# LCMS Convention Workbook_St. Louis Missouri_1998_S73 # Machine transcription, uncorrected — CHI Digital Archive (demonstration) ~~ SYNODICAL REPORTS 73 Districts, educational institutions, church leaders, and other admin- istrative staff receive current updates on tax matters. 4. The Accounting Department has offered its services as an outsource to Districts and other organizations the full range of ac- counting services it provides to other International Center organi- zations. Accelerated use of outsourcing has become a national practice for other private and public corporations. The idea is to free up management resources and hold down expenses. With proper arrangements, significant savings are available to all organizations. The units who utilize the services do not have to invest in equipment or software and staff reassignment can occur. This frees up time and funds to devote to congregations. The bene- fit to the national office is that outsource services will provide a larger base to share fixed overheads. The accounting expertise is already required to provide full services to units currently served. The utilization of outsourcing within the Synod will result in sub- stantial accounting or administrative savings in dollars or time and thereby provide resources for mission and ministry work. Although disappointedly widespread utilization has not occurred, outsourcing services for three Districts and two RSOs has happened. The 1995 synodical convention assigned to the Accounting De- partment of the Synod through resolution certain financial reporting responsibilities. Res. 4-04A, “To Communicate Indebtedness” pro- vides that all synodical entities and agencies annually report to the Accounting Department of the Synod their total indebtedness and plans for repaying that indebtedness. No inquiries have been re- ceived concerning this information. The resolves of 4-04A are shown below: Resolved, That the Synod and all of its entities and agencies annu- ally report to the Accounting Department of the Synod their total in- debtedness and plans for repaying that indebtedness, and that this in- formation also be a part of their report to be included in the Convention Workbook; and be it further Resolved, That the Accounting Department of the Synod compile and report annually the total indebtedness of the Synod and all of its entities and agencies through an official periodical of the Synod and also, in convention years, in the Convention Workbook. A summary of the information, which is based on various fiscal years as reported by the Synod’s agencies and entities, follows. George Horensky, Executive Director Appendix R4-04A The Lutheran Church—Missouri Synod Official Notice Summary of Debt/Repayment Plans Amount Entities Q00’s Plans for Repayment DISTRICTS Capital Debt: Building and Equipment $16,837 $16,321 Budget provisions 516 = Sales Other 20,444 6,199 Budget provisions 12,499 Recovery of principal and interest 1,746 = Sales Operating Debt: _L700 1,700 Budget provisions Total Districts 38.981 CORPORATE SYNOD Capital debt: 7,299 7,299 Budget provisions Operating debt: 940 940 Budget provisions Total Corporate Synod 8,239 EDUCATIONAL INSTITUTIONS Capital debt: 36,425 18,932 Budget provisions 2,225 Grants Building and Equipment 3,786 Sales 7,677 Fund drive 3,805 Tuition and fees Other 3,476 516 Budget provisions 2,960 Sales Operating debt: 15,606 15,606 Budget provisions Total Educational Institutions $5,507 CONCORDIA UNIVERSITY SYSTEM Capital debt: 36,542 36,542 Budget provisions, sales, grants, and fund drives Operating debt: 5.268 5,268 Budget provisions Total Concordia University System 41,810 OTHER SYNODICAL AGENCIES Capital debt: 335 335 Budget provisions Operating debt: 420 420 Budget provisions Total Synodical Agencies 155 GRAND TOTAL 145,292 R4-05 Internal Audit Department The Internal Audit Department provides reviews and indepen- dent appraisals of accounting, financial operating policies, and pro- cedures of synodical boards, commissions, agencies, and separately incorporated units (District, colleges, seminaries, Lutheran Church Extension Fund, Worker Benefit Plans, Lutheran Church—Mis- souri Synod Foundation, etc.). The reviews are to determine the ef- fectiveness and adequacy of policies and procedures to protect the resources and assets entrusted to the respective entity and the de- gree of compliance with those policies and procedures. Reports are prepared based upon the results of the reviews and submitted to the respective board, commission, or agency management/staff for comment and corrective action. The Department conducts financial audits leading to the ex- pression of an opinion in accordance with Generally Accepted Au- diting Standards. In lieu of the performance of a financial audit, Department personnel may assist independent external auditors in the conduct of audit work leading to the expression of an opinion by the external auditor. The goal of these activities is to obtain a more effective level of stewardship of the resources provided to the Synod’s mission and establish a sound basis for the continuing effectiveness of the mission. The Financial Accounting Standards Board and the American Institute of Certified Public Accountants issued accounting stan- dards which significantly impacted accounting for contributions, consolidation of related entities by not-for-profit organizations, and financial statement display. In accordance with Res. 4-03 of the 1995 convention, the Internal Audit Department expended signifi- cant time and resources in assisting synodical units in the evalua- tion of the applicability and the implementation of these and other accounting standards. During the past triennium, the Board of Directors carried out its audit function responsibilities through its Audit Committee. Through the Internal Audit Department, the Audit Committee re- ceived reports of the Internal Audit Department and independent certified public accountants. Annually, the Audit Committee re- ceives and approves the audit objectives of the Internal Audit De- partment. Once approved, the objectives are developed into an an- nual operating plan for the Department. The Audit Committee met semiannually with the Internal Audit Department and independent certified public accountants of the Synod to review the results of audits, status of progress against operating plans, and coordination of internal and external audit functions. At each of these meetings, the Committee had the opportunity to meet privately with the audi- tors without management present to discuss issues of mutual con- cern.