PRESBYTERIAN FINANCES

Press, Volume XCIII, Issue 27876, 26 January 1956, Page 10

PRESBYTERIAN FINANCES

OVER EXPENDITURE ON BUDGET

PROTECTION SCHEME FOR SEPARATE FUNDS

A new system of finance for the Presbyterian Church of New Zealand, which has at times over-spent its budget receipts by more than £60,000, and has made up the deficit from other funds, has been recommended by the trustees of the church. A report by the convener of the finance committee of the General Assembly (Mr Edward Moore) said that trustees are of the opinion that a general purposes fund of £lOO,OOO would’ guarantee the investments or advances made by them and would protect funds whose moneys were borrowed or advanced to other funds at interest. The report was published yesterday I in “Outlook,” the church’s official journal.

Mr Moore said in his report that church revenue came from budget receipts, interest on trust funds, and legacies, anti by using all or any of them it was rarely that the church bank account was overdrawn. Interest was always credited to particular funds of accounts whose money was used in this manner.

As payments had to be made regularly right through the year for the various objects for which budget funds were required, and as budget receipts were received neither regularly nor promptly, temporary advantage had been taken of other revenue as it became available, trust and otherwise to keep up prompt payments throughout the year. “This practice has been in operation •down the years and was accepted as being m order until the position was brought to the notice of the trustees more forcibly when, by the authority of the assembly, advances were made in a similar manner to the spending committees in anticipation of receipts from new life funds; and at one time borrowing by these committees reached to more than £90,000 in excess of new life revenue.” Mr Moore says.

Legal Opinion “Legal opinion was obtained from one leading counsel and verbally confirmed by another that the trustees had in this method of financing acted ultra vires and consequently we are placed m the position that legally we c 7 n fi nue to finance the dffairs of the church in this manner. This opinion refers to our general transactions as well as to such payments to .“ e wor k. The amount owing by this is now reduced to £ 10,000. Consequently we must now aim to have all such advances liquidated at the earliest possible moment. “This whole position has come about because we have no capital funds such aS uf business or a company has, and without this, according to the strict legal opinion received, we cannot continue to make such payments for salaries and other outgoings which call ror regular payments unless we have fbe .cash available to meet the cheques. There have been times in the year when our budget receipts have been over-spent by as much as £69,000 or even more.

The whole matter has been discussed with the assembly finance committee, whose members agree that we have no alternative but to recommend the establishment of a general purposes fund sufficiently large to meet

at any time any advances which the assembly has authorised or may wish to authorise. This fund would guarantee the investments or advances made by the trustees on the instructions of the assembly and would protect funds whose moneys were borrowed or advanced to other funds at interest,” Mr Moore says. Mr Moore said that recently the trustees had received from four estates payment on account of legacies which had been left for the general purposes of toe church. They amounted to £61,915 Ils 9d and were made up as follows: _ x £\ s d Estates J. T. and F. G. Bowie .. 57,578 16 0 Estate M. H. Conway .. 1,464 10 5 Estate M. J. McLean .. 434 16 9 Estate G. Sykes .. 588 9 0 Interest .. .. 1.848 19 7 £61,915 11 9 “The trustees are of the opinion that a fund of at least £lOO.OOO will be necessary and recommend that a general purposes fund be established; that the amounst so far received totalling £61.915 Us 9d. as outlined in toe report, be credited to toe fund; that all future legacies left to the church without restriction as to their use be credited to the fund; and that the fund be allowed to accumulate until it reaches the sum of £100,000,” Mr Moore says.