Bill Vondrasek, who for many years served as Business Manager for St. Paul the Apostle Church in Los Angeles, helped develop the 1996 “Parish Budgeting Manual” for the archdiocese. He also provided the following outline for his Regional Parish Finance Council Workshops.
Regional Parish Finance Council Workshop
Outline by Bill Vondrasek
Business Manager, St. Paul the Apostle Church
The Budget Flows from the Plan – Not Vice Versa
Parish Budgeting Manual, Chapter 2 (pp. 2-3)
1. What is a budget? It is the dollar cost of the parish plan for one fiscal year.
2. Why prepare a budget?
A. To determine if the plan is affordable.
B. To show if the allocation of resources is consistent with the parish mission/goals.
C. The budget helps to avoid yearend deficits by controlling expenses and taking corrective action as problems arise.
D. It helps to educate staff and parishioners and promotes a sense of stewardship in both directions.
3. Who prepares and approves the budget?
A. The pastor, parish staff, secretary, bookkeeper, parish administrator, finance council, and the parish pastoral council can all play a aprt in the preparation of the parish budget.
B. Only the pastor approves the budget.
4. When is the budget prepared?
A. The budget process can begin in January or February.
B. The budget should be approved in the early part of June.
5. Estimating Income. From The Parish Budgeting Manual, Chapter 3, pp. 4-25.
A. Collect five years of income history, if possible, and estimate income for the current year (Tables A-B).
B. Determine the direction and the extent of the trend.
C. Revise the extent of the trend (up or down) if economic conditions warrant the revision.
D. Apply the appropriate trend to each income account (Table C).
E. Once you have estimated the income, do not come back and secondguess the estimate (especially if the estimated expenses exceed estimated income).
6. Estimating Expense. Divide all expense accounts into one of the following: payroll, fixed, operating, ministries/discretionary, and capital.
A. Payroll. These expenses on the average account for 35-50% of the total budget. These costs represent some of the most rapidly rising costs in the parish budget.
1. Use Table D to estimate the cost of priest compensation.
2. Use Table E for religious payroll.
3. Use Table F to estimate the cost of lay compensation.
B. Fixed Expenses (e.g., archdiocesan assessments, property taxes, insurances, repayment of loans, subsidies to schools, etc.).
1. Determine which expenses are fixed by using the guide in the Manual.
2. Calling the archdiocese’s personnel office may alert you to the cost increases for some fixed expenses.
3. Calculate the archdiocesan assessment by multiplying the ordinary income figure on the annual report by 8%.
C. Operating Expenses. These are the daily costs of operating the parish plant.
D. Discretionary Expenses. These are the costs of parish programs, ministries, and events.
E. Capital Budgeting. These are the costs of expensive maintenance or building, such as painting, major roof repairs, and parish cars.
7. Evaluation and Reconciliation. If estimated expenses exceed estimated income, you have two courses:
A. Review all non-fixed expenses. This review may revise or eliminate any planned salary adjustments or it may reduce planned purchases.
B. Ask the parish pastoral council and the pastor to review the budget in terms of priorities dictated by the parish pastoral plan, and make recommendations in light of that review.
8. Managing the Budget. The manager of the budget must be committed to it.
A. Review income monthly or at least quarterly. Various expense accounts may need to be revised downward as income increases.
B. Review all expense accounts monthly or at least quarterly. Make adjustments in the budget, but do not change the budget.
C. Refer to the budget in all cases where requests for additional spending arise.
If during a review you discover than an income account or an expense account was significantly over-budgeted (or under-budgeted), note this. The notes can help during the budget process for next year.