Financial Accountability

Personal Accountability

Accountability comes in when we work for someone else or when something is entrusted to us.  In our religious context, all priests and religious are working for the Church, through our dioceses or religious congregations.  In secular terms, we work for a registered charitable trust or society.  Thus, in both cases, we are working for someone else. Whatever we administer, we administer it on behalf of the Church and the registered trust or society.   This calls for accountability for whatever we do or/and spend, either on ourselves or on the apostolic works. In our religious context, we are accountable to our superiors; in secular terms, we are accountable to the Trust/Income Tax official, who has allowed us the “income tax exemption” status.  Therefore, according to Canon 1284 §1,  all administrators are to “perform their duties with the diligence of a good householder.”

Usually we take a sum of money as advance, from the Minister/Treasurer, for our expenditure.  Going by the understanding spelt out above, it is only natural that we are accountable for it.  This would mean submitting the financial account for the sum of money we have received and spent, whether on personal needs or on the needs of the apostolic works.  It does not stop there.  We are also accountable for the amount of money we receive personally as a gift, donation or remuneration. Thus, it is clear that we are held accountable for the sum of money received for our use from our friends and relatives, the sum of money we received as remuneration for our services, as well as the amount we take from the Minister/Treasurer for our needs or the needs of the apostolic works.

Some of us still do not know how to prepare the accounts.   Normally it is done as shown below:

The account shown here is the master account for personal expenses, prepared and signed, with date, by the person concerned.   Similarly, if the account is for an apostolic purpose, it is mentioned on the top as “school office account,” “staff welfare programme account,” “farm account,” etc.   Below this master account, all supporting bills and vouchers are grouped and attached in the same order as given in the master account so that auditing becomes easier.

From the income tax point of view, it is necessary that we submit the original (pacca) tax paid bills, as much as possible, at least for amounts exceeding Rs 300.  It is always preferable that we pay a little extra and get a tax paid bill than buying from the roadside without any bill, just because it is cheaper.   For travel, we are expected to submit the train or bus ticket and, if it is a flight ticket, the boarding pass as well, all in original. For food during journey and auto or taxi fare, we can write a separate voucher, sign with date and attach the same.  It is much better that we submit our account with all supports immediately after we have spent the money, so that we/our trust does not get in to unnecessary problems with the income tax officials later. As registered public charitable trusts, we have to be accountable for all the income and expenditure we incur on ourselves or on the apostolic works.

Accountability of a Society/Trust

In the case of a Society or Trust, too, we are held accountable. Normally, the Treasurer of the Society or Trust, on behalf of the Governing Body, presents the financial report of the Society to the members of the General Body.  This is how it has to be.  But in many Trusts or Societies, this practice is either not there or even if it is there, it is done as a routine procedure without much seriousness.   As members of the Governing Body, each one has to realize that they are all entrusted with the responsibility of running the Society/Trust and thus take his/her role seriously and be involved in the process of financial accountability.

Normally, the financial report contains the following information: the annual income and expenditure, liabilities and recoverables, new assets purchased, extra-ordinary income (e.g., donations), extraordinary expenditure (e.g., major renovation or construction works), volume of increase in the funds of the Society or Trust, investment income earned and the final surplus or deficit data.  On presenting these data, the members are free to ask for any clarification or give suggestions.

Accountability of an Institution

When an institution raises funds for a particular purpose, we are accountable to all those who contributed for the cause. Normally a thanksgiving function is organized in their honour and their contributions are acknowledged in public.  A report of the activity and its financial report are presented to them in common or are sent to them all by post.  Here too it is clearly shown whether the whole amount is utilized or there is any balance left.

Accountability in a Parish

Accountability plays a vital role in a parish too.  The Parish Priest, together with his Parish Council, is accountable to the parishioners. Be it the Sunday collections or any other collections, the parishioners are informed of all the total collections, expenses incurred and the balance in the account.

Project Accountability

Project Liability is another area in which we all have to be accountable.  Here we are accountable to the donor agency. The accounts are given in the way the agency desires. Some may ask for the financial and activity report together, others may ask for all accounts and at least the copy of all bills and supports. A few others may ask for the audit report or utilization certificate from a chartered accountant.  It is better that we present the financial report against the budget we had proposed to the donor when we submitted the project, so that they can easily follow the report against the budget they had approved.  The future support of the donors depends on the way we are accountable to them now.

The next issue will deal with the budget.

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