As a protection to the officers and to those responsible for the handling of monies in denominational service, as well as to the organizations themselves, a system of auditing and checking of accounts has been instituted throughout the world field. This plan provides that the conference treasurer shall have charge of the auditing of the records of the local churches in his territory, although he. is not always able to accomplish all of this work personally; and the church boards of some of the larger churches appoint their own auditors.
The union conference elects an auditor, frequently the union treasurer, who is responsible for checking the accounts of the local conferences in its territory and the institutions and other organizations controlled or supervised by them. In current practice, although not fully in harmony with a consistent auditing plan, the union auditor also verifies the accounts of union and interunion institutions within his territory.
Each division of the General Conference has an auditor, usually the division treasurer, who audits the books of union missions and institutions within its confines, and supervises the accounting in that field. The General Conference auditing department examines the accounts and books of the General Conference headquarters and institutions, the major divisions throughout the world, the union conferences in North America, and the general or larger institutions which serve the territory of several unions. In addition to verifying accounts and statements, the auditors generally serve as counselors in unifying accounting and financial methods, and in rendering such assistance and advice to the treasurers as they are capable of giving.
Technically, the auditor is responsible directly to the constituency or board that elects him. His duty is to verify the transactions and practices of the conferences and institutions under, his charge with the actions and policies that have been formulated for their financial guidance, calling attention to points of departure. He is often freer to do this if he has no responsibility as a member of the committees or boards of the organizations which he audits.
The General Conference endeavors to operate its entire work at home and abroad on a cash basis. It is therefore necessary to follow some system that will ensure the utmost safety and efficiency to this end. Experience has proved that the budget plan is capable of meeting the need. A budget is an estimate in advance of the expenditures of an enterprise and the probable income that will be available to meet these disbursements.
Especially in its mission territory has the General Conference found the budget system a necessary adjunct to its financing. During the early part of each year, every station and institution in a mission field is directed to prepare a list of its contemplated expenditures for the next annual period, givino- in detail the salaries that are to be allowed and the probable traveling and other expenses that will be incurred. Any additions for increased allowances to workers, advance moves, or new improvements, are noted. Income that may be expected in the field the next year is also reported.
These budgets of needs from the local stations are gathered and carefully reviewed by the local mission officers or committee and, together with further administration expenses and other estimates of the mission itself, they are forwarded to the union mission headquarters. Here they are again reviewed and adjusted by the controlling committee. The budgets from the union missions, which include the estimates from all the organizations in their territories, are collected in the division office. After necessary adjustments, the division places its own administrative budget with these reports, and forwards the entire estimate of requirements for its territory to the General Conference office. At general headquarters, the budgets from all the divisions and from other organizations needing assistance are summarized for presentation at the Autumn Council of the General Conference Committee.
For convenience in study and adoption, the budgets for mission operations are classified into the following groups in the order of their probable urgency:
Class I-A The actual cost of operating present work.
Class I-B Increased expenses of carrying present work, such as increases in salaries, travel, etc.
Class II The cost of new workers.
Class III New equipment and facilities, aside from land and buildings,
Class IV Estimated cost of land and buildings.
At the Autumn Council, when representatives are present from the mission divisions, the budgets for the world field are given careful study by special committees appointed for that purpose. Appropriations as far as prospective funds will permit are voted by the council to cover all requirements for the following year.
Through the years, the General Conference has established base appropriations for the divisions, which purport to cover the essential needs of the fields on more or less of a proportionate basis. The divisions try to formulate the budgets for the organizations within their territory to come within these base allowances. If this cannot he done, or if special needs arise, the General Conference endeavors to provide for such contingencies by extra appropriations or allowances.
Whenever funds are available for an increase in the bases of all the divisions, there is general rejoicing that the work can advance more rapidly or that the workers can be better provided for. If, on the other hand, it is necessary to reduce the general field bases,—as has sometimes been the case in recent years,—each division committee has to revise its own budget and those of organizations within its territory. This may mean the reduction of salaries or the curtailing of plans for administering essential interests. Such a condition often calls for careful reviews and anxious, prayerful study on the part of division, union, and local mission committees. It is to the credit of the financing system and the strenuous efforts of those administering it, as well as to the faithful cooperation of all the workers concerned, that progress has continued in mission endeavor around the world in spite of decreased appropriations and the chaotic economic conditions through which the world has recently been passing.
The Plan in Operation
After appropriations have been voted, the General Conference treasury department undertakes to make available each month the proportionate amount of funds allowed to each field. As a large part of the current mission receipts of the General Conference does not .reach its office until late in the year, it is often necessary for the treasurer to draw on reserve or surplus funds to make his monthly remittances. To provide for this exigency and to tide the General Conference over possible financial depressions, the Bylaws require that the General Conference treasurer shall carry a reserve fund equal to one fourth of the regular appropriations for the year, in addition to working surpluses.
Provision is also made in the General Conference working policy for each division to carry a working capital of fifteen percent of its annual administrative expense and ten per cent of the amount voted by the division to its respective organizations for Class I appropriations. The union and local missions are each allowed to carry a working capital of fifteen percent of their annual operating expenses. As practically all funds in the mission fields, except the local tithe, are considered General Conference funds, accumulation of surpluses and operating balances above the authorized working capitals are reverted to the union and division treasuries for redistribution or for requisition by the General Conference, should the need arise.
A problem in connection with the mission budgets which has been extremely perplexing in recent years is the question of money exchange. The currency exchange rates of certain countries have been erratic, and money values uncertain. To help in eliminating the influence of these fluctuations and to furnish a reasonable basis for calculating financial positions, the General Conference has established standard rates of exchange with all the countries with which it has contact, on the basis of which funds are remitted and business is transacted. Gains in exchange above the standard rates have reverted to the General Conference to assist in meeting exchange losses in less-fortunate countries, and to apply on the annual budgets which have been in need of extra accessions from some source.
The budget plan, although followed in part, has not been so easy to establish in conferences and institutions in North America where the organizations are largely on a self-supporting basis. However, those local and union conferences and institutions which have adopted definite budget systems and instituted adequate controls of frequent operating comparisons, have found their outcome more satisfactory in the financial stringency of the country during recent years.
The Seventh-day Adventist financial system has so far proved adequate for the strain that has been placed upon it. Its basic features, notably the tithing' plan and the sacrificial spirit of its members in their enthusiastic support of missions, have excited the admiration of many religious leaders throughout the world. Faithfulness in the business relations of the cause of God will meet His approval equally with faithfulness in other phases of His service.