1 Introduction

This report on the financial position of the United Methodist Church of South Australia (“Church”) covering the period from 30 June 2021 to 14 February 2022 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.

The Church is grateful for the participation of all congregants in the affairs of the Church’s administration particularly by their prayers, presence, gifts, service and witness as enshrined in the Book of Discipline.

The Church is in a sound financial position after allowing for the various reserves, budgetary allocation and expected cashflows to 30 June 2022 (excluding historical amounts that are considered as payable by the Mission Area in respect of area assessments).

2 Summary of results

The Church’s financial position improved significantly over the past 4 years as shown by the increase in annual net cashflows from 2019 to 2021 with the most significant increase taking place between the 2019 and 2020 financial years where the net cashflows increased from -$11,000 to $12,000. The improvement is also reflected in the steady increase in the Church bank balance from $31,000 at 30 June 2019 to $57,000 at 30 June 2021.

The improvement in the Church’s financial position was a result of:

Improved timing of transactions
Documentation and standardisation of policies and procedures relating to the disbursement of funds
Principled and consistent administration of policies and procedures regarding disbursement of funds, especially with respect to Church and Society, Evangelism and SPPR expenses
Establishment and maintenance of various reserves
The resolution by Council to pay quarterly area assessments of $5,000

further enhanced by:

A significant decrease in SPPR expenses associated with the Pastors’ periodic visits to Adelaide resulting from a combination of the lack of a substantive local pastor; and interstate travel restrictions imposed in response to the COVID-19 pandemic.

The improved financial position of the Church provides for the determination of a realistic budgetary allocation to all key Committees for the financial year ending 30 June 2022. This will afford the various committees to be more flexible in performing their respective functions autonomously without the express need to approach the Finance committee for approval (except for cases where their expenses exceed their allocation).Please refer to Appendix A for a breakdown of the budget.

It is important to note that the results discussed above do not allow for the historical amounts that are considered as payable by the Mission Area in respect of area assessments.

3 Bank reconciliation

The bank balance as at 14 February 2022 amounted to $67,000.

A reconciliation of the Church bank balance from 30 June 2021 to 14 February 2022 is shown in the table below.

Table 3.1 Bank reconciliation
Description	Amount
Opening Bank Balance	57260.04
Net Cashflows	9836.09
Closing Bank Balance	67096.13

4 Financial position

After allowing for the various funds earmarked for specific initiatives, the net assets of the church are in a slight deficit of $7,000. The estimated cash inflow for the remainder of the financial year is expected to be enough to offset this deficit. The net asset balance above does not allow for the historical amounts in excess of $30,000 owed to the Mission Area in respect of unpaid area assessment allocations.

A summary of the financial position of the Church as at 14 February 2022 is shown in the table below.

Table 4.1 Financial position
Description	Amount
Available funds	67096.13
Building Fund	-38028.40
Contingency Reserve Fund	-10000.00
Budget	-6500.00
UMYF Advisors Fund	-150.00
SPPR	-9000.00
Website maintenance	-360.00
COVID provisions	-500.00
Other	-10000.00
Net Balance	-7442.27

5 Cashflow analysis

The year to date cashflow is positive and is expected to remain positive until 30 June 2022. This is a result of a more stringent and structured cash outflow management process and receipt of consistent cash inflows.

5.1 Net cashflows

Cash inflow has been driven by Harvest, Tithes and Offering; and cash out flow has been driven by area assessments, Harvest, Church and Society; and Evangelism.

Below is a summary of the year to date net cashflows. Cash inflows and outflows are shown in Tables 1.3 and 1.4 in Appendix B below.

Table 5.1 Net cashflows
Description	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Total
Area Assessments	0	0	-3000	-2000	0	0	-5000	0	-10000
Condolences	100	0	-100	-100	0	0	0	-250	-350
Evangelism	0	-205	0	-743	-51	0	0	0	-999
Harvest	2680	970	3250	500	2330	300	-4260	0	5770
NA	0	0	0	0	0	0	0	0	0
Offering	347	420	180	495	348	545	595	75	3005
Other	0	50	-218	-200	0	0	-220	0	-588
SPPR	30	40	10	0	20	0	0	0	100
Thanksgiving	0	0	0	0	200	0	50	0	250
Tithe	1924	1084	1515	1963	1796	1566	1585	1215	12648
Total	5081	2359	1637	-85	4643	2411	-7250	1040	9836

6 Certification

I am available to answer any questions on the results, or to provide further details or supporting information as may be appropriate. I am qualified by education and experience to render the financial opinion covered in this certification; and 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.

Desmond Muzorewa AIAA, BSc

Actuary

Treasurer (United Methodist Church of South Australia)

21 February 2022

7 Appendix A: Budget breakdown

Family Ministries, Church and Society; and Evangelism were 31%, 23% and 15% respectively based on previous and expected future cash outflow requirements.

Below is a breakdown of the budget allocation.

Table 7.1 Bank reconciliation
Committee	Allocation	Percentage (%)
BOT	250	3.85
Nurturing	150	2.31
Outreach	150	2.31
Witnessing	150	2.31
Sunday School	150	2.31
Prayer	150	2.31
Evangelism	1000	15.38
Stewardship and Temperance	250	3.85
Church and Society	1500	23.08
Christian Education	250	3.85
Family Ministries	2000	30.77
Worship	250	3.85
History and Archives	250	3.85
Total	6500	100.03

8 Appendix B: Cash inflow and outflow analysis

8.1 Cash inflow

Table 8.1 Cash inflow
Item	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Total
Condolences	100	0	0	0	0	0	0	1235	1335
Harvest	2680	970	3250	500	2330	300	1200	0	11230
Offering	347	420	180	495	348	545	595	75	3005
Other	0	50	10	0	0	0	0	0	60
SPPR	30	40	10	0	20	0	0	0	100
Thanksgiving	0	0	0	0	200	0	50	0	250
Tithe	1924	1084	1515	1963	1796	1566	1585	1215	12648
Total	5081	2564	4965	2958	4694	2411	3430	2525	28628

8.2 Cash outflow

Table 8.2 Cash outflow
Item	Aug	Sep	Oct	Nov	Jan	Feb	Total
Area Assessments	0	-3000	-2000	0	-5000	0	-10000
Condolences	0	-100	-100	0	0	-1485	-1685
Evangelism	-205	0	-743	-51	0	0	-999
Harvest	0	0	0	0	-5460	0	-5460
Other	0	-228	-200	0	-220	0	-648
Total	-205	-3328	-3043	-51	-10680	-1485	-18792

The UMCSA Treasurer’s Report