# LCMS Convention Workbook_St. Louis Missouri_2004_S85
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

SYNODICAL REPORTS 85

and called teachers. Board of Directors members must be communicant
members of congregations that are members of The Lutheran Church—
Missouri Synod. Eight Directors will be elected by the Members. Three
Directors will be elected by The Lutheran Church—Missouri Synod as-
sembled in convention and shall include one ordained or commissioned
minister of The Lutheran Church—Missouri Synod and two laypersons.
The Treasurer/Chief Financial Officer of The Lutheran Church—Mis-
souri Synod shall be the twelfth Director, with voice but no vote. The
elected members of the Board of Directors shall have an understanding
of the effects and purposes of this Corporation and demonstrate an ex-
pertise in fields and areas closely related thereto, such as knowledge of
real estate, management, and financial planning. No more than two
elected Directors can be from the same District of The Lutheran
Church—Missouri Synod.

Board for Church Extension Fund

The LCEF Board of Directors also functions as the Board for
Church Extension of the LCMS and is grateful for the strong work-
ing relationship and partnering which exists with the seven districts
(as of Jan. 1, 2004) that still retain separate Church Extension Fund
operations.

As a reflection of the total activity of Church Extension in the
seven Districts, the total assets as of June 30, 2003, are
$498,896,975 compared to $394,865,223 three years earlier.

During this triennium, the Board for Church Extension con-
vened a committee to review and revise guidelines and reporting
procedures for the separate CEF operations. All remaining Districts
have adopted the recommendations of the committee. CEF Districts
that are not within standards are making progress to address the
differences.

Jon R. Schumacher, Chairman
Merle Freitag, President

R4-03
Accounting Department

The Accounting Department maintained all budgetary, finan-
cial, and accounting records for Corporate Synod on behalf of the
Vice-President—Finance—Treasurer. Cash receipting and certain
treasury/banking functions were also performed on the Treasurer’s
behalf. The department provided similar accounting, cash receipt-
ing, and treasury services for the Worker Benefit Plans, Pension
Plan for Pastors and Teachers, Office of Information Systems,
Radio Stations KFUO AM and FM, Concordia University System,
LCMS Holdings Limited, and several Districts of the Synod. The
Department provided payroll and accounts payable services to The
Lutheran Church—Missouri Synod Foundation and the Worker
Benefit Plans, and performed payroll services for The Lutheran
Church Extension Fund and several Districts of the Synod.

The department prepared checks of all disbursements for the
above entities based upon appropriate approvals, served as the cus-
todian of payroll and payroll-related records, and published and
disseminated financial and management reports for all entities
served. The department prepared and filed tax and other compli-
ance-related informational returns to various state agencies and fed-
eral tax authorities. The department continuously monitors compli-
ance with federal and state tax matters for corporate Synod and
certain other related entities.

During the past triennium, the Accounting Department prepared
or assisted in the update and publication of several documents de-
Signed to assist congregations, schools, pastors, and teachers by
providing pertinent tax, accounting, and personnel guidance on
matters specifically related to not-for-profit and church-related or-
ganizations. In each of the past three years, the department pub-
lished and disseminated through District offices, and now widely
available on the Internet, the Congregational Treasurer's Manual

and provided assistance in developing and coordinating needed ma-
terials for the annual Joint Business Administrators Conference.
Along with these documents, the department assisted church work-
ers by responding to over 1,000 telephone inquiries on tax and pay-
roll matters annually. Additional guidance and tax updates were
provided by the department through publication of a Tax and In-
formation Guideline for Ministers of Religion. Timely Tax
Thoughts articles appeared in official publications of the Synod and
were posted on the Synod’s Internet Web site. In each of the past
three years, the department responded to invitations by Concordia
Seminary, St. Louis to participate in its annual Financial Planning
Workshop attended by fourth-year students and spouses.

Charles E. Rhodes, Executive Director

R4-04
Internal Audit Department

The Internal Audit Department provides independent appraisals
of accounting, financial reporting, and operational activities of
boards, commissions, and agencies of the Synod as requested by
their governing boards or the Synod’s Board of Directors. The
scope of the Internal Audit function includes examining and evalu-
ating:

* the adequacy and effectiveness of internal controls,

* the accuracy and reliability of financial reporting, and

* compliance with applicable policies, procedures, laws/regulations,
and/or accounting principles.
The Department conducts all audit work leading to the expres-
sion of an opinion on the financial statements in accordance with
generally accepted auditing standards established by the American
Institute of Certified Public Accountants. In lieu of performing a
financial audit, department personnel may assist independent ex-
ternal auditors in the conduct of audit work leading to the expres-
sion of an opinion by the external auditor. All other types of audits
or reviews not leading to the expression of an opinion on financial
statements are conducted by Internal Audit in accordance with stan-
dards published by the Institute of Internal Auditors.
Reports are prepared based upon the results of the audits or re-
views, and submitted to the respective synodical board, commis-
sion, or agency for comment and corrective action.
The goals of the above-listed activities are to ensure the assets
and resources of the Synod and its components are properly safe-
guarded, and to obtain a more effective level of stewardship of the
resources provided to the Synod’s mission.
To promote independence and enable the auditors tq maintain
the objectivity to render unbiased opinions, the Internal Audit De-
partment is accountable to the Synod’s Board of Directors through
its Audit Committee. Administratively, the Internal Audit Depart-
ment reports to the Synod’s Vice-President-Finance—Treasurer.
Annually, the Audit Committee reviews and approves the In-
ternal Audit Department’s objectives for the upcoming fiscal year.
Once approved, the objectives are used as a basis for developing
the department’s annual budget, determining staffing requirements,
and scheduling specific audit or operational review engagements.
During the past triennium, the Executive Director of Internal Audit
and representatives from the Synod’s external auditors met with
the Audit Committee on a semi-annual basis to:
¢ review and discuss the results of all financial audits or operational
reviews conducted by the Internal Audit Department or indepen-
dent certified public accountants,

¢ provide the committee with a status report on the progress
achieved in meeting the department’s annual objectives, and to

¢ discuss the coordination of the internal and external audit func-
tions, which is necessary to avoid duplication, promote efficiency,
and maximize audit coverage.

2004 Convention Workbook