Saturday, December 15, 2007

Show Me The Money (Part 2)

Part 1 of the series appears here

The triennial budget approved by the 2006 General Convention (GC) allocated some $49,458,711 in expenses. Not bad for a church with an ASA below 600,000. That's about $82 per average attendee.

The budget as approved by the GC included $35,000 per year for the chancellor (the Presiding Bishop's (PB) legal advisor) and $100,000 per year for “Title IV Investigation & Trials"(Title IV) (this is the estimated cost of finding out about and punishing wayward clergy). Total legal expenses allocated for 2007 were $135,000. As a percent of budget legal fees and expenses were 0.3% of the total budget.

In March of 2007, the Executive Council (EC) met and revised the 2007 budget. Title IV expenses were increased to $300,000 for 2007. No breakout was given for the Chancellor, but the category under which he is paid (Office of the Presiding Bishop) was reduced from $1,673,113 to $1,636,999 for a total savings of $36,114. That's awfully close to the Chancellor's fee listed above. Additionally, two new items appear on the EC's budget. The larger of the two is a line entitled “Property Protection for Missions” (PPM) and the amount allotted is $500,000. The smaller item is “General Corporate Legal Fees” (GCLF) and the amount shown is $362,611. Total legal expenses were $1,127,611. As a percentage of the total budget, legal expenses were 2%, for an increase over the amount budgeted by the GC of 735%.

The November monthly statement for the Episcopal Church has just come out and there are some more interesting numbers. As of November, the Episcopal Church has spent $324,482 on Title IV expenses, $540,192 on PPM and $149,133 on GCLF for a total of $1,013,807. The first two items are significantly over budget, the latter is under budget by almost 60%.

Here's where I start speculating. I believe that GCLF represents what 815 thought they would have to pay Goodwin Procter based upon Mr Beers hourly rates. Mr Beers is no longer a partner at Goodwin Procter and does not have to meet any billing expectations any more. When the two spokes models for the EC said they were getting “extraordinary value” for their money, I believe this is what they were referring to. Mr Beers is billing far less than what the EC had budgeted. He's contributing some or all of his legal expertise to the church. I really hope they appreciate what a gift that is.

However, the year is not over yet and since the books were closed on November, San Joaquin has left the church. It doesn't take a rocket scientist to see there are significant Title IV and PPM expenses that are about to be incurred.

Where is the money coming from? Apparently from the rest of the budget. Total expenses budgeted for the past 11 months should have been $47,615,973. Actual expenses have been $44,876,267, leaving $ 3,688,370. These savings are coming from just about every department and program. By comparison, this time last year 815 was $1,156,760 under budget. 815 has tightened its belt and I think they're accumulating a war chest.

To be continued

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