We’re going to cover three things , the audit report, which must be approved by the assembly, the treasurer’s report, in which I hope to show you how our finances have evolved over the past few years, and the proposed budget for 2013.
The audit found no deficiencies in the procedures and accounting. Therefore, the synod council recommends approval by the assembly. You should note that the audit statement shows additional material to that in the comparison of yearly budgets. In particular it shows the investments and the gains and losses on page 5. At this time I bring to the floor the motion from the synod council to for the approval of the Audit Report.
The salient feature controlling the financial operations is the decline in Mission Support over the last three years About 70% of the decline is due to economic conditions – primarily the rise in unemployment in 2009 following the monetary crisis after the fall of Lehman Brothers in 2008 About 30% of the decline is due to churches that have left the synod, including two churches who have left during the last year.
This shows cumulative mission support received from the congregations during the year. We show it this way instead of month-to-month to minimize the variations due to 4 vs 5 Sunday months and the timing of Easter. As you can see, the decrease started in July 2008, and most of the differences between 2008 and 2009 are in the first six months. The first three months of 2012 are shown, and look very similar to 2011.
The salient feature of the 2011 income is that the decrease in mission support has levelled out, and the payroll covered by churchwide and other organizations that are covering the shared staff (including mission pastors) has also become constant. Additionally, no church facilities were sold in 2011.
The largest item in the operations is payroll. Here you can see the decrease in the synod staff and the support staff since 2008. The payroll numbers represented here include payroll taxes, worker’s comp and benefits. Note the large increase in the payroll for mission developers.
This is a snapshot of the staff supported by the the synod directly, not including pass-throughs.
The substantial increase in 2007 was due to the sale of First Lutheran, LA that year The sharp drop in 2008 was due to the decrease in the stock market after investments in the ELCA Endowment Pooled Fund, which has now mostly recovered Note that the now almost all of the equity placed has been placed in endowment accounts (primarily the Mission and Ministry fund and the First Lutheran LA fund) We are keeping about $300k in checking accounts at the end of 2011 which is a prudent amount in light of the cash flow requirements
The decrease in mission support to the synod accounts for the decline in the grants given out from the operating fund (shown in the budget). However, the FLLAF and the Mission and Ministry funds, both invested by the Endowment committee have more than made up for the decrease, making the grants in 2011 the largest in the period.
The budget for 2013 is based on the actual spending profiles since 2010 with only incremental changes We greatly appreciate the mission support that you in the congregations have provided in these difficult times. As the economy recovers, we ask that you increase your mission support to the extent that you are able. In the 2013 budget, the percentage of mission support to Churchwide has been raised from 49% to 50%.
The largest piece of income (2/3) expected is the mission support from the churches, which is the lifeblood of the synod. We are just projecting an amount similar to the previous year’s receipts. The deployed and managed staff support is from churchwide , for deployed staff, mission developers and managed payroll which includes redevelopment. This amount includes support from congregations for new starts. We expect roughly this amount, but have not received a commitment so it is a pass-though to the item in the expenses.
The three big expenditures are, of course, payroll for synod , deployed staff and mission support to churchwide. We anticipate grants from the operating budget about the same as the 2012 amount, the amount of grants that may be made from the endowments depends on the performance of the ELCA Endowment pooled fund, and is not shown in the budget.
The bottom line is that we will likely need to draw on our reserves in 2013 to the amount amount of $224k Note that despite an expected loss for 2011 of $129k, we actually had a net income of $34k You should note that you are really approving is a limitation on expenditures - and we will institute a spending plan if necessary during the year Finally, I’d like to thank Nancy Ackerman and Andreas Hirsch of the synod staff for their great work in managing the synod finances and for working on the preparation of the budget and financial reports This concludes the financial reports section. Tomorrow morning, we will vote on the budget.
Synod Council Treasurer Report - 2012 Synod Assembly
Synod Finance Reports
Topics• 2011 Audit Report• Treasurer’s report for 2011• Recommended Budget for 2013
2011 Audit Report• The 2011 Audit report finds no deficiencies in synod financial procedures• The form of the audit report differs from that used in the income/expense statement as it is “unitary” instead of an operating budget• The Synod Counil recommends approval by the Synod Assembly
Report for 2011• We are dealing with a $490k (30%) decline in Mission Support since 2008 – $340k is due to economic conditions – $150k is due to churches leaving synod or withholding support (two additional churches have departed)• We’d like to show how the synod finances have evolved over the last seven years
Introduction to the 2013 Budget• This budget contains minor changes from the 2012 Budget – We recognize that Mission Support from congregations will be likely be tight until the economy improves and would like to thank the churches for the support that they have provided in this difficult time• Mission Support to Churchwide has been raised to 50% of Congregational Mission Support.
Expected Income Deployed & Managed Staff Mission Support $276k $1061kDisbursements$195k Interest $45k
Expenses Administration, Mission Teams Council & $49k Committees Mission $192k Support to Churchwide $531kDeployed Staff &Managed Payroll$276k Grants $126k Payroll & Staff Expenses $677k
The Bottom Line• For 2013, we expect a net loss of $224k, which will be drawn from reserve accounts.• You should note that what you are approving is a maximum on expenditures – If income falls below projected figures, we will institute a spending plan with smaller expenditures