Adelaide United Methodist Church of Australia Treasurer’s Report as at 30 June 2021
Desmond Muzorewa AIAA, BSc
Last edited 01 February 2022
1 Executive Summary
1.1 Introduction
This report on the financial position of the United Methodist Church of South Australia (“Church”) as at 30 June 2020 has been prepared to meet the requirements of the Book of Discipline. This report should not be relied upon for any other purpose than the information of the Church Council and Finance Committee. The Treasurer’s person or office is not responsible for the consequences of any other use. This report should be considered in its entirety and not distributed in parts.
A summary of the financial position of the Church as at 30 June 2020 is shown in the table below. The financial position as at 30 June 2020 has been provided for comparison purposes.
financial_pst_summ_date <- select(financial_pst_summ,-2)
kable(head(financial_pst_summ_date,5),
col.names = c("Description", "Amount"),
align = "lr",
caption = "Table 1.1 Summary of financial position") %>%
kable_styling(bootstrap_options = "striped", full_width = FALSE, position = "left")| Description | Amount |
|---|---|
| Bank balance | 43372 |
| Reserved funds | -29898 |
| Available funds | 13474 |
| Amounts payable | -8580 |
| Adjusted available funds | 4894 |
1.2 Demographic data
Below is a summary of the Church’s membership split by membership category and three membership definitions as follows:
- Membership – these are the total number of members according to the Statistician’s records;
- Financially active – these are the number of members who contributed at least $1 over the year (a change in the contribution threshold may alter the data significantly); and
- Weekly attendees – these are the average number of members who attend weekly Sunday and other services.
membership_date <- select(membership,-2,-4,-5)
kable(head(membership_date,4),
col.names = c("Category", "Number"),
align = "lr",
caption = "Table 1.2 Membership") %>%
kable_styling(bootstrap_options = "striped", full_width = FALSE, position = "left")| Category | Number |
|---|---|
| Adults | 15 |
| Youth | 28 |
| Junior church | 5 |
| Total | 48 |
1.3 Purpose
I have prepared this report exclusively for the members of the Church Council and Finance Committee for the following purposes:
- To provide the results of the financial position of the Church as at 30 June 2020; Review the main items of experience over the financial year ended 30 June 2020 (“year”);
- Outline the operational processes that were adopted over the year; Recommend areas of improvement in respect of financial, operational and governance issues; and
- Satisfy the requirements of paragraph 258 of the Book of Discipline.
2 Operational Processes
2.1 Income
- Income is derived from various streams in the form of cash and electronic bank transfers.
- Cash received mostly in respect of Offerings, Tithes and other non-standard income steams is reconciled by the Recording Secretary and a summary of the income is published on the Finance Team’s Whatsapp group.
- Cash is deposited into the Church’s bank account mostly via a self-service ATM typically within 7 days of receipt.
- Receipts in respect of all monies received are drawn and distributed typically within 30 to 90 days of receipt.
2.2 Expenses
- The vast majority of expenses were met from the bank account, only in exceptional circumstances were cash expense transactions undertaken.
- In instances where contributions were made by members towards ad-hoc initiatives, the general principle was to pay the total contributed amount subject to a minimum of $250 towards the respective cause.
- Informal expense requests were made by respective committees, mostly via Whatsapp.
- There were no process documents or formal instructions that informed execution of payments. As a result, reliance was placed on various minutes of meetings held in the past. Where these minutes were silent on certain issues, precedence and best practice approaches were adopted.
- Currently, the signatories are not able to transact in real time from different locations as registration with the bank’s online portal that enables such transactions to take place is yet to be done. At the moment, transactions can only be processed using one gadget hence the need for the signatories to be at the same location when processing bank transactions. The signatories have therefore been adopting the following approach.
- For urgent third party payments, a member of the congregation made payment from their personal bank account(s) and the Finance Team reimbursed them upon production of relevant supporting documentation.
- Where payments were not urgent, the Finance Team convened at an agreed location and processed payments. Payments were mostly made on average 2 weeks after they fell due.
- No payment vouchers were being drawn in respect of payments made. However, all tax invoices were received and the respective transactions were recorded accordingly.
3 Key Results and Recommendations
3.1 Membership
Below is a summary of the Church’s membership split by membership category and three membership definitions as follows:
- Membership – these are the total number of members according to the Statistician’s records;
- Financially active – these are the number of members who contributed at least $1 over the year. (a change in the contribution threshold may alter the data significantly); and
- Weekly attendees – these are the average number of members who attend weekly Sunday services.
membership_date <- select(membership,-2,-4,-5)
kable(head(membership_date,4),
col.names = c("Category", "Number"),
align = "lr",
caption = "Table 1.2 Membership") %>%
kable_styling(bootstrap_options = "striped", full_width = FALSE, position = "left")| Category | Number |
|---|---|
| Adults | 15 |
| Youth | 28 |
| Junior church | 5 |
| Total | 48 |
Of the total number of Church members according to the Statistician’s records, 59% (same as last year) are financially active and 43% (same as last year) are frequent weekly Sunday service attendees. There is a positive correlation between members who are financially active and those who attend weekly Sunday services. Consequently, an increase in the number of members who attend weekly Sunday services will most likely result in an increase in financial activity hence higher income.
3.2 Financial Position
cashflow_stmt_date <- select(cashflow_stmt,-2)
kable(head(cashflow_stmt_date,22),
col.names = c("Description", "Amount"),
align = "lr",
caption = "Table 1.3 Financial position") %>%
kable_styling(bootstrap_options = "striped", full_width = FALSE, position = "left")| Description | Amount |
|---|---|
| Bank Balance | 43371.78 |
| Building fund [1] | -26348.40 |
| Cyclone Idai relief [2] | -400.00 |
| Contingency Reserve Fund [3] | -3000.00 |
| MUMC [4] | 0.00 |
| RRW [5] | 0.00 |
| UMYF [6] | 0.00 |
| UMYF advisors fund [7] | -150.00 |
| Visa application [8] | 0.00 |
| Reserved funds [A] | -29898.40 |
| Available funds [B] | 13473.38 |
| Audit fees* [9] | 0.00 |
| Harvest (area)** [10] | -981.00 |
| Harvest (building fund)*** [11] | -1308.00 |
| Petty Cash [12] | -500.00 |
| FY2021 church premises rent [13] | -3000.00 |
| Other [14] | 0.00 |
| SPPR**** [15] | -2791.00 |
| Amounts payable [C] | -8580.00 |
| Adjusted available funds excluding area assessments[D] | 4893.38 |
| FY2019 area assessments [16] | -23423.36 |
| Adjusted available funds including area assessments[E] | -18529.98 |
3.3 Cashflow Statement
Below is a table showing the income and expenditure over the year. Please refer to Appendix B for a comprehensive cash flow statement.
3.4 Financial Position Reconciliation
Below is a summary showing the bank balance movement over the 2019/2020 financial year. Figures for the 2018/2019 financial year are shown for comparison purposes.
financial_pst_recon_date<- data %>% filter(fy=="2021") %>%
group_by(transaction,type) %>%
summarise( Total = sum(Amount)) %>%
spread(type,Total)## `summarise()` has grouped output by 'transaction'. You can override using the `.groups` argument.financial_pst_recon_date_table <- financial_pst_recon_date %>% replace_na(list(Expense=0,Income=0))
kable(financial_pst_recon_date_table,
col.names = c("Description", "Expense","Income"),
digits = 0,
align = "lcc",
caption = "Table 1.3 Financial position reconciliation") %>%
kable_styling(bootstrap_options = "striped", full_width = FALSE, position = "left")| Description | Expense | Income |
|---|---|---|
| Area Assessments | -20000 | 147 |
| BOT | -3000 | 0 |
| Church and Society | -250 | 0 |
| Condolences | -1250 | 0 |
| Evangelism | -100 | 1963 |
| Harvest | -5640 | 16487 |
| Offering | 0 | 6187 |
| Other | -481 | 12 |
| Petty Cash | 0 | 230 |
| Pledge | 0 | 100 |
| SPPR | -6544 | 3231 |
| Stewardship and Temperance | -89 | 0 |
| Thanksgiving | 0 | 73 |
| Tithe | 0 | 23540 |
| UMYF | -428 | 200 |
3.5 Recommendations
3.5.1 Operational processes
In respect of the financial operational processes, I recommend that:
- The necessary registration be done with the bank in order to enable signatories to transact online while in different locations;
- Third party payments be made directly to the debtors from the Church’s bank account;
- Process documents and formal instructions be drawn (and approved by the Church Council) setting out guidance on the operational procedures of the Treasurer’s mandate; and
- Duly completed requisition forms be submitted to the Treasurer prior to the processing of any payment.
3.5.2 Financial condition
In order to establish a healthy financial position, I recommend that:
- A minimum of $9,000 be retained in the contingency reserve for the purposes of meeting unforeseen financial obligations that may arise. Such a reserve should ideally be funded by setting aside an agreed percentage of the Church’s total income over a specified period of time (quarterly say);
- A metric by which to define a satisfactory financial position be determined with the financial position of the Church being monitored quarterly with reference to this metric;
- The petty cash provision continue to be maintained for the purposes of meeting ad hoc expenses falling below a $500 threshold;
- The Cyclone Idai relief fund be extinguished by transferring the balance of $400 to the Contingency Reserve Fund;
- All members be encouraged to attend weekly Sunday services and engage in other Church programs;
- Efforts continue to be made in seeking ways of increasing revenue;
- A proposal be submitted to the Mission Area to the extent that quarterly area assessment obligations be determined by calculating a fixed percentage of income; and
- The church explores ways of reducing the expenses associated with the pastor’s quarterly visits to Adelaide.
3.5.3 Reserves
XXX
3.5.4 General
Pursuant to paragraph 258 of the Book of Discipline, I recommend that the Finance Committee: - Continue to formulate plans, strategies and implement ways to generate more resources for mission, ministries of the local church and beyond; - Facilitate the compilation of a budget for the local church and submit it to the Church Council for review and adoption on an annual basis; - Develop and implement plans that will raise sufficient income to meet the budget adopted by the Church Council; - Administer the funds received according to the instructions from the Church Council by providing adequate guidance to the Treasurer; - Facilitate the establishment of written financial policies to document internal controls of the local church; - Make provision for an annual audit of the financial statements of the local church and all its organisations and accounts; and - Ensure that contributions designated for specific causes and objects are promptly forwarded according to the intent of the donor(s) and are not used for any other purpose.
4 Certification
This report has been prepared exclusively to assist the Finance Committee and the Church Council in pursuing their mandates as enshrined in the Book of Discipline. The results may not be used or relied upon by any other party or for any other purpose. The person and office of the Treasurer is not responsible for the consequences of any unauthorised use.
4.1 Data Provisions
To prepare the results, I have relied on bank statements and the Recording Secretary’s notes and reconciliations. I reviewed the data for internal consistency and general reasonableness. While I have not verified or audited the data or information on which this report is based, I am satisfied with the validity, accuracy and comprehensiveness of this information.
4.2 Professional Qualifications
I am available to answer any questions on the results, or to provide further details or supporting information as may be appropriate. The undersigned Actuary is qualified by education and experience to render the financial opinion covered in this certification. I am not aware of any direct or material indirect financial interest or relationship, including investments or other services that could create a conflict of interest that would impair the objectivity of my work. A summary of this report was presented and duly adopted by the Church Council at a meeting held on the 13th of November 2020.
Desmond Muzorewa AIAA, BSc Actuary Treasurer (United Methodist Church of South Australia) 9 January 2022
5 Appendix A: Experience Analysis
5.1 Income
income <- data %>% filter(
type=="Income"
) %>%
group_by(transaction, fy) %>%
summarise(
number = n(),
totalincome = sum(Amount),
.groups = 'drop') %>%
arrange(desc(totalincome))
ggplot(income, aes(x = fy, y = totalincome,
color = transaction)) +
geom_point() +
labs(
title = "Income",
x = "Financial Year",
y = "Amount"
)
##Expenses
expense <- data %>% filter(
type=="Expense"
) %>%
group_by(transaction, fy) %>%
summarise(
number = n(),
totalincome = sum(Amount),
.groups = 'drop') %>%
arrange(desc(totalincome))
ggplot(expense, aes(x = fy, y = totalincome,
color = transaction)) +
geom_point() +
labs(
title = "Expense",
x = "Financial Year",
y = "Amount"
)
