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04 Jan 2018

URGENT: "Oh no! We have no minutes!"

Raul Rivera

At the beginning of each year, almost all churches and ministries are preparing for their legally-required annual board meeting. This meeting is where much of the business and vision of the church is approved and put into action. A critical component of that meeting is reviewing your church’s prior board meeting minutes. 

The truth is, churches and ministries will live and die by their board meeting minutes. In an IRS compliance audit, what your minutes do or do not document could sink or save your church. 

Topics for which you should hold board meetings and take board meeting minutes are as follows:

  1. Salaries and any type of compensation for pastors, staff, and board members.
  2. Approval of love offerings taken up for the pastor.
  3. The ordination of any and all ministers of the church.  
  4. Financial reports of the income and expenses for the church. You must show that the directors have reviewed the reports and have approved them according to the voting procedures outlined in the church bylaws.
  5. Approval of policies and procedures. For example, does your church have an accountable reimbursement policy that aligns with IRC section 62?

While this list could go on forever, these 5 specific items represent legal mandates for board meeting minutes. 

But, at this point we often hear pastors, say, “Oh no! We have no minutes!”

I have great news!

If board meetings and board meeting minutes have been neglected by your church in the past, a special board meeting to approve prior acts may be necessary to help your church or ministry remain in legal compliance.

While the ideal situation for any organization is to have perfect records of all meetings and all decisions made from the very beginning, this is not always the case. 

This special board meeting will apply the concept of the ratification of prior acts, which is when the board meets for the express purpose to retroactively approve decisions made in the prior year.

Although there is no way to take minutes for a board meeting that happened in the past, there is a way to approve the decisions that were made in the past.

How to ratify prior acts in a board meeting 

1. Do your research

When holding a board meeting in order to approve prior acts, it is pertinent to research as much information about all prior acts as you can. The more information you can gather, such as dates and names of board members who were present at the time, the better. 

Answering the following questions will help you prepare for this specific board meeting:

  • When did you meet?
  • Where did you meet?
  • Who was present?
  • What was discussed?
  • What was voted on?
  • What was decided?

In addition, you should review calendars, previous emails and notifications to the pastor and the board. This will help you piece together acts from previous board meetings that were never recorded in board meeting minutes. Take note that if precise dates and times are unknown, you may use a best faith estimate for such instances.

(Recommended reading: "Do You Know How to Take Board Meeting Minutes?")

2. Review last discussions and decisions

During the board meeting, your board should discuss when past decisions of the board happened. Make sure you do more than research, make sure you re-discuss the topics. The point is to give time needed for all board members present to recollect their decisions - both the way they voted and why they voted the way they did. 

3. Take a vote

It may seem like a given, but make sure that during this meeting you take a vote to approve those acts retroactively. Remember, you are giving legal precedence to the decisions you made at a board meeting, and there is no better way to do that than through a vote of the board of directors. Use the standard voting procedure of your church, noting who was present, what was voted on, and how each person voted. 

4. Use your ministry corporate records book

Remember, decisions that are made at board meetings must be noted in the board meeting minutes to be considered official decisions of the church. 

The rule is simple, “No minutes . . . no meeting.”

For this reason, we suggest you keep your board meeting minutes, and other governing documents, in a ministry corporate records book. It is also best practice to have these important documents backed-up and saved digitally.

In the instance of a church audit, which is governed by section 7611, one of the first items the IRS will want to examine are your church’s board meeting minutes. When you keep them in one location, such as a ministry corporate records book, it makes for easy access and helps prevent board meeting minutes from getting lost.

Our Ministry Corporate Records Kit™ stores your board meeting minutes, allowing you to keep a working copy at your church or ministry office at all times. This is a must-have for any ministry seeking to create a strong, legal foundation.

Schedule your special board meeting now

Leading a church or ministry into legal compliance is not an easy task. One of the most important steps is holding and documenting proper board meetings. If you have lost track of or have been negligent in proper documentation through the use of board meeting minutes, don’t delay - use the concept of ratification of prior acts to help get your church or ministry back on track. 

At StartCHURCH, we would love to partner with you in 2018. Our desire is to see you walk more confidently in your calling and to help you protect what God have given you to lead. 

I invite you to join us at one of our upcoming Ultimate Church Structure Conferences. With information on church compliance and strategies for expanding your ministry,this conference is just what you need to start strengthening your ministry’s legal foundation in 2018.

Register for a Conference Today!

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Please feel free to comment. We always appreciate good dialogue. However, we do moderate each comment to ensure that it is on topic and not derogatory to other participants. We ask that you keep your comments brief and pertinent to the topic so that others may benefit.

Blessings,
Raul Rivera

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About the Author

Church Planter. Speaker. Author. CEO. Raul Rivera has had ample experience in the church planting world. His current venture, StartCHURCH, has helped 1000's of churches to start right. Raul has compiled an array of manuals and software tools that help churches stay compliant with the IRS. He also hosts over 35 national conferences per year, training pastors on how to launch their churches. Raul is married to his wife Genel, and they and their five children live in Atlanta, GA.