FINANCIAL REPORT

Transcription

1 FINANCIAL REPORT LaWAYNE ROGNESS 56 The following financial reports cover the most recent fiscal year, May 1, 2017 April 30, 2018, for all CLB funds, in a summarized form. In reviewing these reports, it is important that you understand the difference between what is labeled as the Operating Ministry Fund Group versus the Capitalization Fund Group. These labels are intended to help you distinguish between the two different financial objectives that are reflected in the various funds that make up the Church of the Lutheran Brethren s financial base. Let me briefly explain the difference. Operating Ministry Fund Group is the day-to-day operations of our ministry. This is where offerings and contributions are deposited and expenses of our missions are paid. This is the part of the CLBA that makes up the mission of the Church. On the other hand, Capitalization Fund Group is the area of our financial bookkeeping where we report all of our investments such as church loans, congregational church deposits, endowments and all of the CLBA building and property assets. This area of our financial picture is pretty much driven outside of general gifts and contributions and relies heavily on financial economics. We present most of the enclosed financial reports in alignment with those two groupings of funds, Operating Funds and Capital Funds. Please pay attention to the titles of the various financial reports so that you have a good understanding about which group of funds is represented on a given report. Also, on pages 60-61, we present consolidated (overall combined) financial reports for the Church of the Lutheran Brethren so that you have a sense of what our overall financial picture is when the two groupings are merged together. That consolidated picture is the view that an outside investor (i.e., bank, etc.) or regulatory agency would most likely be interested to focus on. But for our CLBA internal management purposes, the distinction between the two fund groups is of great importance, but our day-today focus is much more intent on the Operating Ministries. I am sorry to report that this year our financial information contained herein is not being reported in the audited form. The FY audit has not been completed, and at this writing, we are scheduled to have the field work of the audit the week of May 21st. Our June BC18 convention is just too soon after ending our fiscal year. Upon the completion of the audit, the Financial Reports will be approved by the Finance Committee and then presented to the full COD for approval at our October 2018 meeting. I am pleased to report that through the fine work of Jerry Swendsrud and Larry Bethel in the finance office, we are continuing our relationship with our auditing firm (Fiebiger, Swanson, West & Co.). We have engaged this firm for many years running. Incidentally, copies of the audited financial reports will be available from the CLB Finance Office upon request for both the Seminary and the CLBA. As a closing note, the information presented on pages is included to allow us to report to you the giving trends for each of our ministries on a fiscal year basis and then also combines trends for the same reported years. Each year on a calendar basis we report to each church the giving to the ministries of the CLB. OPERATIONS RECAP This past year was a very challenging year, even though we saw a steady increase in contributions vs. our anticipated budget all the way from May through September. In October, the contributions started falling off and we saw a steady decline for the balance of the year. The outcome when the year was finished was a deficit in our contribution goals of around $367,000. However, we were blessed! We did end the year with approximately a $222,000 deficit. That was accomplished in different ways: enforcing a spending freeze on non-essential spending, a better than normal return on our endowments and receiving a number of small estate gifts to help with the shortages in our contribution goals. Normally these estate gifts would have most likely been deferred to special ministries but because of the mounting shortages and cash flow

2 needs, we needed that income to keep the ministries going forward. With the extra funding from estates, endowment earnings and underspending, we were still able to end our year with a positive fund balance although a very small one of approximately $50,000. We began the FY with a combined ministries fund balance of $272,557, and with the $222,557 loss in fund balances for the fiscal year, we were still able to end the fiscal year with a $50,332 positive fund balance. CAPITAL ACCOUNTS RECAP In our Capitalization Funds Accounts, we really only budget and monitor the Trust Fund Account and our Pension & Benefit Accounts. There again, we were met with challenges throughout the year, ending with a minimal loss for the year. The major problems: (1) the financial markets were flat for the last four months of the fiscal year. We have a sizable portion of our dollars in the financial markets due to the fact that our reserves were quite high. Church deposits were at an all-time high and our church loans are at a very low balance. During the course of the year, we saw a reverse in both of these areas. Economics dictate much of what happens in these accounts and our return on our investments and our policy is to invest in conservative funds, ones that agree as much as possible with our Statement of Faith. Those do not always have the highest rate of returns. We keep saying that we are in it for the long haul but we must remember that we calculate and report our gains and losses on a monthly basis. (2) As just mentioned, our church loans were at a very low balance. That scenario has changed since I have purposely been quite aggressive in our church loan program. I am of the idea that loaning dollars to our churches, not only to enhance our ministries but also to secure the 5-5.5% return that is a fixed amount rather than a volatile rate that goes from a -5% to a +10%. Of the $8.7M in our endowment account, we now have loaned out to churches about $7.8M, thus leaving.80m without a home. Throw into that mix about $1.6M in church and regional deposits along with cash reserves in deferred revenues, and we sit with about $3.0M looking for a return of 6.0%. Here again, we are trusting the Lord to move in ways we do not even know. So as you in your congregations contemplate your building needs and are in need of funding, I would love to have a conversation with you. Remember, all interest paid on any loan with the Church of the Lutheran Brethren Trust Fund is supporting the ministries of the CLB. In our Pension and Benefits Account, things went well. Minor changes were needed, but we did end the year on a positive note. Thanks for allowing me to be part of the Church of the Lutheran Brethren family. It is indeed an honor to serve the Lord in this way with fine people such as you of the CLB and the other fine people of the Mission Team and the Council of Directors. For any who would like to see/know more information, please don t hesitate to contact me at lrogness@clba.org or call (218) LaWayne Rogness serves the Church of the Lutheran Brethren as Director of Finance and Personnel. 57

3 Church of the Lutheran Brethren of America Fiscal Year-to-Date Contributions Report for the 12 months: May 1 - April 30, 2018 FUND Fiscal Year FY FY FY FY Total Actual % of Actual % of Actual % of Actual % of Actual % of Contribution Received Goal Received Goal Received Goal Received Goal Received Goal Goal: 5/1-4/30 Thru 4/20 Received Thru 3/31 Received Thru 4/30 Received thru 4/30 Received Thru 4/30 Received Communications Ministry $10,245 $11, % $10, % $11, % $12,080 34% $15, % (CLB Publications) General Ministries $1,142,041 $1,032,746 90% $1,030,706 90% $1,009, % $1,009, % 1,029,177 90% Lutheran Brethren Seminary $405,753 $318,179 78% $322,992 80% $349,044 86% $385,964 74% 376,998 93% North American Mission $332,264 $132,245 40% $131,150 39% $153,703 61% 211,276 74% 193,511 58% International Mission $1,109,697 $1,138, % $985,175 89% $888,285 85% $1,029,577 96% 951,311 86% LOE Advancement $0.00 $0 0% 73,622 #DIV/0! $67,297 43% 1, % 1, % TOTALS - Budget Goal $3,000,000 2,632,860 88% 2,554,597 85% 2,479,360 86% 2,649,511 98% $2,568,244 86% Balance Needs 367,140 Prior fiscal year Final Total Received $2,479,360 $2,649,511 $2,532,339 Prior fiscal year Final Total Received $2,554,597 $2,479,360 $2,649,511 $2,532,339 Annual Budgets $2,703,507 $2,869,913 $2,685,000 $2,525,000 Over/(Short) (148,910) (390,553) (35,489) 7,339 58

4 CHURCH OF THE LUTHERAN BRETHREN OF AMERICA Fiscal Year Month-by-Month Contributions as of April 30, 2018 $700,000 $650,000 $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 ($50,000) ($100,000) ($150,000) ($200,000) ($250,000) ($300,000) ($350,000) ($400,000) May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr FY Actual Contributions FY Actual Contributions FY Anticipated Contributions Accumulated Difference - Anticipated vs. Actual 59

5 CHURCH OF THE LUTHERAN BRETHREN OF AMERICA Consolidated Statement of Revenues, Expenses, and Fund Balances For the Fiscal Years Ended April 30, 2018 and 2017 (UNAUDITED) OPERATING FUND GROUP CAPITALIZATION FUND GROUP TOTAL ALL FUNDS Year Ended Year Ended % Year Ended Year Ended % Year Ended Year Ended REVENUES: Contributions and Capital Gifts $ 2,632,610 $ 2,554, % $ 79,217 $ 107, % $ 2,711,827 $ 2,661, % Non-Recurring Special Gifts / Gifts to Endowments 219, , % 127,643 10, % 346, , % Grants and Other Income 65, , % 54,750 62, % 119, , % Interest and Investment Income 2,140 2, % 587, , % 589, , % Lutheran Brethren Seminary Operations 238, , % % 238, , % Faith & Fellowship Press Operations 92,243 87, % % 92,243 87, % Youth Ministries Special Events Operations 203, % % 203, % Benefit Fund Operations % 613, , % 613, , % Pension Fund Operations % 804, , % 804, , % Total Revenues 3,453,020 3,234, % 2,267,574 2,199, % 5,720,594 5,434, % EXPENSES: Program and Mission (Including Cost of Goods Sold) 2,907,450 2,513, % 1,754,633 1,577, % 4,662,083 4,091, % Administrative Salaries and Benefits 692, , % 115,158 93, % 807, , % Publicity and Communication 119, , % 6,402 9, % 125, , % Travel and Meetings 40,313 62, % 4,445 4, % 44,758 66, % Utilities, Repairs and Maintenance 44,731 26, % 28,207 22, % 72,938 49, % Office and Administrative Expenses 97, , % 42,655 47, % 139, , % Interest on Borrowed Funds % % % Property, Liability and Worker's Comp. Insurance 39,418 37, % 5,028 4, % 44,446 42, % Non-Cash Expenses (Depreciation and Bad Debt) 4,601 (10,349) % 119, , % 124, , % Total Expenses 3,945,738 3,494, % 2,076,146 1,887, % 6,021,884 5,382, % Excess (Deficiency) of Revenue over Expenses (492,718) (260,121) 89.4% 191, , % (301,290) 51, % INTERFUND TRANSFERS: Transfers to Property and Equipment Fund % % % Transfers of Trust Fund Endowment Earnings 270, , % (270,161) (207,757) 30.0% % Other Interfund Transfers % % % Total Transfers 270, , % (270,161) (207,757) 30.0% % Overall Fiscal Year Surplus (Deficit) (222,557) (52,364) 325.0% (78,733) 103, % (301,290) 51, % BEGINNING FUND BALANCE - May 1, 2017 and , ,253-16% 12,894,302 12,790, % 13,167,191 13,115, % ENDING FUND BALANCE - April 30, 2018 and 2017 $ 50,332 $ 272,889-82% $ 12,815,569 $ 12,894, % $ 12,865,901 $ 13,167, % % OPERATING FUND GROUP: Communications Ministry, General Ministries, North American Mission, Lutheran Brethren Seminary and International Mission. CAPITALIZATION FUND GROUP: Trust Fund, Property and Equipment Fund, Pension and Benefit Fund, NAM Capital Projects Fund, IM Capital Projects Fund, LBS Student Aid Fund, and LBS Capital Projects Fund. 60

6 CHURCH OF THE LUTHERAN BRETHREN OF AMERICA Consolidated Balance Sheets as of April 30, 2018 and 2017 (UNAUDITED) ASSETS: (What We Own) OPERATING FUND GROUP CAPITALIZATION FUND GROUP TOTAL ALL FUNDS as of as of % as of as of % as of as of Cash and Cash Equivalents $ 73,301 $ 130, % $ 498,873 $ 109, % $ 572,174 $ 240, % Investments % 5,123,732 5,507, % 5,123,732 5,507, % Accounts Receivable 24,040 (3,090) % 55,501 97, % 79,541 94, % Inventory and Prepaid Expenses 44,479 56, % 13,817 40, % 58,296 97, % Notes Receivable % 7,919,912 7,331, % 7,919,912 7,331, % Property Held for Resale % 697, , % 697, , % Deferred Gifts Receivable % - 22, % - 22, % Land, Buildings and Equipment 32,027 43, % 2,301,453 2,404, % 2,333,480 2,447, % Other Assets 222, , % % 222, , % TOTAL ASSETS $ 396,774 $ 433, % $ 16,610,962 $ 16,258, % $ 17,007,736 $ 16,692, % LIABILITIES: (What We Owe) Accounts Payable and Accrued Expenses $ 57,565 $ 38, % $ 297,341 $ 358, % $ 354,906 $ 397, % Short-term Loans Payable % % % Deposits Payable to Others (1,231,529) (319,652) 285.3% 3,274,476 2,869, % 2,042,947 2,550, % Deferred Gift Agreements % 223, , % 223, , % Deferred Revenue 1,520, , % % 1,520, , % TOTAL LIABILITIES 346, , % 3,795,393 3,364, % 4,141,835 3,525, % FUND BALANCE: (Our Net Worth) Endowments & Endowments in Process % 8,671,597 8,543, % 8,671,597 8,543, % Restricted/Designated Fund Balances % 2,160,424 2,349, % 2,160,424 2,349, % Unrestricted Fund Balances: Property and Equipment % 2,745,441 2,804, % 2,745,441 2,804, % Other Fund Balances 50, ,889-82% (761,893) (803,114) -5.1% (711,561) (530,225) 34.2% TOTAL FUND BALANCES 50, ,889-82% 12,815,569 12,894, % 12,865,901 13,167, % TOTAL LIABILITIES AND FUND BALANCES $ 396,774 $ 433, % $ 16,610,962 $ 16,258, % $ 17,007,736 $ 16,692, % % * Interfund borrowings have been eliminated during combination OPERATING FUND GROUP: Communications Ministry, General Ministries, North American Mission, Lutheran Brethren Seminary and International Mission. CAPITALIZATION FUND GROUP: Trust Fund, Property and Equipment Fund, Pension and Benefit Fund, LBS Student Aid Fund, NAM Capital Projects Fund, IM Capital Projects Fund, and LBS Capital Projects Fund. 61

7 CHURCH OF THE LUTHERAN BRETHREN OF AMERICA CONSOLIDATED REVENUES Fiscal Year Ended April 30, 2018 CONSOLIDATED EXPENSES Fiscal Year Ended April 30, 2018 Contributions and Capital Gifts 47.4% Non-Recurring Special Gifts / Gifts to Endowments 6.1% Program and Mission 77.4% Grants and Other Income 2.1% Pension Fund 14.1% Benfit Fund 10.7% Youth Ministries Special Events 3.6% Faith & Fellowship Press 1.6% Interest and Investment Income 10.3% Lutheran Brethren Seminary 4.2% Non-Cash Expenses (Depreciation and Bad Debt) 2.1% Insurance 0.7% Interest 0.0% Office and Administrative Expenses 2.3% Utilities, Repairs and Maintenance 1.2% Administrative Salaries and Benefits 13.4% Publicity and Communication 2.1% Travel and Meetings 0.7% 62

8 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB AC AD AE Communications Ministry General Ministries LB Seminary North American Mission International Mission Overall Totals Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Needed Support and Revenue: Contribution Support % 10,000 11, % 910,000 1,031, % 367, , % 262, , % 950, , % 2,500,000 2,417, % (82,323) LOE (Advancement) Support % 232, % 38,253 1, % 69,764 8, % 159, , % 500, , % (285,069) Operations Income % 101,250 92, % % 275, , % 193, , % - 0.0% 569, , % (32,587) Other Revenue (Endow.- Dif.Rev.& Transfers) % 1,373 1, % 291, , % 32,623 49, % 42,808 44, % 128, , % 496, , % 54,577 Total Support & Revenue % 112, , % 1,433,899 1,365, % 713, , % 568, , % 1,237,894 1,260, % 4,066,441 3,721, % (345,401) Expenses and Transfers: Program Expenses % 135, , % 152, , % 688, , % 734, , % 981, , % 2,693,408 2,692, % 1,103 LOE (Advancement) Expense 209, , % 29, % 63,333 63, % 136, , % 439, , % 32,644 Gen & Admin Expenses % 63,685 62, % 470, , % 125, , % 44,016 42, % 225, , % 929, , % 84,095 Subtotal Expenses % 199, , % 832, , % 843, , % 842, , % 1,343,423 1,306, % 4,061,441 3,943, % 117,842 Transfers Out (In): (140,641) 65,539 16,314 42,755 16, Capital Purchases % 5, % - 0.0% % % % 5, % Allotment from Synod/GM % (105,808) (105,808) 100.0% 831, , % (190,032) (190,032) 100.0% (334,231) (334,231) 100.0% (201,194) (201,194) 100.0% - (2) 0.0% Finance/Overhead Charge % 14,537 14, % (230,195) (230,195) 100.0% 60,011 60, % 59,982 59, % 95,665 95, % % Total Expenses & Transfers - (140,641) 0.0% 112, , % 1,433,899 1,415, % 713, , % 568, , % 1,237,894 1,216, % 4,066,441 3,943, % Net Income (Loss) ,341 - (50,201) - (115,463) - (242,438) - 43,561 - (222,557) Prior Month's Y-T-D Net Income (Loss) - (6,377) (345,374) (181,271) (277,303) (49,625) Prior Y-T-D Monthly Net Income (Loss) - 5,237 14,897 8, Prior Year Ending Net Income (Loss) (137,008) 5,236 14,897 8, ,203 Tuition & Finance Charges Youth Convention - - Book Store & F&F Sales Instructional & Library Expenses RP's@74.5% - YC17@ 25.5% Overall Net Income (Loss) 2/28/2018 (222,557) Includes Audit Fees ($23,510) Advancement: LBDI Epiphany Church Plant Advancement: Asche/Narveson's Prior Month Y-T-D Net Income (Loss) (859,950) Prior Y-T-D Monthly Net Income (Loss) (490,819) Grant Income & Estate Income - Beginning Fund Balance, 5/1/17 $ (140,641) $ 5,237 $ 25,951 $ 124,140 $ 258,202 - $ 272,889 Current Net Income (Loss) (Fund Bal.) $ 140,641 $ 1,341 $ (50,201) $ (115,463) $ (242,438) $ 43,561 (222,559.15) $ (222,557) Final Ending Fund Balance, 3/31/18 $ 6,578 $ (24,250) $ 8,677 $ (242,438) $ 301,763 50, $ 50,332 Notes: LOE Advancement Church of the Lutheran Brethren Operating Ministries Financial Performance At-a-Glance as of April 30, 2018 (12 months %) 63

9 in Endowments B/S Church of the Lutheran Brethren Capitalization Fund Group Financial Performance At-a-Glance as of April 30, 2018 (Twelve %) Investment/Dividend/Gains Income NAM/Sem/IM Seminary Trust Fund Property & Equip Fund Capital Projects Fund Student Aid Fund Pension & Benefit Fund Overall Totals Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Annual 4/30/2018 % of Ann Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Budget Y-T-D Actual Budget Support and Revenue: Contribution Support - 130, % - 9, % % - 78, % % - 218, % Investment Inc/Gain/(Loss) 630, , % % - 21, % % 2,000 12, % 632, , % Operations Income % - 52, % % % 1,190,000 1,418, % 1,190,000 1,470, % Other Revenue % % % - 46, % % - 46, % - Total Support & Revenue 630, , % - 62, % - 21, % - 125, % 1,192,000 1,430, % 1,822,000 2,316, % Expenses and Transfers: Program Expenses 114,000 76, % % - 179, % - 123, % 1,169,500 1,375, % 1,283,500 1,754, % Gen & Admin Expenses 121, , % - 121, % - 14, % - 3, % 66,370 70, % 188, , % Subtotal Expenses 235, , % - 121, % - 193, % - 127, % 1,235,870 1,445, % 1,471,525 2,079, % Transfers Out (In): Capital Purchases % % % % % % Other Transfers Out - 3, % % - 3, % % % - 6, % Endowment Earnings Paid 425, , % % % % (22,500) - 0.0% 402, , % Total Expenses & Transfers 660, , % - 121, % - 196, % - 127, % 1,213,370 1,445, % 1,874,025 2,395, % Net Income (Loss) (30,655) 171,865 - (58,700) - (174,804) - (2,367) (21,370) (14,729) (52,025) (78,735) 151.3% Beginning Fund Balance, 5/1/17 7,754,434 2,804,140 1,842, , ,973 12,894,301 Current Fund Balance, 04/30/2018 7,926,299 2,745,440 1,668, , ,244 12,815,566 Composition of Current Fund Balance: Unrestricted/Designated (985,468) - 1,668, , ,915 Restricted Life Income Agreements 223, ,576 Restricted/Designated Earnings 16, , ,039 Endowments & Endowments-in-Process 8,671, ,671,597 Property & Equip assets, at net book value - 2,745, ,745,440 7,926,300 2,745,440 1,668, , ,244 12,815,567 Endowments Operating: $180,134 Endowments Restricted: $44,276 Endowment Reserves: $85,975 Rents-Churches/Home Scholarship Gifts Pen/Ben Income Pen/Ben Pay-outs Scholarships Awarded 64

10 Church of the Lutheran Brethren of America Operating Ministries Fund Balance for the 20 Year Period Ended April 30, 2018 $500,000 $400,000 $300,000 $200,000 $100,000 $0 ($100,000) ($200,000) ($300,000) ($400,000) ($500,000) ($600,000) ($700,000) ($800,000) ($900,000)

11 Church of the Lutheran Brethren of America Capitalization Ministries Fund Balance for the 20 Year Period Ended April 30, 2018 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $