Connected Campus

3.10.3 Control of Finances

 

The institution exercises appropriate control over all its financial resources. (Control of finances)

 

_X_  Compliance           ___  Partial Compliance          ___  Non-Compliance

 

Narrative

 

Mid-America Baptist Theological Seminary (MABTS) has established and maintains effective internal controls of financial resources as required by the articles of incorporation [1] and by-laws of the institution [2]. The application and effectiveness of these controls are a part of the annual audit performed each year by an independent audit firm. There have been no negative comments from the auditors in the management letters from the 2014 [3] or 2015 audits [4].

 

The greatest effort involving internal control exercised over seminary assets is centered in budget controls and control of cash. Equally important is control over investments, accounts receivable and fixed assets, but the volume of procedures and transactions involving these areas are relatively small when compared to budget and cash. MABTS follows the investment policy and mandate approved by the Board of Trustees [5]. GuideStone Financial Resources, the Southern Baptist Foundation, the Arkansas Baptist Foundation, and Shoemaker Financial currently manage the invested monies of the seminary.

 

Budget Control
 

Good budget control begins with a budget process [6] that ensures the resources needed to accomplish the institution’s mission are prescribed and a plan designed to provide the necessary funding.

 

Once the budget is formulated, approved by the administration and adopted by the Board of Trustees, there must be a good measure of discipline and management to carry out this plan. MABTS employs a system of controls to guide the plan though the course of the fiscal year.

 

Every purchase must be preceded by a purchase request from a budget director. Budget directors are employees who have responsibility for discretionary, program expenses within a certain department or cost center. Each purchase request details the item or service desired and is signed by the budget director for the particular account requisitioned.

 

The approved budget is loaded into the financial software package and is available for comparing the request to the available funds. MABTS employs an Accounts Payable Coordinator whose primary responsibility is to ensure compliance with expenditure authorizations through the administration of the accounts payable function, which begins with the purchase order or check request.

 

Qualifications of Responsible Staff 

 

The Business Office operates under the direction of the Vice President for Finance and Operations (VPFO). The Accounts Payable Coordinator, the Accounts Receivable Coordinator and the Executive Assistant to the VPFO ensure the smooth operation of the business functions of the seminary. The responsibilities of each position [7] are divided and assigned with the intent to protect the employee and the seminary from fraud or abuse.

 

In addition to the job description for the VPFO, the vitae [8] for the current officer indicates extensive business experience and acumen.

 

Cash Control

 

The seminary safeguards its cash through several procedures as noted in [9]. First, there is limited access to actual currency and coin in possession by the seminary. Deposits are made daily at the banking institution. Purchase orders and check requests are approved by the departmental budget directors and signed off by the VPFO. All financial transactions involving amounts larger than $500.00 require two signatures [10]. Per the Articles of Incorporation and the By-Laws, the Board of Trustees designates the signatories for all bank accounts [11]. All current officers of the seminary can act as signatories when called upon.

Every bank account is reconciled on a monthly basis within the first ten days of the month so that any problems involving a bank transaction could be detected quickly. Cash flow projections are prepared as a part of the annual budget process and monitored during the fiscal year as noted in the section on Internal Auditing and Accountability.
 

Physical Resource Control

 

MABTS maintains accountability of any new real property acquired by the seminary. Whether purchased or donated, the acquisition requires approval by MABTS’s Board of Trustees, as stipulated by the articles of incorporation and by-laws [12].

 

Internal Auditing and Accountability

 

The VPFO acts as the seminary’s internal auditor under the direction of the President and reports to the Board of Trustees. A subcommittee of Trustees (Finance and Audit Committee) receives monthly reports [13] from the VPFO to keep them apprised of the financial status of the school and to ensure internal control. Monthly meetings are conducted with the budget directors of the school providing year-to-date cash flow summaries and budget reports [14]. The Executive Administrative Committee (EAC) is updated weekly on the financial status of the school. A copy of a weekly report is included [15].
 

Documentation

 

1. MABTS Articles of Incorporation

2. MABTS By-laws 

3. 2014 Audit Management Letter 06-30-2014

4. 2015 Audit Management Letter 06-30-2015

5. Investment Policy for MABTS

6. 2014-15 MABTS Employee Handbook, p. 19-20

7. 2014-15 MABTS Employee Handbook, p. 23, 33-34

8. Vitae for VP for Finance and Operations

9. Internal Controls MABTS 2014

10. 2014-15 MABTS Employee Handbook, p. 20

11. MABTS By-Laws, Section 6.01-6.02

12. MABTS By-Laws, Section 8.01

13. Example of Monthly Report to Finance Subcommittee of the Trustees

14. Example of Monthly Report to the Budget Directors

15. Example of the Weekly Report to the EAC

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