Legal and financial
How do we manage the renewal of Church insurance in 2022 as we move to Ministry areas?
Currently individual buildings are covered, within a parish group policy, so there is no risk of churches being uninsured. The Representative Body of the Church in Wales (RB) is not changing nor the names of churches and as such remain jointly insured as a Group Scheme by the Ecclesiastical Insurance Group (EIG). The Diocese has recently been in contact with EIG and sent them a list of which churches, in which (current) parishes, will be in which Ministry Areas.However, it is up to the Ministry Area whether you receive documents per church or, per Ministry Area with the different churches identified (and premium broken down for you if you need that). This is a matter for the Ministry Area to decide as works best for you, rather than being dictated by the Diocese or RB for 2022 at least. It is likely that EIG will not change the policies – i.e. in Ministry Areas where there are individual documents for each church of the current parishes, that will remain so; whereas for Ministry Areas where there is a combined invoice covering a number or churches, that will remain so. It will then be up to the Ministry Area and EIG to decide in future how they want to manage those invoices and documents. If premiums are paid by direct debit then, EIG will continue to take that from the bank account whose details they have, unless and until you contact EIG and change the bank account.It is important therefore, that the newly formed MAC informs EIG of the new trustee body as soon as you can. Ecclesiastical don’t seek named people on the policy but rather office holders as set out in the Constitution (Churchwardens, MAC members, Secretary, Treasurer, Incumbent). The name of your Ministry Area needs to be confirmed and bank account details. Specialist Insurance & Financial Services | Ecclesiastical
What is the legal structure of a Ministry Area?
We are currently working on how to adhere to the Constitution of the Church in Wales, the requirements of good governance demanded by the Charity Commission as every Ministry Area will be a registered charity, and the effective working demanded by the local context.Every Ministry Area will be a single parish in the form of a Rectorial Benefice but will always be known as a Ministry Area. The responsibility for the Ministry Area will be held by trustees, some of which are ex-officio, some elected and some co-opted. We will no longer use the terms of ‘Rector’, ‘Team Vicar’, ‘PCC’ or ‘Sub-Wardens’ but instead refer to Ministry Area Leader, Vicar, and Ministry Area Council.
If the Ministry Area is the legal entity does that mean someone can get married in any church within the Ministry Area?
Yes. The decree for the Ministry Areas will name all churches within the Ministry Area as parish churches and will specify that the rights of marriage remain. Someone with a right to marry will be able to marry within any church in the Ministry Area. Churches that are not currently licenced for marriages will remain as they are.
How do MAs afford positions like administrators?
A Ministry Area, with its combined financial resources from a number of churches, is more likely to be able to afford a paid administrator for a number of hours to work across the Ministry Area. Being a larger Ministry Area, your volunteer pool is also likely to be a bigger resource from which to draw upon, so it might not necessarily have to be a paid administrator.We would encourage the creation of a Ministry Area Office or administrative support hub as part of the development of the Ministry Area Plan.
What support can we expect particularly around the financial and practical issues involved with merging accounts?
The Diocesan Office finance team will be on hand to provide practical support and resources to assist with the issues involved with merging parish accounts. Toolkits covering financial issues will be made available on the Ministry Area section of the website.
What is the software which may help to simplify the accounting process? And what help can we get with this?
The Diocese is looking to utilise the MyFundAccounting software (previously Finance Co-ordinator) developed by Data Developments (church specific software provider). Assistance with the set-up of the software, training and guidance notes will be provided as part of the implementation process. Please ask the MA Finance Adviser, Fr Michael Gable, if you would like to know more.The system requires a super user to be able to have access to assist ministry areas if they need assistance with their data once they are set up on the system and to help in the initial stages of getting the system set up.
What do we do about Electoral rolls? Will the Electoral Roll now be for the entire Ministry Area? How will we be able to collect all the forms together for such a wide area?
Every parish was to have renewed its electoral roll in 2020 as required by the Constitution of the Church in Wales, however this has now been postponed by the Governing Body to 2022. Each parish will need to review its electoral roll to ensure that those who wish to be added have completed a form and been added and any who have died, moved or wish to, have been removed. This needs to be completed before the end of 2021. The electoral roll for each parish will then be combined to form the new Electoral Roll for the Ministry Area and must be available for inspection at the first Vestry Meeting of the new Ministry Area. This will be the Electoral Roll in force at the first Vestry Meeting of the Ministry Area.
Is there an official Church In Wales declaration for MAC / Trustees, which also includes their responsibilities?
Yes - all MAC members have to make a declaration to abide by the Constitution of the Church in Wales (currently named as the PCC). The Constitution itself, and the Charity Commission "The Essential Trustee", are both current regulatory guidance for PCCs/MACs as managing trustees, and will continue to be so before and after parishes become 'registered charities'.
What do we do about "Friends of" accounts or 100-club type accounts?
It would depend on whether these have separate constitutions or are separate groups under your existing PCC. If they are separate charities with their own constitution, then they would remain operating as they currently do under their own objects. If they are separate groups under the existing PCC then they will continue in the same way but under the new MAC.Further assistance can be provided by the Diocesan Office on specific cases.
One of the parishes employs 3 members of staff - how will this work under a Ministry Area?
Assuming they remain in employment then they would become employees of the MA. If their activities were confined to just a part of the MA then presumably the MAC would decide that that part of the MA would be responsible for continuing to fund their roles. A new contract of employment will need to be issued as the employer has changed.
If we do not become a legal entity by 1st January 2022 how can we get a bank account set up beforehand?
Most MAs will have a bank account before end Dec 2021 that can become/be renamed as the MA bank account after 1st Jan 2022.
Do each of the individual churches with accounts have to have a separate Data Developments licence?
Yes; the DBF will cover the cost of the licences as part of the MA implementation.
What insurance cover is available for Trustees (MAC members) once we have moved to Ministry Areas, given incomes and total liability may be increased?
Most MACs will choose to adopt Ecclesiastical Insurance Group's Parish Plus or Parish Guard policies, which are the policies that most parishes will currently have. Each has employer’s liability, public liability, and trustee indemnity included. Please consider the different levels of cover your MAC will need to take out. These policies set out standard limits of indemnity, but these can be varied by the MAC if they so choose but of course would require additional premiums, which should be discussed with EIG or your insurance broker.
What financial support will the diocese provide for the transition to Ministry Areas?
The DBF has approved a package of support which is available to all MAs. The DBF will pay the licence fee for the Data Developments software, myfundaccounting.online, for all churches in all Ministry Areas across the diocese, along with training and consultancy support to help transition from current parish accounts to MA accounts. Staff delivering this support may also be able to give advice on MA resources, stewardship, different ways of giving, other fundraising, alternative business models etc. The DBF will pay for the initial Independent Examination to make sure that the accounts are produced legally and correctly, and for legal support in registering with the Charity Commission and HMRC for Gift Aid if necessary.
Can we use one of the existing bank accounts as the ministry area bank account?
It may be possible to alter the name of an existing account to reflect the new name and new signatories of the new ministry area. This is likely to prove easier to achieve than opening a new bank account, particularly of a brand new charity. If church accounts are to be closed then this will need to wait until direct debits, standing orders, Gift Direct payments etc have all been transferred to the ministry area account.All the bank accounts will be under the responsibility of the ministry area council once the decree forming the ministry area has been signed. Some ministry areas may wish to retain their separate accounts, which is possible, but not recommended long term. If church accounts are retained, then the MAC (ministry area council) is required to be able to have control of the spending of the church account. It is recommended that 4 signatories be on the account, two trustees (members of the MAC) and two church members. In this way the church can do the day to day running of the account, but the MAC can also have full access to the account if they need to. The MAC should set spending limits and receive regular and frequent information as to the income and expenditure of any church accounts.
Can we use the existing HMRC numbers?
The existing HMRC number can be used if it is related to an existing registered charity which is continuing to be used as the registered charity. If it relates to a church or a former parish then it can only be used until a new registration process has been completed.The ministry area needs to complete (or update) their registration with the charity commission before beginning the registration process with HMRC. There will be a step by step guide and the Finance Adviser will be able to assist in the process. The advantage of a new registration with HMRC is that it avoids any legacy issues from being carried forward.
Do we need to receive positive consent from donors to continue receiving their donations?
No this isn’t required, however it is good practice to keep donors informed of changes to an organisation they support. It may also depend upon the financial model the MAC wishes to operate. There may be church accounts retained (in the short to medium term) meaning no effective difference for the donors, although legal governance changes. The MAC may use a single current account, but through MyFundAccounting continue to report on each church so the effect of the donation is still seen at church level. The MAC may decide that general donations are all assigned to the ministry area which would be the biggest change for the donors.The MAC will need to decide whether it is happy to receive donations that are for specific purposes. It is likely that a donation (eg for children’s work) will be welcomed and received, however the MAC may choose to decline a donation where the restriction placed upon it by the donor is limited to only supporting ministry within a specific church. Ministry areas need to be careful not to allow donors to limit their ability to offer mission and ministry throughout the whole ministry area.
How will Gift Direct work with a new ministry area?
There are two options depending upon how the ministry area is going to operate. If church accounts are retained then new and existing Gift Direct payments can be made into the church account, the RB will create sub accounts for Gift Direct within the ministry area and donors will be able to choose this sub account. If there is to be one bank account to which all collections will be made then Gift Direct payments will need to change to this account. The ministry area can then assign the donations to the different churches if it so wishes.
Can we claim GASDS as a new Ministry Area and will we lose out under the £8,000 rule?
The new Ministry Area can claim under the Gift Aid Small Donations Scheme (GASDS) as long as it claims Gift Aid in the same tax year, even though it has just merged. There is no limit on the number of community buildings that a charity can have. The Ministry Area can claim up to a maximum of £8,000 per building per year, subject to the matching rule of 10 times the Gift Aid claims for the whole Ministry Area.
Will the Diocese be able to see our accounts? Doesn’t this break GDPR rules?
There has to be a super user account for MyFundAccounting who will be able to see what happens across the platform. This is not about spying on the ministry areas but is a resource to be able to offer advice and assistance through having the actual data available to view and, if requested, to alter. The super user will not have the time to spend looking at the accounts of individual ministry areas unless responding to a request from the ministry area.The legal advice from Geldards is that the Church in Wales is an umbrella organisation with 6 DBFs and the RB and under each DBF is each MA. It is therefore within the regulations for data to be shared by an MA to the DBF without explicit consent. This doesn’t mean a MA can share data with another MA or a different DBF. It is good practice to avoid recording any personal information within such platforms, but rather to use initials or some other code when relating to individuals.
MyFundAccounting doesn’t offer a backup facility, how to we keep records? Is our data secure?
“Most MA’s produce a considerable quantity of financial records, but not all of these need be kept permanently. The annual accounts of all Ministry Area Council funds should be kept in perpetuity. Other supporting documents, including cash books, bank statements, wages records, vouchers, and routine correspondence should be kept for at least seven years.” CinW Keep or Bin document.To achieve the above, MyFundAccounting has a reporting mechanism that can produce PDF reports (it also has an extra downloadable Windows program called MyFundAccounting.offline that has more options with file formats to export reports to). What happens in MA’s is that the consolidated PDF reports are included in the Trustee Annual Report that needs to be uploaded to the Charity Commission website anyway, but the Ministry Area Treasurers also keep copies of these either printed or electronically. Some MA’s may choose to retain an electronic or printed copy of the transactions report, however with the source documents and the final accounts are able to provide evidence of all income and expenditure should this be required.All Data Development cloud platforms (MyFundAccounting.online and MyGiving.online) both operate on Data Development’s own private servers. Their server and network infrastructure are compliant with the PCI DSS (Payment Card Industry Data Security Standard) which is regularly tested by an independent ICT security compliance company. They therefore have an extremely robust data protection and business continuity regime in order to reach and maintain the PCI DSS accreditation.