PCC Accounts and Return of Parish Finance
In response to the COVID-19 restrictions announced by the Government, Annual Church Parochial Meetings (APCMs) have been suspended for the time being and the deadline for holding them has been extended until 31 October 2020.
However, this does not mean that PCCs should delay completing and submitting their 2019 Return of Parish Finance, as this can be done online in the usual way as soon as the PCC's 2019 financial statements have been prepared and independently examined. It would only be necessary to update the Return of Parish Finance if there were material changes between the financial statements as independently examined and those subsequently adopted by the PCC for presentation to the APCM, or those adopted by the APCM.
We would ask all PCCs to do their best to submit their 2019 Return of Parish Finance online by 31 May. This will allow us to have a fairly up-to-date view of parish finances, which will be particularly valuable as we seek to understand more clearly the challenges that our parishes will be facing in the coming months.
Please do email a member of the diocesan Finance Team if you have any further questions about this. Thank you for your continued support during these unusual times.
Year end accounts checklist
To guide a Treasurer through the year-end accounting and reporting process, please refer to and complete our Finance checklist. Further guidance on each part of the process is available as follows:
Accounting & Reporting
All Parochial Church Councils in the Diocese of Hereford, regardless of size or whether they are registered with the Charity Commission, are bound by charity law. This means every PCC has a legal duty to produce a Trustees' Annual Report and Accounts, and make them publicly available, even if the PCC is not required to file them with the Charity Commission. This is because the Commission expects every charity to inform the public each year about its purpose, achievements, and how it has spent its money. In particular, the annual report must set out the PCC's activities for public benefit.
The Church of England has an excellent publication to help PCCs meet their reporting responsibilities: PCC Accountability: The Charities Act 2011 and PCC (5th edition) can be read on-line, or purchased from the Diocesan Finance Office for £5. The book covers all areas of producing the annual report and accounts, including a full set of example accounts.
The Parish Resources website has a wealth of information to help you prepare a set of accounts, including:
Two different methods of accounting are permissible, depending on the gross income of the PCC: Receipts & Payments, or Accruals accounts.
Receipts & Payments Accounts
If the gross income of your PCC is less than £250,000 you can choose to prepare your accounts on a 'Receipts and Payments' basis. This is a simpler form of accounting which records cash moving in and out of the PCC’s bank accounts during the financial year.
You might like to use this simple excel template to help you prepare your receipts & payments accounts.
Parishes with gross incomes greater than £250,000 must produce accounts on the 'accruals' basis, which provides a more accurate view of the PCC’s financial position.
Trustees' Annual Report
Alongside each year’s accounts, a PCC must present a Trustees’ Annual Report. The Charity Commission has issued some rules on what must be covered. Click here for guidance on writing the Trustees’ Annual Report. All PCC members have collective responsibility for the annual report, although typically the PCC Secretary and Treasurer will take a lead in its preparation, with input and support from the Incumbent or Priest-in-Charge.
The annual report and accounts provide an important opportunity for trustees to 'take stock' of what the PCC has achieved over the last year and to demonstrate to supporters, potential funders and the public that the PCC has met its objectives and managed its resources effectively, and explain the difference that it has made to its intended beneficiaries.
Independent Examination (or Audit)
A PCC's Annual Report & Accounts must receive external scrutiny. Most PCCs should be independently examined, although the largest PCCs will require a full audit. Click here for more information on Independent Examinations and Audits.
How to calculate gross income:
For accounts prepared on the Receipts and Payments basis, gross income is the total receipts shown in the statement from all sources excluding the receipt of any endowment. For accounts prepared on an Accruals basis, gross income is the total incoming resources shown on the Statement of Financial Activities, including any amount transferred to income funds from endowment funds in order to be available for spending, but excluding the receipt of any endowment.
Annual Return of Parish Finance
The Return of Parish Finance is an annual on-line submission made to the Church of England to provide a valuable snapshot of the financial strength of each PCC. More information is available here.
Towards the end of each year, around October/November, each PCC should prepare an annual budget for the following year. Further guidance can be found here.