# LCMS Convention Workbook_St. Louis Missouri_1981_S352
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

12. PROGRAM IMPLEMENTATION

12-01
Report of Treasurer

The work of the office of Treasurer is involved in many ways
throughout the reports of other boards, commissions, and
agencies. The Treasurer serves as a member of the Synod’s
Board of Directors, as a member of the Board of Trustees for
Trust Funds, as a director of Lutheran Church Extension
Fund, and as a trustee for The Lutheran Church—Missouri
Synod Foundation. Since the Treasurer’s office serves the
accounting and finance administration needs of all the afore-
mentioned, a major amount of time is given for the purpose of
attending meetings and hearing the reports, accomplishments,
and opportunities of various boards and committees. The work
of our Synod is far more involved than most people realize,
primarily because the Synod has seen fit to develop more than
50 separate corporations for administrative convenience with-
out clearly prescribing lines of authority and responsibility one
to another. Such lack of clarity prevents the Synod from being
a dynamic organization and causes ample opportunity for
frustration and duplication of effort. Technology has ad-
vanced, and so must institutions like our Synod so that every
advantage can be taken of more effective and efficient ways of
managing the collective resources placed in our care. When an
organization loses simplicity, it is no longer able to respond to
that for which it was organized.

Most are aware of the large deficit spending that has
occurred during the past four years at the request of the
conventions. Most, however, are not aware of the additions to
the current fund deficit which have occurred because of
accounting changes made necessary to reflect properly the
financial position of the Synod. In years gone by, accounting
practices were utilized which no longer meet accounting and
reporting requirements. While the Synod has long been audited
by outside auditors, former practices and procedures do not
meet the new standards for not-for-profit religious organiza-
tions. Several of your administrators have long supported new
standards, believing that such changes in practice and pro-
cedure would result in a better informed decision-making
process and would provide the constituency with more mean-
ingful information relative to the work for which they have
made contributions.

The change in the fiscal year from Jan. 31 to June 30 has
resulted in numerous difficulties in comparing information.
While all colleges and seminaries are on the same fiscal year as
the Synod, the Districts are still using a Jan. 15 year. There is
no desire to change that, but it does mean that reports to
Districts must be made on a calendar year basis, whereas
reports of the national programs of the Synod will be made ona
fiscal year basis, beginning July 1. This change has resulted in
Synod’s year ending at the point in the calendar when its
income is in the worst possible condition. A year ending June
30 will show a deficit approximately $3 million greater than
would ordinarily be the case as of Jan. 31. This has been quite
confusing to those who do not work with the data on a regular
basis, but the change does get us to a point where we look at the
facts for what they are and also vividly reminds us that we no
longer can utilize funds of a “restricted” nature without paying
interest. In the past, when the summer lean months came,
funds were “borrowed” without interest. Since this practice
has been stopped, we have an interest expense, which in years
past would not show up on the financial reports. The 1979
convention action authorizing payment of interest for surplus
funds of the colleges on deposit with the Synod has also
resulted in expense, but at the same time it has brought back to
the synodical treasury several million dollars which were
previously invested locally and therefore not available for the
use of the Synod generally. The program is working well, and
will continue to improve as all institutions understand the need
for full cooperation.

The deficit of the Synod, regardless of whether you choose to
think about it as of Jan. 31 or June 30, must be brought under
control! The size of the accumulated deficit, though small ona
per capita basis, is extremely expensive to maintain in this day
of high interest rates; interest expense for fiscal year 1979 was

351

$166,000 while for the 12 months ending Jan. 31, 1981 it was
$1,095,000. In a voluntary organization like the Synod, it is
difficult to determine the amount of annual income; conse-
quently, deficits cannot be adequately liquidated nor can
program planning be done on a meaningful basis. In the past
four years, it has become increasingly evident that we adopt
budgets based on a “knee jerk” reaction. Changing the fiscal
year only allows more time to deal with the reality of the
income expectations but has done little to assist in dealing with
the crisis at hand.

The following thoughts are presented for consideration as
ways we can better accomplish the objectives of the Synod as a
whole and provide for a decision-making process that will
work. I ask your indulgence for taking up space for what many
would not see as the responsiblity of the Treasurer, but
someone must say something about this crisis the Synod is
facing.

Financing

The current financing with regard to mission and ministry
within the LCMS, its colleges, and Districts has become an
impossible maze. No one planned it that way, it has just been
allowed to happen. At least that is what the recording of events
of the past would suggest.

Congregational budgets currently supply well in excess of
$50,000,000 for the work of the Synod at large. Approximately
$25 million of this is retained at the local District level by
independent action ofits Board of Directors; an action which is
made 38 separate times and for which there are no standards
as to the criteria for such decision. While we have changed the
fiscal year at the national level of the Synod in order to respond
in a more intelligent manner to the actions of the congregations
and subsequently the Districts, we have not produced a
mechanism to fund the necessary programs of mission out-
reach that our people have a right to assume we are doing in
their behalf. Worse yet, we cannot start new programs or go
through open doors, because no mechanism exists for making
intelligent decisions to discontinue “priorities of the past’; we
don’t even have a process whereby this is discussed!

Districts

The problem of financing has become so severe that the
Synod must either take the prerogative of going directly to the
congregations and the membership with its national programs
or the Synod in convention must resolve that only certain fixed
costs of each District can be budgeted from the pledges of the
congregations with the funding necessary for the balance of
the District program to be provided by the collective balance of
such pledges based upon priorities between all Districts and
national program/mission opportunities. At the very least, a
percentage agreement must be entered into with each District
each triennium so that as District remittances increase the
local and the national programs are treated equally. The
distribution percentage or amount would be agreed to jointly,
but could not be altered within the three year time frame. Such
a system would allow intelligent planning to occur and would
provide a thorough discussion of priorities locally versus those
that have been agreed to in the past as necessary functions of
the Synod at large. (Bylaw 9.02 b has not worked so far!)

Board for Higher Education—Seminaries/Colleges

Over the years the percent of total costs of operating
seminaries and colleges that has been supplied by the Synod
has decreased markedly. As this has occurred, greater and
greater encouragement has been given to the seminaries and
colleges to “raise your own funds.” Such fund-raising has had
mixed results. Unfortunately, it now includes colleges being
included in certain District budgets and asking to be included
in congregational budgets in the local area of the school. While
it is indicated that this should be above the amount for
Missions, District, and Synod, there is little evidence to suggest
that this actually occurs—or if it occurred initially that it
continues to be the case. Consequently, in a very real sense, we