LCMS Convention Workbook St. Louis, Missouri — 2001, Page 78

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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