# LCMS Convention Workbook_St. Louis Missouri_2001_S79 # Machine transcription, uncorrected — CHI Digital Archive (demonstration) 78 SYNODICAL REPORTS * On several occasions, representing the Synod during legal pro- ceedings and serving in a mediation role have been special op- portunities for service. It is a great honor to represent and speak on behalf of our Synod and the covenants we have made with each other in our Constitution and Bylaws. Serving as Secretary of the Synod during these past three years has been a challenging transition from former service as a District President, especially given the extensive detail and labor-intensive nature of this office. Much credit is due to the other person in the Secretary's Office, Executive Assistant Pearl Houghton, whose faithful service, pleasant disposition, and tireless eftorts have made a huge contribution to a smooth transition and the efficient opera- tion of this important office. Raymond L. Hartwig, Secretary R7-03 Vice-President—Finance—Treasurer The Vice-President-Finance—Treasurer of the Synod serves as the Chief Financial Officer (CFO) of the Synod. With the restruc- turing of the office that occurred at the 1998 convention, the Synod CFO is not an officer or employee of any Synodwide corporate en- tity other than Corporate Synod (LCMS). On the whole this is a good change, as it clears up any conflict in interests that may have existed under the previous structure, where the CFO was also the CFO of the LCEF, CUS, and the President of the Foundation. One of the most important functions of the office is to keep in- formed about the financial affairs of the Synodwide corporate enti- ties. In this capacity, as required by LCMS Bylaws, the CFO serves as a nonvoting member of the governing boards of the LCMS, the Lutheran Church Extension Fund—Missouri Synod. The Lutheran Church-Missouri Synod Foundation, the Concordia University System, Worker Benefit Plans, and Concordia Publishing House. In addition, the LCMS Bylaws give the CFO the additional re- sponsibility of serving on the investment committee of the Worker Benefit Plans and as a member of the Administrative Team. I take these board responsibilities very seriously. I do not believe that the 1998 convention action that designated me as a nonvoting member has diminished my perceived authority on any of the boards. I am allowed to make any motion, second a motion, and speak freely on any item. But it is clear that my role is viewed as that of a board member and not as management of any of the Synodwide corporate entities. This to a certain extent makes the job more difficult because the LCMS CFO has no authority in any of the Synodwide corporate entities. This makes it difficult to drive change when and where | believe changes should be made. Thus, change typically comes more by influence and persuasion, which does not occur quickly, than by dictate. The Synod has created these separate Synodwide corporate en- tities to add focus and accountability. However, it also creates an environment where an entity measures success as defined by the entity and not by the overall good to the LCMS. While my role is strictly of an influence nature, I believe it is one of the most im- portant parts of my role as CFO—to get the partners in ministry to efficiently work together for the common good of the Synod. I cer- tainly spend the majority of my time on these efforts and consulting with the various partners in ministry to help them solve problems experienced in their operations. Let me briefly discuss some of the things we have accomplished in this triennium. Related to the LCMS: ¢ Appointed a new Director of Accounting ¢ Appointed a new Director of Internal Auditing ¢ Updated and distributed the District Accounting Manual * Updated and distributed the Congregational Treasurers Manual 2001 Convention Workbook ¢ Implemented a new financial data processing system—SCT Banner ¢ Revised and simplified LCMS financial statement presentation « Revised and simplified LCMS cost allocations ¢ Eliminated Board Designated Funds « Reviewed and revised the Synodwide Insurance Program « Assisted in obtaining $10 million in financing for Concordia In- ternational School—Shanghai Related to CUS: ¢ Developed a plan to fund and amortize CUS debt of $47 million ¢ Facilitated tax-exempt financing of approximately $60 million for CUS entities that will save approximately $1.5 million in annual debt-service cost * Developed financial ratios as a management tool to evaluate and communicate financial performance of individual entities ¢ Stressed importance of “tax exempt” vs. “nonprofit” status in many presentations Related to Foundation: ¢ Served as Chairman of President Barry's special task force to in- vestigate the investment loss within the Foundation ¢ Served on two special board committees to assist with restructur- ing the Foundation from a governance and policy standpoint « Served on Investment Committee that conducted a search and re- tained a new investment advisor—Wilshire Associates 1 was also involved in many initiatives of a lesser nature with the Lutheran Church Extension Fund, Worker Benefit Plans, and Concordia Publishing House. Now, let me briefly mention a few things that we need to work on in the next triennium: ¢ Further develop measures of the effectiveness and efficiency of our services and better communicate to the Synod. ¢ Further develop measures for better, timelier monitoring results of our educational institutions and educating all parties. ¢ Further develop financing strategies for the operating and capital needs of CUS-related entities. ¢ Conduct a thorough cash management investment review and im- plement changes to improve contro] and maximize investment earnings. ¢ Develop strategy to deal with decreasing discretionary funds— unrestricted receipts—and its impact on funding the required LCMS infrastructure. As | write this report, it has been almost two years since I re- ceived my solemn appointment as the Chief Financial Officer of the Synod. It has been a busy, but very rewarding two years. We are a wonderful church with great traditions, but we should not be mired in tradition. We need to trust, empower, and change where change 1s needed to be effective in the 2st century. I believe that I have served the Synod well during these past two years, and I look forward to the things that we can accomplish in the next triennium if we work together to be the best possible stewards of all the gifts that God gives us. Paul W. Middeke, Vice-President—Finance—Treasurer R7-04 Board of Directors The Board of Directors, as trustees of the Synod under its Con- stitution, primarily deals with the fiscal, legal, and property mat- ters of the Synod. During the past triennium, the Board has directed its attention to its responsibilities with three emphases: PARTNERS, PERFOR- MANCE, and PEOPLE. PARTNERS The Board views congregations as both the heart and head of the Synod. To better discharge its responsibilities, the