Finance Report
for the Month and Year-to-Date Period Ended July 31, 2011
The financial statement for the first seven months of 2011 is available here. There are several items of note.
- Key revenue items are behind budget:
a. Pledge revenue (line 1) for this year-to-date period is $30,151 behind budgeted receipts which are based on prior years. This shortfall has increased by $10,390 as compared with the shortfall through the end of June. We will continue to monitor collections through the summer.
b. Alleluia Fund (line 10) – While funds received through July are still below budget, a substantial contribution has enabled the fund to be as close to budget as it is. We will continue to promote this endeavor during the latter months of the year in a way that will not conflict with annual congregational stewardship programs. However, we anticipate a shortfall from the $110,000 budgeted for 2011.
c. Rental Income (line 13) – We have retained a new real estate firm to assist in finding organizations to rent a portion of Episcopal House, and the firm has been successful in its efforts to rent a portion of one floor, effective October 1st. Due to the amount of time it takes to find tenants and for them to move in, however, we expect that the amount of rental revenue that we will receive in 2011 will be substantially lower than the $50,000 budgeted for 2011.
- Expense items are mostly at or below budget:
a. Staff expense for the Finance Department (line 15) is below budget because the budget anticipated a full-time CFO for the full year, offset in part by expense related to the Interim CFO. The CFO position was filled in May. This expense will be somewhat under budget for the full year.
b. Congregational/Clergy/Ministry Development (line 18) is over budget by $3,363, due principally to expenses related to providing consulting and other support to congregations. It is expected that this cost center will be over budget by about $3,000 for the full year.
c. A refund of expenses for the Annual Diocesan Convention (line 22) was received in June. We also have a credit available from 2010 of $11,537 to reduce the net projected cost for 2011 to zero.
d. Christian Formation (line 23) routinely receives deposits/payments early in the year for events that occur later in the year. Income received early this year has exceeded expenses through July, and the budget for the full year appears to be on target.
e. Clergy Conference (line 26) – the favorable variance is the result of receiving income prior to having to pay expenses. As a timing difference, we expect for the full year to be close to budget.
f. The 2008 TEC pledge payment of $10,000 (line 35) is being paid in four quarterly installments; two payments were made through June 30.
g. Domestic (line 36) and International (line 37) Outreach – all spending for domestic outreach is budgeted for the October through December period, while spending for international outreach was budgeted to occur beginning in July.
h. Communications/The Voice (line 40) shows a favorable variance through the July YTD period; the variance is due principally to the timing of payments, and we expect the final annual expense amount to be somewhat below budget for the full year.
i. Insurance for Retired Clergy and Lay Employees (line 52) is under budget. It was discovered that one aspect of the 2009 change to post-retirement insurance benefits was never implemented – benefits for under-65 spouses of retired clergy and for surviving spouses (widows) of retired clergy have remained at the generous pre-2009 levels. We will notify the affected people that this change will be made beginning in 2012. However, available funding will cover the expected additional expense this year. Additionally, in June Council approved a change to alter benefits to retired lay employees of the Diocese so that they are in line with the change in benefits to retired clergy.
j. Administration & Finance expenses (line 53) reflect a favorable variance through July due to the timing of the payment of annual audit expenses. It is expected that this department will be on budget for the full year.
k. Information Technology spending (line 54) has a favorable variance through July, and it is expected to be slightly below budget for the full year.
l. Bishop’s Expenses (line 56) are over budget through July. This is a transition year with regards to recording expenses in the Council’s financial statement and we will be able, in the next several months, to have a better forecast of expenses attributable to Council.
3. Bottom line:
a. Pledge receipts in the early months of the year are expected to be insufficient to cover expenses, so we generally would anticipate a deficit for the first seven months of the year. The negative variance in Alleluia Fund income has exacerbated the overall income shortfall. However, the favorable variance in expenses has led to an overall bottom line that, through July, is favorable when compared with budget.
b. Since we anticipate lower than budgeted Alleluia Fund and Rental income, and since most of the expense variances are favorable due to timing matters, it may be difficult to achieve the balanced budget for the full year.
Additional items of note:
- At the end of 2010 we accrued $206,000 of pledge revenue due for prior years (principally 2010) that is expected to be received in 2011. Through July, we have collected $190,000 relating to this accrual. Some congregations have remitted higher than the amount originally pledged for 2010, and it is expected that we will eventually collect the amount that we accrued.
- As of this date, there are nine congregations that have not finalized and submitted their 2010 Parochial Reports. A letter has been sent to the clergy and wardens of each of these nine congregations indicating that the 2010 Parochial Reports are to be submitted as soon as possible.
Paul R. Shackford
Chief Financial Officer
August 15, 2011
