# LCMS Convention Proceedings_St. Louis Missouri_1950_S226
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

246 SEMINARIES AND COLLEGES

fully presented to the examiners in the process of accrediting
institution. The new system of accounting and control has me
with such approval that the examiners have referred other, schools
to our River Forest business department for study and adaptation
of this system to their own needs. 7
The Board, for Higher Education is ,prepared . to gradually
introduce the basic elements of this system in all of Synod’s eo}.
leges and seminaries where conditigns indicate that it can render
the proper service and where it is feasible to carry out its provisions.
In this development process, during the past triennium, the
Board of Directors and Mr. Walter Schlueter, the treasurer of
Synod, have been: fully co-operative through the prompt discharge
of their assigned responsibility to prescribe a uniform accounting
system for.our colleges and seminaries and by making available any
funds required for its. development and introduction.
"Since this system has now been introduced, the Board for
Higher Education believes that it will be in the interest of efficient
administration and that it will remove a handicap to accreditation
if an adjustment. can be undertaken in Section 6.141 of the Hand-
book.. _We.recommend therefore
_. MBhiat: the words:“The Board of Directors: of Synod, in conjunc-
tion with” be deleted from Section 6.141 so that the revised section
will read: Ne.
. 6: 41: Uniform Accounting. Methods ‘
“phe Board for Higher Education shall establish and pre-
"seribe, on the’ basis of reasonable and generally accepted
ediicational practice, uniform accounting methods, financial
controls, budgetary classifications, ‘and allocations for operating
: income ’and costs and for capital investments of each of the
educational institutions of Synod.” - . ©. :

a Handbook Section 6.145 a

_ The past triennium has been the first. in the ‘history of our
Synod in which the educational institutions set. up regular budgets
of their income and expenditures and applied for synodical sub-
sidies on this basis. In the process of introducing budgetary control
we: have naturally..encountered some difficulties and problems.
Chief ‘among thesé is‘the traditional practice of separating the

maintenance and. repair. ’costs (traditionally: known as “summer.

repairs”) from the budgeted funds of the institutions. In the past
such “expenditures have been handled on a basis which requires
the institutions to apply for individual amounts on an emergency

basis if they were needed during the course of a school year and.

of submitting accumulated annual needs in the spring of the year
in order to receive a grant for “summer. repairs.

SEMINARIES AND COLLEGES 247

Several factors contribute toward making this an unsatis-
factory practice. Under this procedure it is not possible for the
institutions to take advantage of favorable seasons for maintenance
and repair. In addition, some of the largest spenders of such funds
are in operation throughout the summer and are therefore no longer
in a better position to perform this work at that time, as they once
were. Frequently also, important maintenance operations are post-
poned to a period when they become more expensive than would
have originally been the case if they could have had prompt atten-
tion. It is impossible, also, under this system for the institutions to
plan a regular program of systematic maintenance and repair.
Finally, the exclusion of maintenance and repair from the budget
of the institution gives Synod a distorted picture of the costs of
education.

It is only a reasonable procedure to bring the entire main-
tenance and repair operation within budgetary control. If this
practice were followed, then Synod would know approximately
what its expenditures for the purpose will be at the time when
a new budget is set. Past practice has relied upon an estimate of
this rather large sum of money (up to $300,000) and has, as
a result, frequently been as much as $50,000 to $100,000 short of
the actual final expenditures for the purpose. This causes a serious
dislocation of the over-all budget of the Missouri Synod and should
be avoided if possible.

Another area which has caused some concern to the Board
for Higher Education is the distribution of Student Work Funds.
The disbursing agency of Synod has taken the position that funds
used for this purpose could not be included in the budgets of the
institutions because some of the funds thus used have been allo-
cated from earnings of undesignated legacies. It appears to the
Board for Higher Education that Synod’s best interests require
that all subsidies which Synod furnishes to a given institution
should be placed under budgetary control and that a sound admin- —
istrative policy of budgetary control will require also that an insti-
tution be held to budget all of its funds. Accordingly, the Board for
Higher Education recommends adjustments of Section 6.145 of the

Handbook so that the section will have three paragraphs reading
as follows: ;

6.145 Budget for Operation of Institutions
“a. All funds which an institution receives from Synod
shall be budgeted and shall be subject to budgetary control.
“b. Each Board of Control, in the month of May of each
year, shall prepare and submit to the Board for Higher Edu-
tion a -detailed estimate of the income, costs of operation,
replacement of equipment, maintenance and repairs, student