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Tenth Biennial Convention of the Evangelical Lutheran Church in Canada
July 21 - 24, 2005
Winnipeg, Manitoba

In Mission for Others

Report of the Treasurer

The accounting firm of Ernst & Young LLP Chartered Accountants has examined the financial records of the National Office of the Evangelical Lutheran Church in Canada and has provided audited financial statements to December 31, 2004. The attached statements were prepared in accordance with the Canadian Institute of Chartered Accountants (CICA) handbook’s reporting requirements on accounting and disclosure standards for not-for-profit organizations. This report summarizes these statements.

In the 2004 fiscal year, revenues of $4,492,486 were received. Revenue sources consisted of benevolence from the synods, directed income for National Office program activities, the Praise Offering from Evangelical Lutheran Women (ELW), donations for the Global Hunger and Development Appeal (GHDA) and Canadian Lutheran World Relief (CLWR), advertising and subscription revenue for Canada Lutheran magazine, interest income from investments and mortgages, and other income. The following table with 2003 comparatives summarizes the revenue sources in 2004:

ELCIC 2004 Revenue Sources

Description
2004
Percentage
2003
Percentage
Synods
$1,057,393
23.5
$1,114,132
24.4
Directed
   634,444
14.1
     586,260
2.8

ELW Praise Offering
      
    99,000
  
  2.2
    
     100,000
 
 2.2
GHDA
629,019
14.0
      611,564
13.4
CLWR
483,082
10.8
      416,720
  9.1
Canadian Lutheran
  240,502
  5.4
      217,586
  4.8
Convention
0
0
      301,131
  6.6

Investment Income

1,262,627

 28.1

 1,078,365

  23.6
Other
      86,419
  1.9
    147,978
   3.2

TOTAL Revenue

$4,492,486

100%

$4,573,736

100%

In 2004, actual expenses for National Office ministries, programs and administration totaled $4,099,031. The following summarizes expenditures:

ELCIC 2004 Expenditures


Description
2004
Percentage
2003
Percentage
Global Ministries
$606,584
14.8%
$678,401
15.8%
National Ministries
449,323
11.0
343,424
8.0
Synodical Ministries
935,114
22.8
888,668
20.7
Support to Ministries
385,172
9.4
408,847
9.5
Partnerships
133,245
3.3
171,396
4.0
GHDA
629,019
15.3
611,564
14.2
CLWR
483,082
11.8
416,720
9.7
Canada Lutheran
197,589
4.8
235,146
5.5
Convention
10,212
0.2
232,898
5.4
Interest Expense
154,467
3.8
134,520
3.1
Amortization
77,480
1.9
76,885
1.8
Other
37,744
0.9
99,107
2.3

TOTAL Expenses

$4,099,031

100.0%

$4,297,576

100.0%

In the 2004 fiscal year, the excess of revenue over expenses totaled $393,455 before the pension contribution towards the deficit funding of $2,000,000 and the recovery of other liabilities of $180,000 resulting in an excess of expenses over revenue for the year of $1,426,545. Contributions to endowments were $21,559.

The Statement of Financial Position indicates that net assets have decreased from $20,452,580 in 2003 to $19,047,594 in 2004. The following summarizes the assets, liabilities and net assets of the National Office:

ELCIC 2004 Assets

Description
2004
2003
Current Assets
$2,976,939
$1,316,223
Investments
10,220,113
11,621,460
Land Held for Future Development
3,101,942
2,350,489
Mortgages Receivable
9,656,540
10,357,106
Capital Assets
318,893
385,445

TOTAL Assets

$26,274,427

$26,030,723

 

ELCIC 2004 Liabilities & Net Assets

Description
2004
2003
Current Liabilities
$3,962,556
$1,695,564
LIFE Certificates Payable
1,575,789
2,014,462
Deferred Revenue
490,678
476,287
Continuing Education Plan
468,724
468,638
LIFE Annuities Payable
334,086
348,192
Other Liabilities
395,000
575,000
Net Assets
19,047,594
20,452,580

TOTAL Liabilities & Net Assets

$26,274,427

26,030,723

A complete set of financial statements and notes to financial statements has been provided at the end of this report. (See Attachment 3)

Appointment of Auditor

At the convention, the National Church Council will bring forth a recommendation for the appointment of auditors for the National Office for the 2005 and 2006 fiscal years.

Thank You

We would like to acknowledge and thank all the organizations, synods, congregations and individuals who have supported the ministries and programs of the National Office in 2004. Your support is sincerely appreciated.

Budget

2005 Operating Fund Budget

The Evangelical Lutheran Church in Canada’s 2005 operating budget for the National Office is a balanced budget with revenues and expenses projected at $3,418,945.

Revenue

General revenues of $1,264,045 consist of benevolence received through the five synods, undesignated gifts, investment income, and the ELW Praise Offering. This general revenue forms the base of each year’s budget.

The 2005 operating budget projects that $2,154,900 of program directed revenues will be sourced from gifts directed to specific program activities, endowment and trust interest, grants, royalties, service fees, cost recovery fees, fund raising activities and internally restricted reserves. Should any of this revenue not be sourced then the related activity expenditure will not be undertaken.

Expenses

Program expense budgets have been developed based on each area’s allotment of general funds plus all program directed revenues.

Global Ministries has been budgeted at $384,600 and includes expenditures for Mission in the World and Public Policy. Mission in the World expenditures cover program and missionary personnel costs for long term and short term missionaries and volunteers in mission. It also includes assistance for partner churches overseas. The Public Policy budget provides salary and travel support to the Lutheran Office of Public Policy.

The National Ministries budget of $239,500 covers expenditures for the National Church Council (NCC), Worship, information technology, and management staff travel. NCC expenses include meeting and travel expenses for NCC and its committees and task forces, the Leadership Study, and support to colleges and schools. The Worship budget provides for program costs and Worship Program Committee meetings, worship planning with the ELCA, bulletins and publications, the bi-annual worship conference, and Eternity for Today. Expenditures for Rasmus, the Website, and maintenance of the National Office computers are covered under the information technology budget.

In 2005, expenditures of $236,650 have been budgeted for synodical ministries. Activities include leadership, stewardship, Lutheran Planned Giving, youth, Women’s Desk, the Chinese Special Interest Conference, the Conference of Bishops, national/synodical conferences and Lutheran Outdoor Ministries in Canada (LOMIC).

Support to ministries covers expenses for rent, insurance, legal and audit professional fees, and general office expenses and have been budgeted at $246,400.

The Partnerships budget of $135,200 provides support for Lutheran and Ecumenical Relationships. This includes memberships, travel and meetings with the Lutheran World Federation, the Lutheran Council in Canada, the World Council of Churches, the Canadian Council of Churches, the Joint Anglican Lutheran Commission, and other interfaith groups.

The Global Hunger and Development Appeal (GHDA) is budgeted at $546,000 for 2005 and is the primary means by which this church raises money for development and relief work in Canada and around the world. Seventy percent of all receipts not designated for a special country appeal are forwarded to CLWR. The balance of GHDA funds support the work of PLURA, KAIROS, Project Ploughshare, the Church Council on Justice and Corrections, advocacy and education on the territories of the synods, public policy, and GHDA program expenses. Special project appeals are also included in this budget.

Directed giving to Canadian Lutheran World Relief (CLWR) has been budgeted at $450,700. CLWR is the service delivery arm for development programming and overseas relief for ELCIC and Lutheran Church–Canada. Remittances forwarded from the synods are sent directly to CLWR each month.

The Communications budget of $248,800 includes expenses for eight issues of Canada Lutheran magazine as well as expenses for Communiqué, resource creation, and synod consultation on communications. In 2005, on the recommendation of the Communications Task Force, the ELCIC will hire a manager of communications to co-ordinate the communications programs.

The National Convention will take place in Winnipeg, MB at the University of Manitoba campus from July 21 to 24. Expenses have been budgeted at $300,800.

On the recommendation of our auditors, a new section will be included in future budgets to report on affiliated conferences and events such as the National Youth Gathering, Global Mission Events, the Worship Conference, and the Women's Conference. Committees coordinating these events will be required to submit a budget to the National Office and provide accounting of all revenues and expenses. As this information becomes available, it will be included in our financial records.

The salary budget of $627,295 includes an allowance of 3% for merit and inflation adjustments.

2006 & 2007 Budgets

Budgets have been projected for 2006 & 2007. Assumptions used in preparing these budgets are: benevolence to remain the same as in 2005, program expenditures to remain flat, and an allowance for cost of living salary adjustments. Both 2006 and 2007 budgets project deficits of $23,205 and $45,605 respectively which will be covered from unrestricted net assets.

The details of the 2005 to 2007 proposed budgets with comparative figures from 2003 and 2004 are provided in Attachment 1 to this report.

Historical Summary of Benevolence Remittances

For your information, a historical summary of benevolence receipts from 1986 to 2002 is provided in Attachment 2 to this report.

Respectfully Submitted

Norm Thompson
Treasurer

In full communion with The Anglican Church of Canada
© Copyright 2007 Evangelical Lutheran Church in Canada