Piedmont UU Church Fiscal Year 2017 – A History
In mid January of 2018 Meredith Norman of the Communications Team asked if I would write an article for the Piedmont UU Church newsletter about the church’s finances over the course of the 2017 calendar year. I agreed, thinking some members would find the topic of interest.
Sadly, as the newsletter deadline loomed, “the crud” that many of us fell victim to, plus the seemingly ever-present involvement that the health-care industry takes in the lives of retired people, conspired to thwart my intentions to produce a history.
Fortunately, a new month afforded a new deadline and history, unlike politics or journalism, can usually wait.
Prehistory
I got to know Lee Carnes and a number of other Piedmont UU Church members while we volunteered at The Mountain, the UUA retreat center in North Carolina near the Georgia and South Carolina border. In 2016 Lee was on the Piedmont UU Church Board of Trustees as the President-Elect. In the Fall of 2016 Lee indicated the Treasurer was stepping down and asked that I volunteer as a replacement. I indicated that my training was appropriate but that I had never actually done any accounting in the course of my career. I worked as a computer consultant for a public accounting firm and later as auditor for computer systems. Lee indicated I would do.
I started off as an acolyte to Lucy Neel who showed me how payroll was processed, how transactions of various sorts were booked, and how the financial reports were produced. Lucy introduced me to the office staff and attended Finance Committee meetings and Board of Trustee meetings with me as I got to know more and more members of the Piedmont UU Church community. This period of time was the wrap up of the 2016 year as well as the wrap up of Robin Tanner’s tenure as lead minister. It was also the time when the 2017 budget was being developed. I was involved in learning the nuts and bolts of the payroll processing and the generation of the financial statements. Since I had very little history with the church I had no meaningful input to the budget process.
Budget, Expenses, and Cash Flow, OH MY!
Early in 2017 some members of the Finance Committee expressed reservations about the 2017 budget, suggesting that revenue estimates had been inflated to balance the budget.
Cash flow in January was positive (income exceeded expenses) largely due to members who elected to pay their pledge early in the year. Despite the positive cash flow for January, the Operating Fund Balance was negative at the end of January. The Operating Fund Balance is a way of judging financial health. Various funds have been set up over the years on the church’s books. These funds are for specific purposes such as buying hymnals, or the Minister’s Discretionary Fund. The Operating Fund Balance is the sum of the bank balances less the total of all these “designated” funds. The Operating Fund Balance can be thought of as the cushion of cash the church has beyond it obligations. Having the cushion become negative was concerning.
Cash flow in February was again positive. The Operating Fund Balance was also positive by the end of February. Lisa Dickinson made a presentation to the Board of Trustees at a special BoT meeting in February outlining the Finance Committees’ concerns about the 2017 budget. Her analysis suggested that revenues might fall short by over $25,000.
Cash flow in March were seriously negative. Expenses in March were more than twice the income for March. Pledge income was about one third of the amounts of the prior two months.
Cash flow in April was again negative but by a much smaller amount. Both the Finance Committee and the Board of Trustees were keenly aware of the issue of insufficient cash flow and working to resolve the issue through encouraging timely pledge payments and reducing expenses. The Operating Fund Balance had again become negative.
April was the first month where the new system for preparing financial reports was implemented. This system was largely the result of very hard work by Deb Davelka. We also had consulting assistance from a CPA, and former treasurer Helen Patil.
The Finance Committee and the Board of Trustees both held special sessions at the end of April and beginning of May, respectively, to address the financial issues. By the end of April the Finance Committee was anticipating a revenue shortfall of $72,000 for 2017. The Board of Trustees voted to temporarily suspend UUA contributions, to suspend splitting the collection plate with non-profits, and to terminate the Interim Minister effective July 1. (The Interim Minister position was later retained through the end of 2017 through donations for that purpose from angel donors.)
Cash flows for the remaining months of 2017 were positive. For a number of those months the positive cash flow was largely due to the elimination of the Lead Minister’s salary from the operating budget, plus the suspension of payments to the UUA. June was helped by income from the yard sale and November and December were helped by income from the auction. Pledge income was particularly robust in November and December which was not at all certain in May when we faced a projected shortfall of $72,000.
Final Analysis – end of 2017
Pledges came in at 98.5% of the original budget. The collection plate came in at 98% of the original budget. Unpledged Support (money given beyond pledged amounts) exceeded the original budget but was not quite enough to make up for shortage in pledges income. Both the yard sale and the auction were successful but achieved only 68.5% of the optimistic budget number for them in 2017. Rental income increased at year-end to achieve 94% of its budget. Due to cuts to expenses we spent only 76% of our budgeted expenses in 2017. This meant we closed out 2017 with a “cushion” in the Operating Fund Balance of over $67,000, a vast improvement from the beginning 2017 when it was negative.
I hope I have adequately explained our financial history for 2017. If anyone has questions or comments, I can be reached at treasurer@puuc.org.
Frank Mabrey
