automatically withdrawn directly from the bank. We learned which vendors didn’t trust the church to mail their payment; think about how that would make you feel. However, that is better than being on a cash-in-advance arrangement, which was the case with some vendors who had their payment unreasonably delayed.
Invoices were separated into stacks of pay now, put off a week, put off two weeks or longer. The ones that were designated pay now were essential services: electricity, water, and septic pumping. Here’s the financial situation when it was finally laid out:
Payables total – 151,360
Overdue payments (vendors) – 58,000
Amount overdue more than 60 days – 45,000
Amount overdue more than 90 days – 28,000
Associate Pastor back pay (prior year) – 23,000
Pastor back pay (prior year) – 3,000
Past due to electric company – 6,800
Past due to telephone company – 1,100
Consolidated credit card payment – 55,000 (1,800 ACH monthly)
Mortgage payment – 91,156 (950 ACH monthly)
Equipment (copier) payment – 800(monthly)
Special program debt – 4,900
Church Salaries
These consisted of five full-time employees, and several part-time. These were paid but usually late by a month, or more.
Insurance
The vehicle insurance for church owned vehicles was overdue. It was periodically cancelled, then reinstated after payment. The church offered health insurance to employees on a shared cost basis. The church paid half and the employee paid the other half plus coverage for other members of their family if they elected. This was overdue and at the cancellation point; had been regularly cancelled then reinstated.
Mortgage
There was a mortgage on a house deeded to the church free and clear several years earlier. The church took out a loan (rather, a series of loans that was converted to the mortgage) of $100,000 to pay salaries and current bills; $91,156 was currently owed. This payment, $950 a month, was one of the automatic direct payment; a payment arrangement required by the bank.
Direct Payment
The automatic direct payment caused its own problems. On the due date, the creditor would make a demand to the bank account, and when the full amount was not in the account, an “over-drawn” action was issued, with costly penalties (churches are not exempt on this).
Credit Cards
The church had about $55,000 in consolidated credit card bills. The credit cards were destroyed. The monthly payment for this was $1800 and it was another automatic direct payment.
Copier
A copier had been leased under contract a couple of years previously but then it was decided that specific copier was too expensive to operate. The copier was disposed of, but the contract still required payment. Balance owed was $9600. Payment was over two months behind. It had extensive features and capability.
Outreach Program
An outreach program had been started several years earlier with everyone involved being put on a salary. Volunteers ran it for a time then lost interest, but the program continued with paid staff. It still had outstanding obligations, several telephone lines, credit card balances of $4900, and continuing advertising bills. It occupied a suite of offices with extensive equipment, but the volunteers were not there. It was not clear whether the program was currently serving anyone or not, but it was still being paid for. It was unclear whether anyone benefited from the program. Records were vague. Section 18 shows how to evaluate a proposed new program, and how to close it out when it is no longer relevant.
Telephone
The telephone company intermittently cut off phone service. One department would send a runner to the church office when their direct line was disconnected. That usually meant all lines were off. A cell phone was used to call the telephone company to find out about the phones. The bill was indeed overdue, and the service had indeed been cut off.
“Would you like to pay your bill at this time?” A polite voice inquired. No, but there seemed to be no other feasible choice.
“Can I pay part of it now and the remainder in a few days?”
“How much can you pay now?”
Since the whole bill, including last month’s bill, was $1100, I asked about just paying only for the last month. They allowed that.
City Water
City water was cut off the day my volunteer mission began. I hand carried a check to the city water department to get the water back on.
Septic Tanks
One septic tank was backed up and another required weekly pumping. There was no humor to be found here. Pumped weekly at $200 each.
Air Conditioning
Out of a bank of seventeen air conditioning units cooling the main building, three worked. The sanctuary was close to insufferable on Sunday morning, but the response was always “we’re getting it fixed this week.” The fans worked but, there was hardly any cool air. It gave a new meaning to hot sermons. It was to be a long hot summer.
It would have been even longer, and hotter, if the electric company had really turned the power off, but they didn’t. The church was technically in default, unable to meet the obligations that it had incurred. Hour by hour each day I checked to see how much money was available to use. The financial issues were the obvious problems, but the real issue was much deeper.
To gauge how information was passed, I asked various people in the church, “What’s going on with the church finances?” Some of their responses were:
“What do you mean?”
“Is something going on?”
“Seems like repairs are not being done; gets awful hot sometimes.”
“I don’t know but I guess the deacons know.”
“I don’t know.”
“The pastor knows about it.”
“We leave that up to the deacons. They will handle it.”
The real answer seemed to be they did not know what was going on and were not trying hard enough to find out. I will come back to this throughout this book but here is a clue: withholding information does not work and neither does ignoring problems until they become almost beyond recovery. Ignoring a problem produces the same result as denying that there is a problem. The tipping point may be closer than you think.
