’s Next?
2. Points to Ponder
   • Adequate Scrutiny
   • Coercive Trustees
3. Helpline Q&A
   • Funeral Collections
   • Church organisations
   • Solar panels
   • Rounding figures in the annual reports
4. Also of Interest
   • Thinking Differently About Stewardship and Fundraising – Kingdom Bank
5. Partners in Ministry
   • Ecclesiastical Insurance – How secure is your church?
6. Spring Training Programme
7. Charities Engagement Team – Upcoming webinars
8. Final Thought

God bless,

Ashley Ellis
ACAT Executive Officer

Increased National Wage Rates 1st April

A gentle reminder from the Government of the increases in the National Living Wage and the National Minimum Wage from 1st April as provided for in the Autumn Budget last year. For churches with paid employees, the rates, which reflect a 6.7% increase, will be as follows:

• National Living Wage
  • £12.21 per hour (21 and over)
• New Minimum Wage
  • £10.00 per hour (18 to 20)
  • £7.55 per hour (Under 18)

Most employees will receive the National Living Wage, but those who are aged 20 and under should receive the minimum wage.

Whilst for a significant number of churches, this increase will present a financial challenge, it is worth remembering that “The labourer is worthy of his (or her) wages” (1 Tim 5:18)

Home Office Consultation – Preventing Computer Ransomware (and ACAT Questionnaire)

It is self-evident that computers are now integral to everyday life. For most of us, they are essential, not only as part of our working life but also in managing our personal information and finances. Very few churches currently exist without using a computer in some form or another to hold important administrative and financial information.

Threats to computer IT systems come in several forms:

• Viruses which can corrupt the data stored on a computer
• Vital information, such as personal or financial data, stolen by individuals illegally accessing the system
• Individuals illegally access and paralysing a system, making it unusable and demanding a ransom to restore it.

The Home Office has established a consultation aimed at reducing the threat posed by the criminal infection of computer systems with malicious ‘ransomware’ software. The aim is to increase the reporting of such incidents and reduce the amount of money paid out as ransom. The consultation is due to end on 8th April this year.

Whilst there have been several high-profile incidents

• Royal Mail
• British Library
• NHS Dumfries & Galloway

It would be unwise to think that smaller organisations are immune simply because the sums involved might not be as large. A church or charity with even a modest regular income from collections, donations or grants is regarded by the criminal fraternity as “fair game.”

With all that in mind, how are your church’s computer systems protected?

• What anti-virus system is installed?
• What password protection is in place, and is the sharing of passwords strictly prohibited?
• Do you have a “backup” system in place?
• How would you respond to a malicious attack on your church computer system, making it unusable

This might just be the time to review your church’s computer systems security.

If you are interested in learning more about how to protect your computer systems, please let us know by filling out our 1-minute questionnaire.

Protecting our Heritage Assets

Many of our churches are listed historical buildings, and even those that aren’t have a story to tell. The House of Commons Culture, Media, and Sports Committee is currently investigating how best to protect our heritage assets.

The enquiry will investigate issues regarding funding support and the practical aspects of sustaining and maintaining these important building assets. In particular:

• How decline and disrepair can be prevented by encouraging the involvement of local communities and businesses.
• Making restoration and repair easier and less expensive
• Ensuring that the local workforce has the appropriate skills to undertake repairs to historical buildings

Whilst the Churches Legislation Advisory Service (CLAS) has made an initial submission to the Committee, it is suggested that members of church governing bodies monitor progress via the Culture, Media & Sports Committee websites.

Encouraging local community groups and businesses to engage in maintaining churches and associate buildings should not be seen simply in terms of attracting financial support. This is also an outreach opportunity involving people, drawing them into our church fellowships and should not be ignored.

Verifying the Funeral Directors who use your church

The Competition and Markets Authority has issued a checklist for funeral directors with the aim of ensuring they are fully compliant with the regulations governing their industry and specifically with the Funeral Markets Investigation Order 2021.

In recent years, funerals have become a significant area of business. Whilst the secularising of society has resulted in an increasing number of “non-religious, non-church” funerals, there are those who still wish to have a church funeral.

So, here’s the question. Do you ever run a check on the firm of funeral directors who seek to use your church periodically or who you might refer to the family of a deceased member of the fellowship?

Your church may have used a particular firm for many years, but how do you know whether or not they are compliant with current industry regulations?

Church Commissioners £2.6 billion assets transfer to halt parish decline.

This month, the Church of England General Synod will be asked to approve a motion requesting the Church Commissioners to transfer assets to the value of £2.6 billion to the Diocesan Stipends Fund. This is to redress the perceived crisis in funding parish ministry.

For years, funding challenges have led to the restructuring of parishes, with clergy overseeing increasing numbers of churches. This rising workload has affected morale among both clergy and church officers. The issue of providing adequate funding for church ministers and paid staff is a continuing challenge throughout the body of Christ.

As treasurers and trustees, how do we ensure that those paid members of the ministry team are not only provided for financially but also that their workload and mental welfare are constantly considered?

Charity Commission sets out Safeguarding Expectations to Church of England ahead of General Synod.

The Charity Commission has been in contact with the Church of England ahead of the February General Synod meeting in view of the urgent need to improve safeguarding.

In particular, the Commission has stated that it expects action and not another review of processes and procedures.
The Commission will be writing to all Synod members, emphasising their legal duties as trustees to take reasonable steps within their respective churches and charities to ensure that safeguarding concerns are not ignored or covered up.

Whilst this action by the Commission relates specifically to Anglicans, it also serves as a further reminder to all churches, whether part of a denomination or independent, of the need to ensure the highest standards of safeguarding.

A copy of the letter can be found below.

AI in Funding Applications: What’s Next?

In a recent article, “Using AI in funding applications,” we explored how AI can be used in funding applications, reflecting on guidance from the National Lottery Community Fund. Since then, the Community Fund has produced a new document, AI principles — Our 10 principles of AI.

They’re also inviting charities, funders, and community groups to a free online event on 11 March In Conversation: Introducing our 10 AI Principles for the benefit of people and communities to discuss AI’s role in the sector. So, what does this all mean for those of us using AI in funding applications?

Adequate Scrutiny

As the Assisted Dying Bill makes its way through Parliament, we are reminded of the rigorous scrutiny that all legislation undergoes. Currently, the bill is being examined line by line, with each clause being carefully reviewed and amendments proposed where necessary. This meticulous process prompts us to consider how we, as churches and trustees, approach important decisions.

As members of our church governing body, we are constantly being asked to review and approve proposals of varying kinds:

• Financial Budgets
• New equipment
• Building projects
• New Outreach initiatives
• Additional staff needs
• Safeguarding policies

When faced with these decisions, how do we scrutinise these reports or proposals on which an important decision is needed? Do we simply:

• Quickly scan the proposal
• Form a cursory view concentrating on the big picture
• Rely on other colleagues to grasp the detail
• Insist on taking time to adequately evaluate the proposal

Perhaps we can learn from the way Parliament scrutinises legislation—taking a line-by-line approach to reviewing important proposals and policies. As trustees, would it be beneficial to appoint a small team to examine proposals in detail and provide recommendations to the wider board?

It is a fact that decisions taken in haste, without adequate scrutiny and full discussion, are likely to have unforeseen consequences. By committing to a more rigorous review process, we can ensure that the choices we make are well-informed and in the best interests of our church communities.

Coercive Trustees

The resignation of the former Bishop of Liverpool revealed that some of the original appointing committee were, it was alleged, subjected to strong persuasive arguments by two senior members of the episcopacy. These allegations have been denied.

The question for us is: When, if ever, does persuasive argument become coercion?

As trustees, we work with colleagues who are passionate, articulate and influential. Strong personalities can drive discussions, but they can also dominate them. Healthy debate is essential for good decision-making, but we must be aware of the moments when persuasion becomes something more important—when it moves from a good argument to undue pressure.

The lesson here is perhaps to be aware of situations and circumstances when a persuasive argument becomes not only strident but crosses a line by suggesting dire consequences if not accepted.

How do we ensure all voices are heard, and decisions are made freely, without coercion? A few thoughts:

• Encourage open discussion – Leave space for each person to speak freely.
• Recognise power dynamics – Be aware of senior or loud voices controlling the outcome.
• Watch out for “crisis language” – If an argument is based on disastrous consequences, halt and reassess the situation.
• Promote independent thinking – Provide time for individual reflection before the final decision is made.

As trustees, our responsibility is to lead with integrity, not pressure. By being aware of the line between persuasion and coercion, we can make wise and ethical decisions.

Funeral Collections

Q: Last month, I mentioned that we had revised our guidance for funeral collections. I am grateful to a reader for pointing out that the wording supplied was ambiguous. I have added a phrase to remove any ambiguity.

A: “If the church is acting as a ‘third party’ (i.e. the funeral collection has not been organised by the church), then the church is ‘acting as agent’. The moneys should go through the church account books but are excluded from the church annual accounts (but mentioned in the notes as ‘acting as agent’). Ideally and if possible, in the case of a funeral, it is better not to handle the moneys but leave it to the family or funeral director in which case there is no need to record anything in the church account books.”

The full paragraph can be found in our Handbook https://www.acat.uk.com/handbook/chapter-3-internal-controls/ [login required] – section 2 paragraph a.

Church organisations

Q: Our church has an indoor bowls club meeting in the church weekly comprising members of the congregation. They have always maintained their own club accounts but I [church treasurer] have been asked to take responsibility for keeping them with the church accounts as a restricted account. Is this acceptable? It would involve them transferring in around £1,000 and accepting a small amount of weekly subscriptions. Rather than show it as a restricted account, should I treat it as I do for fees received as agent which do not count as church income? I should add that they have little expenditure and regularly donate amounts to the church from their surplus.

A: Ah – the perennial problem of church organisations! We have something about this in our handbook https://www.acat.uk.com/handbook/chapter-16-associated-charities/ [login required] – see section 4, which is headed “Which organisations are part of the church?”.

Because it is a church organisation responsible to the PCC (i.e. trustees), the accounts of this organisation should be treated as part of the church accounts – not in an ‘acting as agent’ capacity. The writer’s view is that it is better for organisation funds to be treated as ‘designated’. This is because if the organisation ceases to exist, the funds can be assimilated into the church’s General Fund (or given to another organisation or whatever). If the fund is to be treated as ‘restricted’, then the members of the organisation have the final say – but what happens if there are no members left but there are still funds to spend?

If the organisation is giving money to the church, that makes aggregating the accounts a bit more difficult as the church can’t give to itself! You want to avoid double-counting. It would be the same if the church gives a subsidy to an organisation – one needs to remove internal entries. I think this is another reason why it’s easier if the organisations are treated as ‘designated’ funds – it’s easier to remove transfers from the organisation to the church. In this instance, the writer would set up a ‘restricted’ fund; any gifts from the organisation to the church would be treated as part payment of say the utility bill. In essence, part of the utility bill would be allocated against a General Fund category and part would be paid for by the organisation. It recognises that the organisation has given a gift and, for accounts purposes, it has been spent within the restricted fund.

Solar panels

Q: We have recently installed solar panels at our church and started receiving payment for excess energy fed back into the grid. In practical terms these payments are received as credits against our energy bills. For accounting purposes, should they be treated as income in the accounts, or as credits against our energy costs?

A: Basically the enquirer is asking if this income can be ‘netted off’. As this church prepares accounts on an Accruals basis, all income and related expenditure must be shown gross, i.e. with no netting off, so the answer is ‘no’. This is the advice taken from our Handbook. “If a fete is held, the proceeds must be shown gross as income and the costs of organising and running the event shown as expenditure. Similarly, if there is a magazine, the sales must be shown gross and the costs of printing, distribution, etc. shown gross. However, if a receipt is merely a repayment of an expense borne on behalf of another party, e.g. a minister reimbursing the church for private telephone calls, or a church paying the electricity bill for a tenant and then recovering it, such items can be netted off.” Churches who prepare accounts on a Receipts and Payments basis should follow this guidance as a matter of best practice.

Rounding figures in the annual reports

Q: When preparing our year-end accounts, I [church treasurer] use the figures to two decimal places from the accounting system and round them only in the final totals from the accounting system. This means that the tables in the report might not add up to a potential maximum error of £1 in any one total. The only way to avoid this is to falsify some numbers and I prefer not to do this as it all tends to go round in circles and result in more significant errors. What is best practice regarding treatment of rounding in annual reports?

A: The writer has always meticulously rounded the figures so that everything balances. He accepts that it is much more difficult when preparing Accruals accounts compared with Receipts and Payments accounts because the former are much more complex. The writer contacted a couple of colleagues and they both disagreed with him and agreed with the enquirer! The important thing is to have a note (or notes) about this. Here are some of the comments from colleagues at ACAT:

“I would not opt to adjust figures to make the rounding work as I would consider a deliberate £1 error worse than a £1 rounding error arising incidentally.

My examiner challenged this, but I asserted the above view, and we agreed that it was hard to argue that making the numbers deliberately wrong to fudge the rounding was preferable to what I was doing, so we agreed that I would add to my existing note about rounding to say ‘All figures are shown to the nearest whole number of pounds. This may result in apparent discrepancies in totals where total figures reflect sum of unrounded figures.’”

In dealing with a quite different enquiry, the writer came across this note in a church’s accounts explaining the difference in Total Assets from a total of the funds: ‘The £1 discrepancy between the value of monetary assets and liabilities is a result of adding up the rounded values of the amounts in each of the funds; the value of the assets is the more accurate figure.”

Next year, the writer will consider this ‘different’ approach rather than trying to get the columns to add up and then ensure agreement between different sections. The writer will have to check with his Independent Examiner – will you have to as well?

We’re always happy to hear from you telling us about your experience on these matters along with any enquiries that you may have. Please use the contact form on our website https://www.acat.uk.com/contact/.

Thinking Differently About Stewardship and Fundraising – Kingdom Bank

Getting funding for church projects – whether a new building, renovations or ministry expansion – can feel daunting. As Brits we shy away from asking for money, even when it’s for gospel ministry. But what if churches approached fundraising differently?

In an article kindly provided to ACAT by Kingdom Bank, they look at how switching our mindset from fundraising to relationship-building can make all the difference. Instead of seeing financial support as a transaction, churches should build long term gospel partnerships. People need time to journey with you before they’ll commit to regular giving.

The article also looks at the power of vision – while mission informs, vision inspires. Churches that clearly communicate the impact of their ministry are more likely to get generous support.

Beyond tithes and offerings, the piece looks at alternative funding options like grants, legacy gifts and matched-funding campaigns, and the benefits of working with a bank that understands church finances.

To read the full article and find out how to strengthen your church’s approach to stewardship, click below.

Ecclesiastical Insurance

How secure is your church?

It’s a simple question but not one that’s easy to answer readily. Here are some of the issues

• How are your buildings secured? Are they alarmed? Does the alarm automatically connect to local fire or police services?
• Where are valuable church artefacts kept? Is there a safe bolted to the floor with combination access?
• How do you protect your employees/volunteers and congregation from harm?
• Is your church building in an area that is susceptible to flooding? If so, what preventative action have you taken?
• Does your church have effective fire alarm systems connected to emergency services with clear emergency exit signage?
• How many trained first aiders are likely to be available during a church service or event?

These are just a few security issues worth periodically reviewing.

Ecclesiastical has some helpful advice on these issues in its February Church Matters

• Gift Aid: Maximising the Benefits and Reducing the Pitfalls
  • Date: Thursday 6 March
  • Time: 6 PM – 9 PM
• Being a Treasurer: The Basics (3-session course)
  • Date: Monday 10, 17, 24 March
  • Time: 7 PM – 9 PM
• Introduction to being a Church Trustee: Some things to think about
  • Date: Tuesday 1 April
  • Time: 7 PM – 8 PM

Do get in touch if there is a particular course you would like to see in the programme during 2025. Please keep checking the newsletters, website and social media for details as they become available. Contact Cath Fox to discuss further on training@acat.uk.com.

The Charity Commission for England and Wales registers and regulates charities to ensure that the public can support charities with confidence. Through regular events, the Charities Engagement Team supports trustees and charity leaders to manage their charities effectively.

Currently, there are no courses scheduled.

Charity no. 1072733 Registered address: Association of Church Accountants and Treasurers, C/O KM Accountants, 1st Floor, Block C, The Wharf, Manchester Road, Burnley, BB11 1JG.