Update from Finance & Planning

September financial trends
continue steady

By Ronald Kelly

News from the financial office continued to be cautiously good in September. Member donations for the month topped the $1.5 million mark. That is almost spot on with the same month last year.

In addition we had an estate donation in September bringing the total monthly income to just over $2 million. These figures exceed our projected budget for the month, so obviously this is reason to be joyful. A hearty thank-you from all of us at denominational headquarters for your continued encouragement and support.

Available cash funds for the year to date have passed $19.1 million. That’s about $14.4 million in member donations and almost $4.4 million from all other sources. For the first nine months of this year we are running just one percent under the comparable nine months of last year. While that’s still a negative figure, at least it’s the smallest negative number we can register!

As you see from the chart, expenses continue to exceed income by about $3.9 million. This is within guidelines established by our headquarters management staff and the church board of directors. So we maintain our reserve funds at the best possible level under the circumstances.

From time to time members inquire about the reserve fund. Let me use this opportunity to explain a little bit about reserves. To maintain financial health, an organization of our size and scope should always have adequate reserves. We retain the services of PricewaterhouseCoopers, a major public accounting firm, to review our finances, issue annual reports and advise us on matters pertaining to accounting, bookkeeping and other matters related to corporate fiscal matters.

We also have to issue audited annual financial statements to various government agencies and to businesses with which we interact. We also maintain a rating with Dunn and Bradstreet that allows businesses to obtain appropriate information on church finances.

PricewaterhouseCoopers advises us to maintain a reserve level of up to six months operating capital, with a goal of having reserves as near the one-year operating level as possible. Obviously from a financial point of view we would prefer to have at least that one-year amount in the reserve fund. And when we have sold selected assets, such as the Big Sandy campus, we were near that level.

This year, as noted above, we have had expenses about $3.9 million more than income. That, of course, has dropped the reserve fund. But reserves are still in adequate shape, that is, above the six-month level. This is a financial matter that we monitor on an almost daily basis. And it is certainly our intent to maintain the reserves at as high a level as we can while we operate the affairs of the church at the best level of expenses to accomplish the mission and goals of the denomination.

As we proceed into the final months of this year, we sincerely thank you for your dedicated response to the needs of our church. Many, hopefully most, of our congregations are more and more becoming places of excitement to share the joy of God’s grace with others.

Each of us has gifts from God. Our job is to discover those gifts, and with God’s guidance, use them for the greater glory of his kingdom. So keep up the good work as you serve your congregation and community.

Statement of Operating Income and Expenses for
WCG for the Month Ended Sept. 30, 2002

                                                            For the Month             For the Year-to-Date

Income

    Mail Income                                         $ 1,535,000                         $ 14,464,000

    Other income                                             548,000                              1,861,000

        Subtotal                                              2,083,000                            16,325,000

    Gain on sale of SEP Orr                                    $ 0                            $ 1,336,000

    Income from Legacy

    deposit forfeiture                                                   0                             1,439,000

        Subtotal                                                             0                             2,775,000

        Total income                                         2,083,000                            19,100,000

Expenses                                                       2,649,000                           22,999,000

Net gain (loss) to bank reserves                    $ (566,000)                        $ (3,899,000)

Copyright © Worldwide Church of God, 2002