NCC Executive Board Reinforces Fiscal Accountability
February 29, 2000, NEW YORK CITY "Tough talk" reinforcing the need for financial austerity was accompanied by expressions of hope and a sense of new beginning as the National Council of Churches' Executive Board held its first meeting since last November's sweeping restructure of the 50-year-old ecumenical organization.
Encouraging words threaded their way throughout the February 28-29 meeting, beginning with Ambassador Andrew Young's opening meditation on Hebrews 12 evoking the ecumenical leaders of the past 50 years and affirming that "we will measure up to the challenges of this day."
Others praised the more temporal achievements in cutting budgets, simplifying structures and, as Bishop Paul A. Stewart of the Christian Methodist Episcopal Church, Birmingham, Ala., put it, "making the NCC more effective in light of the funds we have."
The Rev. Wesley S. Granberg-Michaelson of the Reformed Church in America, New York City, bringing the final report of the Transition Management Team (established last October to develop structural and staffing plans to ensure sustainability and order in the NCC's life), said, "There is reason to be encouraged about the future .At this juncture we believe the organizational life of the Council is becoming stabilized and well ordered."
"We've stopped the financial hemorrhaging," affirmed Dr. Bob Edgar, NCC General Secretary. "There's a new wind blowing through the NCC."
He, his staff and the Council's officers detailed a score or more of steps taken since November to ensure financial accountability and control; standardize personnel, travel and other policies and practices; cover the 1999 year-end accumulated deficit estimated at $4 million, and ensure a deficit-free year 2000 with a budget that begins to build back the NCC's depleted financial reserves.
They also proposed a reorganization in which the NCC's work would be carried out through Church World Service and Witness, the General Secretariat and a new Mission Cluster, to encompass education, justice, public witness and unity program areas. All are responsible ultimately to the NCC General Assembly, the Council's highest legislative authority made up of official delegates from the 35 member communions.
While the specifics of restructure, including resolution of how Church World Service's financial management and administrative needs can best be met, will be the focus of the Executive Board's May meeting, the Board in February set Mission Cluster priorities for the next 12 to 18 months (see sidebar, to follow).
Action on Year 2000 Budget, Change in Fiscal Year
NCC Treasurer Philip Young, a Presbyterian from San Rafael, Calif., presented to the Board a proposal to change the NCC's fiscal year from the calendar year to July 1-June 30. This will enable the General Assembly to receive a more timely audit at its November annual meetings. The Board approved.
Effective July 1, 2000, the change has a second, more immediate advantage. It allows the NCC's consolidated budget for calendar year 2000 to function as an interim budget for the first six months of the year 2000 as the Council restructures.
The Board received the year 2000 budget and specified that it "be a guideline for fiscal oversight until the next meeting of the Executive Board in May 2000," when the NCC's Administration and Finance Committee is to bring a new budget for the fiscal year 2000-2001 for approval.
Although meant to be used for just six months, it is written as a 12-month budget to better enable review and analysis. It projects total expenses of $71,281,583 and a year-end revenue over expenses of $386,562.
The Church World Service and Witness portion of the budget ($62,789,530 in total expenses) represents a $9.1 million (17 percent) increase over 1998 and a $9.4 million (18 percent) increase over 1999. The remaining $8.5 million, shared by the General Secretariat and Mission Cluster, represents a $3 million (26 percent) decrease from 1998 and a $5.9 million (41 percent) decrease from 1999.
"A program matrix is carrying out the ministry according to your directives," Mr. Young said in presenting the year 2000 budget to the Executive Board. "All restrictions on funds are respected. There will not be 'authorized but unbudgeted' expenses in the year 2000. Reductions in staff have been made. They were painful. They are now behind us." (Twenty-seven titles were cut, with nine staff separations required. Some affected positions were vacant when cut or encompassed more than one portfolio.)
Last November, the Executive Board mandated a 10 percent "set aside" from two funding streams, the Ecumenical Commitment Fund (contributed by member communions) and Common Support Services transfers (contributed by the NCC's program units for centrally provided services including administration and communication). The savings are to be used to begin to restore the NCC's depleted reserves.
"That 10 percent reduction is anticipated in the budget, although it's not in a line item," Mr. Young said. The Executive Board voted to reaffirm its demand for the "set aside," asking that it be represented clearly in a line item in the fiscal year 2000-2001 when it is brought for Board approval in May.
"We can't have another year when expenditures exceed income," said Dr. Belle Miller McMaster of the Presbyterian Church (U.S.A.), Avondale, Ga., who made that motion. "I believe the year 2000, under Bob Edgar's leadership, is a new beginning and a great hope. It's also a very vulnerable year," she said. "We must build back the reserves. The new General Secretary can't rebuild the NCC unless we get our financial house in order."
Coverage Report: 1999 Year-End Accumulated Deficit
Dr. Edgar reported on funds raised to cover the NCC's 1999 year-end accumulated deficit estimated at $4 million. The shortfall resulted from "authorized but unbudgeted" expenses that included $2.4 million in management consulting fees since March 1998, a one-time contribution of about $550,000 to the NCC's Pension Fund to cover a payment missed several years ago, and overexpenditures in several departments in the General Secretariat. Commitments as of February 27 included:
* $805,576 already in hand from NCC member communions.
* an additional $1,134,299 pledged from NCC member communions, some of it contingent on other NCC member churches' commitments.
* $1,453,000 from Church World Service to cover its portion of "authorized unbudgeted NCC costs for Pappas consultants, pension plan consulting, legal costs, other insurance consulting, and unbudgeted temporary help."
* $137,867 from the Burned Churches Fund to defray the costs of the special examination of the program.
* $358,590 recovered from various parties in the final settlement in the NCC's pursuit of funds lost in what proved to be fraudulent securities issued in the name of the Prague-based Banka Bohemia.
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