LCMS Convention Workbook St. Louis, Missouri — 1998, Page 99

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SYNODICAL REPORTS 99

* Clarification of provisions relating to indemnification of direc-
tors and officers, especially as these relate to Districts.

Establishment of an information center using the latest technol-
ogy to allow for inquiry through the Internet and providing in-
formation through it.

Approval of personnel policy changes, including modification of
the policy for appointing and employing staff in addition to
salary ranges and the positions included in each classification.

Proposed realignment of the responsibilities of the Chief Ad-
ministrative Officer and Chief Financial Officer.

Review of the Articles of Incorporation and Bylaws of Lutheran
Church Extension Fund, The Lutheran Church—Missouri Synod
Foundation, and Concordia University System, as well as amend-
ments to the CUS, Foundation, and LCEF Bylaws.

* Received in-depth reports at meetings from the Board for Mis-
sion Services, Board for Black Ministry, Board for Communica-
tion Services, Board for Human Care, Commission on Worship,
and Board for Higher Education and its development of CUENet,
an interactive video approach, now available for use by units
other than higher education, with units on campuses, high
schools, and other locations throughout the Synod.

¢ Authorized an additional staff position in the area of Worship
and urged that a member of a minority group be considered for
filling it.
Monitored the recommendations and reports of the President’s
Blue Ribbon committee on Structure, providing input to the com-
mittee by means of written communication and in a joint meeting
with the committee. The Board agrees with nearly all of the com-
mittee recommendations and expresses the hope that the report
will be adopted. It will, however, be submitting some overtures
dealing with certain areas of concern which it is asking the floor
committee to address. These are contained in another section of
the Convention Workbook.

III. Fiscal Matters

The Bylaws clearly identify the Board of Directors as the group
responsible for fiscal matters affecting the Synod. As a part of car-
rying out that responsibility, the Board received regular reports
from the Director of Internal Audit and appointed the firm of Emst
and Young as external auditors, recommending that they also be
engaged by the other corporate entities associated with the corpo-
rate Synod. The Audit Committee of the Board also reviewed audit
reports of the various Synodwide corporations and trust entities, as
well as those for colleges, universities, seminaries, and Districts.
The Board, through its Audit Committee, is assured that policies
of the Financial Accounting Standards Board are followed. Partic-
ular concern was taken to assure that FAS 116 and 117 were fol-
lowed. This resulted in a changed format for the Synod’s financial
statements to conform to the new policies.

In its financial reporting, the Board provides detailed reports of

the assets, liabilities, revenues, and expenses over which it has con- .

trol. It also, in its reports, includes a financial report in summary
form of the activities of the corporate and trust entities of the
Synod, including Concordia Publishing House, Lutheran Church
Extension Fund, The Lutheran Church—Missouri Synod Founda-
tion, Concordia Historical Institute, Concordia University System,
and Worker Benefit Plans. Attention is given to the funds provided
by various foundations which flow to units such as missions and
higher education through the corporate Synod.

The Board has approved the application of certain undesignated
funds from LCEF, net assets from operating income that nets an-
nually above $1,500,000, net assets from annual bequests above
$800,000, and net interest income to the capital indebtedness for
which the Synod is responsible at higher education institutions.

In the course of its work the Board approved balanced budgets
on an annual basis, as well as budgets for the Great Commission
Convocation and the 1998 synodical convention. Recently it re-
sumed responsibility for the LCMS ministries unit in the area of
development, a responsibility which had previously been desig-
nated as that of the LCMS Foundation.

IV. Legal Matters

A number of legal matters require official action of the Board of
Directors. One of these is the registration of foreign corporations
where the Synod is involved in mission work. Such corporations
were registered in Jamaica, Moscow, and Kazakstan. In addition,
the establishment of corporations was approved, relating to efforts
to establish a school in Shanghai similar to the Synod’s Hong Kong
International School for expatriates. Approval was also given to
participate in the establishment of a corporation known as Lutheran
Services in America, a corporation involving social ministry orga-
nizations which are Recognized Service Organizations. The corpo-
ration was established in cooperation with representatives of 280
social ministry organizations and the ELCA, which also has similar
social ministry organizations to which it relates.

During the past triennium the Board has closely followed two
lawsuits which were filed against the Synod or organizations re-
lated to it. These involved the NAACP/FCC vs. KFUO, in which
efforts were made to have the station license revoked on the basis
of discrimination and a class action suit brought in the state of
Texas against charitable organizations, alleging improper estab-
lishment of interest rates on the basis of recommendation by an or-
ganization suggesting rates which would be appropriate for pay-
ment on funds held in trust, with the remainder at the death of the
donor being a gift to a charitable organization. Issues relating to
both of these matters are nearing final resolution favorable to the
radio station and the Foundation.

V. Facilities and Property Matters

As a result of growth in the areas of Missions, LCEF, the Foun-
dation, and Accounting, a space needs study was initiated early in
the triennium. As a result of that study, it was determined that ad-
ditional space was needed either through the construction of addi-
tions to the International Center at 1333 South Kirkwood or
through the rental or purchase of other facilities. A decision was
made to purchase facilities and as a result, a building near the In-
ternational Center (IC) was purchased by LCEF and the Founda-
tion, with corporate Synod purchasing the quarter interest in the IC
owned by LCEF. The transaction was endorsed by the Board of Di-
rectors. The Board also approved a “Joint Building and Ownership
Operations” agreement providing for common management and
general services for both buildings.

At its meetings, the Board received regular reports from the
Chief Financial Officer regarding the sale of excess property at
Concordia University, Irvine. The sale, which has produced re-
ceipts to date in excess of $27 million, has now been completed.
with the result that synodical indebtedness in the construction of
the campus has largely been eliminated and start-up costs have
been liquidated. The blessing hand of the Lord in this entire effort
has been most evident.

Other actions of the Board relating to property and facilities in-
clude the following:
¢ Development of properties in Hong Kong on a Crown lease be-

longing to the Synod.

* The delegation of Board of Directors’ responsibilities for college
and university properties to Concordia University System, as
well as transfer of education assets and liabilities to it while re-
taining oversight responsibilities.

* Concurrence with the decision to allow St. Paul’s Lutheran High
School, Concordia MO, to become a Recognized Service Orga-
nization.

* Agreement to transfer a low-income housing fund to LCEF,
which has provided loan funds for such housing.

VI. Policies

The Board of Directors devoted considerable time to the matter
of developing policies or relating to others who would develop
policies or policy proposals affecting the Synod. One of the major
achievements was the completion and adoption of a policy manual
which reflects a policy-based leadership style. The adoption of this
type of leadership has made it possible to free up Board time for
“big picture” items addressing the future. .