LCMS Convention Workbook St. Louis, Missouri — 2016, Page 59

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OFFICER, BOARD, AND COMMISSION REPORTS
A number of election matters were addressed by the board, including the responsibility to review and approve the five regions into
which LCMS districts are grouped. The board, acting jointly with
the Council of Presidents, retained the same boundaries that were
set three years ago.
The board has submitted a number of overtures to the 2016 convention. The first overture is to enable the board to carry out its
responsibility of managing legal, property, and business matters in
a more orderly manner. A second overture is intended to assure uniformity of relationship and asset disposition language in governing
documents of corporate agencies of the Synod. A third overture will
serve to clarify and confirm the distinction between Synod and corporate Synod and to provide consistency for the meaning of “Property
of the Synod.” A fourth overture proposes to revise and enhance
the nomination and election process for regional members of the
Board of Directors and the mission boards. Finally, we have proposed the formation of a Recognized Service Organization (RSO)
Task Force to review the program and offer recommendations to the
2019 convention.
Financial Condition of the Synod
The Chief Financial Officer has reported that the Synod finished
the 2013−14 fiscal year with a gain in unrestricted, undesignated net
assets of about a half million dollars. The Chief Financial Officer
reported that at the end of the 2014–15 fiscal year, the total assets of
the Synod had decreased by approximately $1.8 million, accompanied by a decrease in liabilities of $5.2 million. Total revenues were
$64.1 million and expenses totaled $63.6 million, resulting in a yearend surplus of $.5 million. Ongoing deficit reduction efforts reversed
slightly, largely due to the application of a new vacation-leave-accumulation policy. The Chief Financial Officer reported for the period
ending November 2015 that receipts and spending compared to budget were largely falling within their norms for the current time in the
fiscal year. More detailed information is provided in the report of the
Chief Financial Officer of the Synod, below.
The board approved the distribution of $944,065.06 in surplus
funds from those budgeted for the 2013 LCMS convention. Of that
surplus total, the board designated $250,000 to meet costs arising
in connection with the 2016 convention, $494,000 for distribution
back to LCMS districts, and the remainder toward funding the cost
of convention-mandated task forces, study groups, or other activities.
National Office Compensation
The Board of Directors is responsible for determining the compensation of the employees of corporate Synod. In 2006, the board
adopted a compensation philosophy that states: “At the International
Center of the LCMS, our compensation philosophy is simple: In striving to be good stewards of the dollars entrusted to us, we shall pay
fair salaries in a fashion which rewards performance in order to be
able to attract, motivate, and retain employees.” Since that time, all
positions are reviewed on an annual basis. Compensation may change
from one year to the next based on position classification and performance. All corporate entities at the International Center (LCMS,
LCMS Foundation, Lutheran Church Extension Fund, and Concordia
Plan Services) use the same salary scale. The board approves the
individual salaries of Synod officers as well as a salary pool for the
corporate Synod staff each year, as appropriate.
Minutes of the Board of Directors
The minutes of the meetings of the Board of Directors are available on the Synod’s website. The board does hold open meetings,
although parts of each meeting are conducted in executive session.
Some items of business (e.g., legal, personnel) are, for obvious

59

reasons, conducted with only the members of the board involved.
Thus, the minutes of these executive sessions are confidential.
The members of the Board of Directors express their sincere
thanks to the Synod for the special privilege afforded them to serve
the Lord and The Lutheran Church—Missouri Synod.
Michael Kumm, Chairman
Report of the Chief Administrative Officer
The preponderance of the business, legal, and administrative
responsibilities of the Board of Directors are carried out by Chief
Administrative Officer (CAO) of the Synod, who serves as the
board’s Chief Operating Officer. During this past triennium, in addition to day-to-day business and management and other administrative
responsibilities, the CAO spent focused time in three specific areas:
1. Review of Corporate Management Programs. We continue
to work to identify opportunities to create greater operational efficiencies and controls in the administrative processes of the organization.
A number of projects were undertaken or completed during the past
triennium. They are summarized below.
Signature Authority: A complete review of signature authority, including account codes and personnel, was undertaken during the past
triennium. This review focused on the administrative policies and procedures related to the delegation of signing authority for purchase orders,
check requests, corporate credit cards, etc. As of July 1, 2014, every
employee with authority to sign financial documents has submitted a
revised signature specimen, which accompanies a list of account codes
for which their signature is valid. A process is in place that requires all
signatures to be on file with proper authorization before the accounts
payable office is able to process any financial documentation. The system can be electronically updated and is being used on a real-time basis. In addition, a signature authority verification process is conducted
annually, wherein department and organizational leadership review for
accuracy all information that is then active.
Independent Contractors: In coordination with the Synod’s general
counsel, a series of independent-contractor agreement templates were
developed and placed into production in order to assist the national office program leaders in procuring the services of individuals outside the
organization. As a result of these efforts, a new process was implemented in FY14 that assures that (1) every engagement for personal services
is identified and tracked; (2) departments submit a “contract builder”
form that contains the details regarding the intended engagement; (3)
this information is placed into a centralized process for contract development, including a thorough review of the request by administrative
management units and legal counsel, as necessary.
Corporate Credit Cards and Expense Reimbursement: All creditcard and expense-reimbursement policies were updated and revised in
October 2014. In addition, the Synod’s corporate credit-card program
was modified in January 2015 to include two cards: (1) the Travel Card,
which is used for domestic and international travel-related expenses,
and (2) the One Card (i.e., purchasing card), which is used for lowdollar purchases such as office supplies and conference registration fees.
Audits of the corporate credit-card program and the expense-reimbursement programs are conducted annually by LCMS internal auditors. Their October 2015 report states, “We believe the LCMS corporate
credit card program is operating more efficiently and effectively than
in previous years. … For that, we commend the Accounting Department personnel responsible for developing and monitoring the corporate
credit-card policies and related processes.”
Online Amicus Briefs Directory: As the nation continues to see the
legal and religious dialogues intersecting in state and federal courts, the
LCMS is increasingly being sought out to provide its perspective on
these issues. The LCMS joins certain amicus briefs for cases in which
the outcome is likely to affect the church. Filing amicus briefs serves
several purposes, such as providing helpful information to the court regarding a certain case; alerting the court to the ways in which the case
may affect people outside of the parties involved; and raising media and
citizen awareness of important issues. We believe it is important that

2016 Convention Workbook