Does your church have cribs in the nursery? Do you operate a childcare center that has cribs? If you answered “yes” to either question, there are new federal regulations that apply to you—and unfamiliarity with them could lead to substantial penalties and civil lawsuits for your church.
Beginning June 28, 2011, traditional drop-side cribs may not be sold in the United States, nor can repair kits or other remedies be used in an attempt to make them safer. Under new guidelines, cribs with wood slats must be made of stronger wood, crib hardware must have anti-loosening devices, crib mattress supports must be more durable, and safety testing must be more rigorous. These regulations apply to churches if they sell or otherwise dispose of noncompliant cribs on or after June 28, 2011.
Another key requirement of the new regulations takes effect on December 28, 2012. On and after that date, any crib that is used by a childcare facility must meet the new safety standards. The law does not define “childcare facility,” but the U.S. Consumer Product Safety Commission has clarified that “we consider a childcare facility to mean a nonresidential setting that provides childcare services … for a fee.” This means any church operating a childcare facility for a fee must comply with the new standards.
The CPSC says a church nursery that operates during worship services, that does not charge a fee for its services, and that does not compensate workers, is not a childcare facility subject to the new regulations. It is not clear whether a church that decides to compensate its nursery workers would be considered a childcare facility. Church leaders should play it safe and regard such a nursery as a covered childcare facility given the many consequences that may result from assuming the church is exempt.
Also, the continued use of noncompliant cribs still may expose a church and members of the church board to a civil lawsuit—even if the church does not meet the definition of a “childcare facility.”
—Excerpted from “Securing Cribs in Your Church’s Nursery,” by Richard R. Hammar (Church Law & Tax Report, September/October 2011).
Casting out Cyber Crime
Computer hackers stole $680,000 this summer from a church in Iowa. During the National Association of Church Business Administration’s annual conference, author and CPA Verne Hargrave offered these six tips to help churches ward off cyber criminals:
Establish dual controls. Have at least two people involved in every account, every cash collection, and every cash payment system. With electronic funds transfers, separate the three processes (bill approval, bill preparation, and bill transfer).
Dedicate a stand-alone computer. Use it only for electronic funds activity. It shouldn’t be tied to an individual and it shouldn’t have access to other financial databases. Limit its online activity. Keep its antivirus and firewall protection updated.
Limit administrative rights. Only those with specific needs for accessing electronic financial activity should have access to the computer used to do it.
Reconcile your church’s bank accounts daily.
Change passwords. Regularly change them, preferably with a new password that combines upper- and lower-case letters, one numeral, and one symbol.
Don’t e-mail files. Use secure connections for any electronic file transfers.
Fees-Fi-Fo-Fum
Q: The electronic giving services we looked into for our church charge a fee plus a percentage of the gift. How does that work for accounting purposes?
A: “The administrative fees are an expense to the organization,” says Michael Batts, an editorial advisor for Church Law & Tax Report and a nonprofit CPA based in Florida. “The gross contribution amount is revenue to the organization and is also the amount deductible by the donor. The contribution acknowledgment should reflect the gross amount of the gift.”
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