Finance Committee FAQ2

Budget and Reporting System

Currently RCOS maintains separate accounting functions for (1) the Lakin Preschool, performed as a free
service by the staff at the Jewish Federation of Reading and (2) all remaining RCOS activities, which fall
under the purview of our bookkeeper, Beth Bruck. For this discussion we will address the RCOS
activities exclusive of the preschool.

The budget and reporting system is implemented within the Temple’s management software, Rakefet.
For budget reporting and tracking, we have developed and refined financial reports that only deal with
operating revenues and expenses. As a result, we report monthly on 116 accounts, a subset of the 489
accounts contained in our Chart of Accounts. As an example of excluded accounts, we run Mt. Sinai
Cemetery and the Cemetery Fund. They are a part of our books, but since we have little control of the
sale of burial lots or the number of burials and their attendant costs, we don’t include these accounts for
our routine budgeting activities.

The first step in budget preparation is line by line budgeting. We segregate the operating accounts into
the committees and/or individuals responsible so that the most knowledgeable people can estimate for
next year. For example, the building’s operating costs including utilities are submitted to the House
Committee chair for estimation. To assist them, historical data for the past three years as well as a
projection for the remainder of the current year are provided for reference. The chairs submit their
budget requests to the Treasurer who works cooperatively with the Finance Committee to draft a
budget for Board Consideration in April, so that a final budget can be approved before the June closing
of the current year.

During the year, Committees are authorized to spend their budgeted funds without further approval.
However, costs in excess of budgeted levels or requests for unbudgeted costs must be approved by the
Board. The Bookkeeper records revenues when they are received and expenses as they are paid. Each
month the Treasurer circulates the current month’s operating report showing monthly and cumulative
costs to date for each of the 116 line items. In order to properly monitor costs, the reports indicate the
actual costs for the previous year as well as that budgeted for the current year. In addition, the reports
formulaically forecast estimates of year‐end results. The Finance Committee reviews these reports in
detail each month as one of the first items on its agenda. After any questions have been resolved the
report is sent to the Board as part of the Treasurer’s report for their further review. A summary of these
results are also posted monthly on the Temple’s website in the Members‐Only section under the
heading Reports and Minutes.