The 2008/09 budget represents a break from the past, with an expectation of both lower costs and significantly higher non-levy income. This will enable a major reduction in Assembly Assessment of 22 percent, bringing the average levy on assessable parish income to under 10 percent.
The full extent of this turn-around in Assembly finance is obscured by the high proportion of funds collected through Assembly Assessment that are used to meet the parishes’ contribution to the ministers’ Beneficiary Fund. Excluding this component, the level of funding from Assembly Assessment to meet Assembly’s operations has fallen 34 percent from $2.4 million to $1.6 million.
The reduction in Assembly Assessment in 2008/09 by 22 percent follows a 14 percent reduction in the current year, and a 5 percent cut in 2006/07. In this budget, Assembly Assessment equates to an average 9.5 percent of assessable parish income, compared to 11.4 percent in the current year. This means the Council of Assembly will meet its recently adopted medium-term target for Assembly Assessment in just one year. Parishes in 2008/09 will pay in a range of between 7.75 percent and 13.75 percent, reflecting the effect of the membership component on the levy.
The reduction in Assembly Assessment will be particularly welcome because it occurs in the year that parishes must meet the second tranche of an increased seniority allowance for ministers.
The favourable change in Assembly’s finances is closely related to the new model of ministry training that the church has recently adopted. The maintenance of the current low assessment in future years will depend in part on whether costs in this area continue on the present projectory.
The 2008/09 budget is a balanced budget in which it is anticipated that expenditure will match income. In the current year it is expected that there will be a significant and unbudgeted surplus due to both higher income and lower than anticipated expenditure. It is this change in Assembly finances that gives us the confidence to cut Assembly Assessment so significantly in the coming year.
Council wishes to acknowledge the efforts of the Assembly finance team and the Resource sub-committee in putting together the budget. As always, we welcome your questions and comments, which can be addressed to the Convenor of the Resource sub-committee, John Trainor, or to the Finance Manager, Brendan Sweeney.
On behalf of Council of Assembly and the Resource Sub-committee
Rhys Pearson John Trainor
Convener Council of Assembly Convener Resource Sub-Committee
Budget Format
The information below is set out in two different formats to clarify how General Assembly funds will be used during 2008/09.
Table 1 compares the budget for 2008/09 with the current year budget for key budgeted income (eg. Assembly Assessment) and expenditure items (eg. staff costs, grants paid) in a “profit and loss” statement format.
Table 2 shows the 2008/09 budget information presented by function (eg. communications, administration, School of Ministry) rather than by expenditure type (staff, travel etc).
Table 1: Comparison between 2007/08 and 2008/09
Table 2: 2008/09 budgeted income and expenditure by function ($000’s)
Key Points
Balanced budget
The 2008/09 budget is a balanced budget, with total income equal to expenditure. As with the current year budget, interest income from Presbyterian Investment Funds held by General Assembly that is not accessible for Assembly operations, have been excluded from budgeted income.
Knox Centre for Ministry and Leadership
The Knox Centre for Ministry and Leadership is in its second year of operation under the new distance learning model. Some staff and administrative costs associated with its establishment have now been incurred, allowing a reduction in 2008/09 budgeted expenditure for student training of $156,000. In addition, Knox Centre investment income increases by about $400,000 due to income on funds generated from the sale of a number of student houses in Dunedin, and by parish contributions to the training of interns.
Staff and administration costs
Salary and stipend costs for Assembly staff increases by 2 percent, which is less than current inflation. Total staff numbers remain static at the equivalent of approximately twenty-two full time people.
Other General Assembly operating costs reduce by a total of $158,000 as summarised:
Staff travel $65,000
Property expenses $16,000
Administration expenses $52,000
Miscellaneous costs $25,000
Total $158,000
Provision for Doubtful Debt
The provision for non-payment of Assembly Assessment is reduced from 12.5 percent to 10.0 percent of the levy in 2008/09. This change has resulted from a better collection level in the current year that is anticipated to continue. There has also been an increased level of payment of outstanding arrears from prior years.
2008 General Assembly
The total cost for staging the General Assembly meeting in October is budgeted at $220,000. The full cost is recovered by registration fees, included in the operating revenue budget
Spanz
Parishes have been invoiced by Assembly Office for copies of Spanz magazine made available to parishioners. As from next year, this charge will be removed and the full cost of the publication will be met either by advertising or through Assembly Assessment. The removal of the charge will reduce Assembly revenue by $25,000.
Grants and donations expense
In the 2008/09 budget chaplaincy is being restored as an area of Assembly support with a grant of $50,000. It was with regret that all support had to be curtailed a number of years ago at a time of financial stringency. It is hoped that in future Assembly finances will allow a continued level of support.
Income from Grants and Donations
2008/09 Assembly Assessment
Assembly Assessment has reduced by 22 percent ($765,000) from the level set in 2007/08. Assembly Assessment across the Church is 9.5 percent of accessible income (5.4 percent if the amount raised for the Beneficiary Fund contribution is excluded). Assessable parish income, on which the income portion of Assembly Assessment is based, fell by $2 million in 2008/09. This reflects the change introduced by General Assembly in 2006 which has, among other things, enabled parishes to exclude income raised for overseas giving and for property.
Table 3. Assembly Assessment Calculation
