Financial Report from the Diocese of Newark

TREASURER'S REPORT

Mr. Richard Graham reported on the current status. Income and cash flow remained the biggest challenges for the Diocese this year when looking forward to FY 2009. There was currently a $633,000 deficit. Pledge income received was $366,000 below budget, an improvement over last month's income deficit of $395,000. Significant pledge income remained outstanding from 2007. Expenses were approximately $15,000 under budget.

The Council received $1.5 million in pledge income through September versus a budgeted amount of $1.875 million. Additional funds of approximately $260,000 were due to Council from investment sources that had not yet been recorded. Event and other income had been limited to date.

Pledge income for FY 2008 picked up in September. Income of $224,000 was 9% over the projected amount. YTD was still 20% behind projected year to date income (received = $1.5 million vs. projected $1.9 million). Over 5% of the outstanding pledges (against budgeted total) at the end of 2007 remained unpaid 9 months into this year. (NOTE: Prior year unpaid pledge amounts will continue to change as reconciliations are received and pledge data recalculated). Over 19% (22) of 2007 pledge reconciliation forms remained outstanding. Of the 22 outstanding reconciliations, eight were with congregations in transitions and three that faced serious financial situation. The Finance office continued to advise congregations of past due pledges and reconciliations through monthly statements, phone contact, etc.

Overall our expenses were $15,000 under budget. Most departments were at or under budget. We remained behind in projected pledge payments to the Episcopal Church for 2008 and 2007. The $406,000 that had been budgeted to expense by 30 September had not been paid. However since the expense was incurred it appeared on the financial statements under Outreach expenses. There had been no payments into the Lay Pension Plan this year. As of 30 September 2008 we were $127,000 behind. Our budgeted expense for 2008 was $170,000. In September payment was made to the EC against our 2007 pledge. To date, 74% of the FY 2008 budget to date was spent.

The 2009 budget process had begun and will be based on a forecast of lower income for 2009. Expenses will be looked at closely to ensure that the budget reflected the mission and priorities of the Diocese. Ways to reduce budgeted expenses where there were alternative approaches/flexibility available would be considered. A subcommittee of the Council will be reviewing the 2008 budgeted financial statement to provide advice on current year results and opportunities to improve in 2009.

The investment manager of TIAA-CREF will meet with the Trustees and a congregation next month on October 23. The representative would be available for presentations to districts and congregations the next day.

A plan of payment to the national church will be formulated to address meeting the diocesan commitment to the national church. A better discipline of payment was needed to begin a transfer from payments issued when funds became available to payment of first dollars of income.

From:
THE DIOCESE OF NEWARK
OUR DIOCESAN COUNCIL
Wednesday, October 8, 2008