Introduction
The 2007/08 budget continues the positive trends of the previous two budgets. Income in the budget year is expected to improve to the extent of enabling both a judicious increase in expenditure in priority areas and a reduction in Assembly Assessment beyond the level initially expected. It is a balanced budget, in which expenditure matches income.
General Assembly 2006 signalled a desire for a reduction in Assembly Assessment, and in 2007/08 it will be possible to move significantly in that direction, decreasing the levy by 14 percent. While changes in the payment of the Seniority Allowance represent a 10 percent reduction, the remaining 4 percent has been made possible by an increase in other sources of income. The decrease in the levy this year follows on from a 5 percent reduction in Assembly Assessment in 2006/07.
In this budget, Assembly Assessment equates to an average 11.5 percent of accessible parish income, compared with 13 percent in the current year. Parishes in 2007/08 will pay in a range between 10 and 13.5 percent, reflecting the effect of the membership component on the assessment.
If you would like more information about how Assembly Assessment is spent, please contact the Assembly Office to request copies of the recently produced pamphlet outlining services available and the cost of providing each service. Provisional results for the current year indicate that expenditure will be close.
Council is grateful to the Church’s Finance team and the Resource Sub-committee for their continuing efforts, which have ensured that the Church’s financial position is sustainable and have put in place a platform from which future initiatives can be undertaken. As always, we welcome your questions and comments, which can be addressed to the convener of the Resource Sub-committee, John Trainor, or the Finance Manager, Brendan Sweeney.
On behalf of Council of Assembly and the Resource Sub-committee
2007/08 budget highlights
- Assembly Assessment decreases by 14 percent. While 10 percent of this decrease is to compensate for the return of the Seniority Allowance to the parishes, the balance is an additional reduction made possible by higher levels of income from other sources.
- The Assembly Assessment for 2007/08 equates on average to 11.5 percent of assessable parish income, compared with 13 percent in 2006/07.
- Income rose by 7 percent largely due to a higher level of Grants Received and increased Donations, which collectively rose by $416,000; and to increased interest of $96,000. These increases were offset by a reduction of Assembly Assessment income of $158,000 beyond what was due from the transfer of the Seniority Allowance to parishes.
- Expenditure overall increased by 8 percent when related to the previous budget. The major reason for the increase is the extra $285,000 needed to fund the new distance learning model of the School of Ministry, and initiatives of the National Mission Enabler. Much of this expenditure has been funded by special external grants.
Comparison between 2007/08 and 2006/07
The information below is set out in two different formats to facilitate better clarity and transparency around how General Assembly funds will be used during 2007/08.
Table 1 compares an adjusted budget for last year with the budget for 2007/08 in a "profit and loss" statement format. The budget for 2006/07 has been adjusted to make it comparable with the next year’s budget by:
- Deleting matching cost and income for GA06 of $225,000.
- Deleting inaccessible investment income of $233,000 to match the treatment in the current year’s budget.
- Deleting seniority allowance of $395,000 expenditure and matching reduction of Assembly Assessment.
Table 2 shows the 2006/07 budget information in a different way. It is presented by function (eg. communications, administration, School of Ministry) rather than by expenditure type (staff, travel etc).
Explanatory notes follow the tables to aid interpretation of the information presented.
Table 1: Assembly Assessment calculation
| Income ($000's) | 2006/07 | 2007/08 | Variance $ | Variance % | Notes |
| CV Contribution | 373 | 385 | 12 | 3% | |
| Assembly Assessment | 3,686 | 3,528 | ( 158) | -4% | |
| Administration Levies | 173 | 153 | ( 20) | -12% | |
| Grants Received | 458 | 748 | 290 | 63% | 2 |
| Donations Received | 155 | 281 | 126 | 81% | |
| Investment income | 869 | 998 | 129 | 15% | |
| Property Income | 121 | 177 | 56 | 46% | |
| Miscellaneous Revenue | 138 | 100 | ( 38) | -28% | |
| Total Income | 5,973 | 6,370 | 397 | 7% | |
| Expenditure ($000's) | |||||
| Staff Costs | 1,710 | 1,841 | 131 | 8% | |
| Beneficiary Fund | 1,111 | 1,126 | 15 | 1% | |
| Seniority Allowance | 14 | 14 | - | 0% | |
| Travel Costs | 268 | 411 | 143 | 53% | |
| Property costs | 514 | 456 | ( 58) | -11% | |
| Communications | 301 | 276 | ( 25) | -8% | |
| Provision for Unpaid AA | 537 | 441 | ( 96) | -18% | |
| Grants Expense | 767 | 711 | ( 56) | -7% | |
| Bursaries and Allowances | 225 | 447 | 222 | 99% | |
| Miscellaneous Costs | 468 | 646 | 178 | 38% | |
| Total Expenses | 5,915 | 6,369 | 454 | 8% | |
| Operating Surplus | 58 | 0 | ( 58) | -100% |
CV = Co-operating Venture
AA = Assembly Assessment
Table 2: Assembly Assessment breakdown
| Governance | Expenditure | Income | Net | Notes |
| Council Of Assembly | 37 | (37) | ||
| Moderator | 62 | (62) | ||
| Council Sub-Committees | 12 | (12) | ||
| Task Groups | 15 | (15) | ||
| 126 | 0 | (126) | ||
| Administration | ||||
| Archives | 188 | 70 | (118) | |
| AES and Legal | 261 | (261) | ||
| Finance and Office | 822 | 208 | (614) | |
| Communications | 375 | 130 | (245) | |
| Human Resources | 215 | (215) | 3 | |
| 1,861 | 408 | (1,453) | ||
| Mission | ||||
| National Mission Enabler | 344 | 189 | (155) | 4 |
| Youth Ministry | 234 | 94 | (140) | 4 |
| Asian Council | 28 | (28) | ||
| Pacific Island Synod | 74 | (74) | ||
| Te Aka Puaho | 179 | 82 | (97) | 5 |
| Other Grants | 235 | (235) | ||
| Global Mission | 381 | 381 | 0 | 6 |
| 1,475 | 746 | (729) | ||
| Leadership | ||||
| School of Ministry | 1,255 | 596 | (659) | 7 |
| SoM houses | 85 | 122 | 37 | |
| 1,340 | 718 | (622) | ||
| Subtotal | 4,802 | 1,872 | (2,930) | |
| Unallocated Interest | 584 | 584 | ||
| Assembly Assessment | 441 | 3,528 | 3,087 | |
| Coop Ventures | 385 | 385 | ||
| Beneficiary Fund | 1,127 | (1,127) | ||
| 1,568 | 4,497 | 2,929 | ||
| Total | 6,370 | 6,370 | 0 |
Explanatory information
The notes on pages 5-7 of this information pack should be read in conjunction with the tables on pages 3 and 4 of this report.
1. Balanced budget
The 2007/08 budget is in balance, with total income matching total expenditure. This compares with a budgeted operating surplus in 2006/07 of $58,000 (after adjusting the budget by the amount of inaccessible income in that year of $233,000, in accordance with the current year approach). Last year Assembly budgeted to include inaccessible interest within Investment Income and ran a surplus to match the amount that was inaccessible. This year Assembly is budgeting to receive interest net of the amount that is inaccessible of $207,000. Investment income has been reduced by this amount and consequently there is no need for a budget surplus. It is anticipated that interest income will be able to be reported on the new basis in the 2006/07 and in subsequent accounts.
2. Grants Received
Budgeted Grants income of $748,000 is summarised:
| Council of World Mission | 236 | ||
| Synod of Otago and Southland | 350 | ||
| Presbyterian Foundation | 62 | ||
| Other Grants Income | 100 | ||
| 748 |
Budgeted funding has been confirmed and compares with budgeted grant income of $458,000 in 2006/07; an increase of $290,000.
3. Human Resources (HR)
Staff costs associated with Human Resources decreases because the HR manager role was not filled on the resignation of the former incumbent in January. The National Mission Enabler has assumed the role of HR manager and is contracting advisory requirements to an outside source. The cost of the Terralink House office manager, formerly shared between HR and the Assembly Executive Secretary, has been moved to Finance.
4. National Mission Enabler (including Youth)
Costs will increase by $145,000 or 33 percent due largely to an increase in youth ministry, including the planned establishment of a youth worker in Auckland. Increased costs are largely funded by external grants with the Auckland youth appointment itself funded entirely by Council of World Mission funds.
5. Te Aka Puaho (TAP)
In consultation with TAP, Assembly's contribution to their ministry has been reduced from $135,000 to $97,000. (In 2004/05 the Assembly contribution stood at $329,000). TAP are extending a programme of Amorangi training, and the grant from CWM for that purpose is to rise from $32,000 in 2006/07 to $82,000 in this current budget.
6. Global Mission Office
Global Mission does not receive direct Assembly funding but is primarily funded by interest on investments and donation income. In 2006/07 donations were about $75,000 above budget and this level of giving is reflected in the new budget.
7. School of Ministry
At $1,340,000 expenditure is budgeted to rise $285,000 or 21 percent. Major reasons for the rise are considerably higher bursary and travel costs and also increased staff expenses associated with the new distance learning model that will take effect from February 2008. Most of these increased costs ($232,000) will be met by higher external grants, largely Synod of Southland and Otago and other internal funding. Anticipated bursary costs of interns placed with parishes under the new model of $110,000 is budgeted to be offset to a considerable extent by parish contributions.
2007/08 Assembly Assessment
Assembly Assessment has reduced by 14 percent from the level set in 2005/06. This is mainly due to the New Seniority Allowance no longer being paid by Assembly. However about 4 percent, or $150,000, of the reduction is an additional amount that Assembly has been able to pay because of increased income from other sources.
Assembly Assessment across the Church in 2007/08 will average 11.5 percent of parish income that is assessable but only 9 percent of total parish income. Assessable parish income is less than total parish income as there are parts of parish income on which the Assembly Assessment is not payable.
Table 3. Assembly Assessment Calculation
| 2007/08 | 2006/07 | Variance $ | Variance % | |
| National Services Levy | 2,401,628 | 2,559,400 | -157,772 | -6.2% |
| Beneficiary Fund | 1,126,372 | 1,109,000 | 17,372 | 1.6% |
| Seniority Allowance Levy | 409,000 | -409,000 | -100.0% | |
| Total to be recovered | 3,528,000 | 4,077,400 | -549,400 | -13.5% |
| Membership Recovery (50%) | 1,764,000 | 2,038,700 | -274,700 | -13.5% |
| Income Recovery (50%) | 1,764,000 | 2,038,700 | -274,700 | -13.5% |
| 3,528,000 | 4,077,400 | -549,400 | -13.5% | |
| Total Communicant Membership | 28,452 | 28,946 | -494 | -1.7% |
| Total Accessible Income | 31,397,773 | 31,244,139 | 153,634 | 0.5% |
| AA per member (excl TAP) | 62.00 | 70.43 | -8.43 | -12.0% |
| AA as % of Income | 5.6% | 6.5% | -1% | -13.8% |