Stated 2010 Revenues: $ 40,977,763
Stated 2010 Expenses: $ 36,086,557
Net Book Surplus for 2010: 4,891,206
Ordinarily, one should be proud of producing a budget surplus of nearly $5 million, right? Now, dig a little deeper. There is much more there than meets the eye.
For example, the numbers for Episcopal Migration Ministries (EMM), which underwrites refugee relocation services across the country using State-Department-supplied subsidies, show a net $3.3 million-dollar loss:
EMM 2010 Revenues: $ 10,317,561
EMM 2010 Expenses: $ 13,624719
Net EMM Loss for 2010: $3,307,158
This loss knocks total combined operating surplus down from $4,891,206 to just $1,584,209. And if one looks at the figures for just the Church's mission programs, we see where this "surplus" came from:
Church Mission Budget for 2010: $ 17,101,678
Actual Mission Expense in 2010: $ 15,482,522
Budgeted but not Spent in 2010: $ 1,619,156
So it is easy to show a surplus of $1.6 million if you simply do not spend that money on mission as planned.
Never fear, however -- true to form, there were no cuts for legal expenses incurred in 2010, but instead a cost overrun of $86,833:
2010 Title IV and Legal Assistance to Dioceses: $ 1,489,833
2010 Budget for Title IV and Legal Assistance: $ 1,403,000
The resulting message is clear: to keep our lawsuits going, we will slash mission to the bone!
This is, however and alas, not the whole story. For as mentioned earlier, the numbers presented are not to be trusted at this point. There is an unexplained gap of over $1.3 million in the total EMM revenues shown as of the year end, and the month-by-month figures reported during the year. That is to say, as shown above, the year-end statement reports cumulative EMM revenues for the previous twelve months of $10,317,561. But if you go back to the previous month-by-month reports, and add up all the revenues for EMM shown in each month, the total comes to just $ 9,008,423. So where did the extra $1,309,138 shown at year-end come from?
By comparing the year-to-date totals shown on the monthly statements, one can trace the discrepancy to the July statement. As of the end of June 2010, EMM revenues year-to-date totaled $4,831,285. Revenues shown as received in July 2010 are $1,147,900. So the year-to-date total through the end of July should have been the sum of those two figures:
EMM revenues through 06/30: $4,831,285
EMM revenues, month of 07/10: 1,147,900
Total, 01/01/10 to 07/31/10: $ 5,979,185
Actual figure shown for YTD: $ 7,288,322
Discrepancy between the two: $ 1,309,137
This money just "showed up" in a revised cumulative total for the first seven months, without bothering to revise any of the earlier monthly totals. The only explanation I can surmise at this time is that $1.3 million in EMM revenues were booked in January and/or February 2010, because for an unexplained reason, the statements for those two months are not available online. However, if one looks at the March 2010 statement (the first one available for 2010), one sees that the EMM revenues for that month and the year-to-date figure for EMM revenues are identical -- meaning that there had been no EMM revenues booked in January or February.
So perhaps there is an explanation -- but it is still unsettling to have to call for it, especially in light of the other irregularities in the EMM numbers from month to month. All told, there were four months (January, February, October and November) in which there were ongoing EMM expenses, but zero EMM revenues. (Is the Obama administration that slow in doling out reimbursements? Perhaps.) But there were also two months in which EMM "revenues" were negative: $163,945 in June, and $889,929 in September. Did ECUSA really have to pay back so much money to the government in those months? (Or did Obama's checks bounce?) If so, what is wrong with the EMM billing program, and why was EMM itself running into ECUSA's reserves to the tune of $3.3 million last year? (In previous years, it ran a small deficit -- probably due to a time lag in receipts versus expenses -- but 2010's is the largest deficit by far.)
There is a similar unexplained discrepancy in the line item for "Other Income." (Since no such income is budgeted, its nature is also a mystery.) The month-to-month totals for this item equal $157,117 -- but the final year-to-date figure shown is $295,972. It certainly must be nice when you can make money simply grow like that, out of thin air, just like the Federal Reserve.
(For anyone who wants to do further spade work, email me and I will send you the spreadsheet I have constructed combining all of the monthly figures.)
[UPDATE 02/09/2011: I have confirmed with ECUSA's Finance Office that when amounts are adjusted for any past month, they do not revise or update the online version previously posted for that month -- they simply update the figures in all the statements from that point forward. So that is why the cumulative totals do not match the year-end figures -- they are not really "cumulative", but represent the information known only as of the end of that particular month.]
All in all, the figures present an unsettling picture. They show an institution which puts litigation and discipline expenses (wasn't all that money spent on +Bennison's trial and appeal worth it?) above church and mission, and which relies heavily on government subsidies for operating capital -- but which latter sums did not materialize last year, and instead turned into a financial drain. And what is perhaps worst of all, they show a sharp drop in diocesan contributions toward the end of the year:
Budgeted contributions from dioceses (12/10): $2,361,500
Actual contributions received, December 2010: $1,394,561
Shortfall in expected contributions for 12/2010: $966,939
Shortfall in expected contributions for all 2010: $1,203,448
This shortfall was only slightly offset by a surplus of $216,412 in budgeted investment income for the year. Most of the rest of the operating "surplus" was achieved by cutting way back on budgeted expenses.
A final thing to note is in the budget category called "Finance", whose major component is "Debt Financing and Repayment." There were some months in 2010 for which no amounts at all were recorded in the latter category (e.g., July and October), but in December 2010 the monthly amount skyrocketed from a previous average of about $143,500 to $668,476 -- nearly five times as much. Perhaps this was in connection with the new mortgage taken out, as discussed in this previous post.
The audited statements for 2010 will not be out for a few more months yet. (One hopes that they would clear up the current discrepancies, but unfortunately, they are presented in an entirely different format.) Meanwhile, no minutes are posted on ECUSA's website of the Audit Committee, or even of the Executive Council, so there is no way to tell who is minding the store. (Canon Harris, if you read this, I hope you can get someone at 815 to respond.)
The year-end decline in diocesan contributions mirrors what I know from my own experience in pledges received at the parish level. 2011 will not be a banner year for church contributions. But if any adjustments are due in ECUSA's finances as a consequence, those of us in the pews will be the last ones to know.