LCMS Convention Workbook St. Louis, Missouri — 2001, Page 57

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SYNODICAL REPORTS 57

Audit Committee. Administratively, the Internal Audit Department
reports to the synodical Vice-President-Finance—Treasurer.

Annually, the Audit Committce 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 semiannual 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.

At each of these meetings, the Committee had the opportunity
to meet privately with the auditors without the presence of man-
agement to discuss issues of mutual concern.

The activities of the Internal Audit Department during the tri-
ennium are summarized below:

1. Districts of the Synod. Upon request of District boards, the
Department conducted financial audits of 16 Districts during each
of the fiscal years 1998-99, 1999-2000, and 2000-2001. In each
of these years, the Department also reviewed the financial audit re-
ports of the remaining !9 Districts that were audited by indepen-
dent auditors.

Annually, the Department prepared sample District audited fi-
nancial statements to help ensurc a standardized reporting format in
conformity with current generally accepted accounting principles
for not-for-profit organizations. To promote uniformity in District
financial reporting. both internal auditors and a majority of the Dis-
trict independent auditors utilized this sample report.

To enable District and church extension fund boards and man-
agement to evaluate the feasibility of joining the Lutheran Church
Extension Fund, a pre-entry review of church extension operations
was performed in one District during the last three fiscal years.

During the past fiscal year, the Department assisted District rep-
resentatives in preparing an updated accounting manual for use by
all synodical Districts.

2. Seminaries, Colleges, and Universities. |n prior years, the
Department and independent auditors developed a joint audit ap-
proach whereby the annual financial and federal fund audits are
performed at each of the 12 educational institutions by a combina-
tion of internal and independent auditors. During this triennium,
this audit approach was once again used at each institution on an
annual basis. In addition, where required, audits of state-funded
student financial assistance programs and foundations of various
educational institutions were also performed jointly by internal
audit and the independent auditors. The joint audit approach sig-
nificantly reduced external audit fees, standardized reporting re-
quirements, maximized audit efficiencies, and improved the time-
finess of reporting.

The Department assisted the Board for Higher Education/
Concordia University System in updating, revising, and calculat-
ing the ratios used to evaluate the financial! strength of its 12 edu-
cational institutions.

3. The Synod, Its Departments, and Other Entities. Annu-
ally, the Internal Audit Department performed a financial audit of
Concordia Historical Institute and the Office of Information Sys-
tems.

On an annual basis, the Department performed and reported on
three operational reviews of two Concordia Health Plan managed-

care providers selected by the Worker Benefit Plans (WBP) Board,
as well as claims that were processed internally by WBP personnel.

At the request of various departments and agencies of the
Synod. special operational reviews were performed of selected
functions, programs, and activities.

During each of the triennium years, the Department assisted
the independent auditors in conducting their audits of the finan-
cial statements of The Lutheran Church—Missouri Synod, the
Lutheran Church Extension Fund, The Lutheran Church—
Missouri Synod Foundation, Worker Benefit Plans, and Concordia
University System.

Joann P. Spotanski, Executive Director

RS-01

Board for Higher Education
Concordia University System

... All Across the Country ...

An Educational Mission
of The Lutheran Church—Missouri Synod

http://higher-ed.Icms.org
Preface

Under God’s grace and blessings the BHE/CUS Board is pleased
to share this report of ongoing activity and achievement in the edu-
cational mission of the LCMS and expresses its sincere apprecia-
tion to the members of the Synod for their prayers and support.

The Lutheran Church—Missouri Synod Board for Higher
Education Statement of Mission and Purpose (as established
by the 1986 synodical convention):

The colleges, universities, and seminaries of The Lutheran
Church—Missouri Synod exis! 1o supply the higher education services
needed 1o accomplish the mission of the church.

Strongly committed lo the Lutheran concept of vocalion, synodical
colleges and universilies are liberal aris institutions which provide a
Christ-centered spiritual and value-oriented environment for men and
women who will be Christians at work in the church and in secular oc-
cupations.

The objectives of the Synod include the recruilment and education
of professional church workers. Therefore, central 1o the system of syn-
odical educalion is the preparation of those who are called to serve
through preaching, teaching, and related vocations. Professional prepa-
ralion for the pastoral ministry is the special assignment of the Synod's
seminaries.

Facts about Higher Education in the LCMS

¢ Over 15,000 students
* Over 1,000 full- and part-time faculty
* Over 100 majors and programs

Degrees Awarded

* Associate’s Degrees

* Bachelor’s Degrees

* Post-Baccalaureate Certificates

2001 Convention Workbook