1. Quarterly reportback on Diocesan Finances
Saturday 1st October 2016
AGENDA
Welcome  
Financial position – 2015 audit and first 8 months of 2016
Taxation update 
Clergy remuneration adjustments for 2017 and budget guidelines
New procedures for monthly debits when insufficient funds available
General
Close

2. Quarterly reportback on Diocesan Finances
Saturday 1st October 2016
AGENDA
Welcome  
Financial position – 2015 and first 8 months of 2016
Taxation update 
Clergy remuneration adjustments for 2017 and budget guidelines
New procedures for monthly debits when insufficient funds available
General
Close

3. 12 months to 31 December (in Rand)
DFB in 2015
12 months to 31 December (in Rand)
Income
2015
2014
Difference
Parish contributions
Parishes without clergy
Special appeals
Tax benefit sharing ( )
Other income
TOTAL INCOME
14.0%
Expenses
Ministry
Administration
Payment to Capetown (Province)
Post-retirement costs
Training
55 013
Other
TOTAL EXPENSES
4.5%
Operating deficit
Less interest paid
Tax reversed - prior years
NET LOSS AFTER TAX

4. Combined DFB and Trustees
2015
DFB
Trustees
Total HQ
Income
Operating expenses
Operating deficit
Less interest paid
Add tax provision not needed
Net deficit
2014
DFB
Trustees
Total HQ
Income
Operating expenses
Operating deficit
Less interest paid
Tax -
Net deficit

5. Conclusions regarding 2015
DFB reduced its loss from R1.4 million in 2014 to R0.7 million in 2015 – GOOD
Trustees increased their loss from R0.6m in 2014 to R1m in 2015 – NOT GOOD
Interest paid by HQ rose from R0.9 m to R1.2 million between 2014 and 2015 because of additional losses racked up by both DFB and Trustees, plus delays in recovering tax from parishes. NOT GOOD
DFB Income rose far faster (14.5%) than expenses (4.5%) in 2015, enabling the reduction in the deficit. Particularly helpful were the additional contributions of R12,000 per parish and tax benefit sharing between parishes and DFB. GOOD – but not enough to eliminate the deficit for 2015.
There is way too much debt in the Diocese: Interest servicing costs of R1.2 million for HQ alone need to be reduced by paying off debt. That was an objective set for 2016 – so how have we done thus far? (See next slides)

6. 2016 Diocesan Finance Board results
8 months to 31 Aug 2016 (in Rand)
Income
Actual
Budget
Difference
Parish contributions
Parishes without clergy
Payroll levy
36 008
Other income
TOTAL INCOME (a)
Expenses
Ministry
Administration
Payment to Capetown (Province)
Post-retirement costs
Training
Other
58 960
68 000
9 040
TOTAL OPERATING EXPENSES (b)
Operating surplus (a) – (b)
Less interest paid
Less tax provision
9 433
NET SURPLUS AFTER TAX

7. 2016 DIOCESAN TRUSTEES RESULTS 8 months to 31st August 2016 (in Rand)
Income
Operating expenses
Operating surplus
Less interest paid
Net loss

8. Combined DFB and Trustees Results for 8 months to 31 August 2016
Total Head Office
Income
Operating expenses
Operating surplus
Less interest paid
Less tax provision
Net surplus / deficit
Without debt, there would have been R854,335 more to spend on ministry in 8 months

9. Conclusions regarding Jan – Aug 2016
DFB surplus (as planned) is good news, helped by not having to pay a Diocesan Secretary and by donations from organisations. Result was hindered by parishes that ignored the decision to pay 10% of their income to the Diocese in 2016 (Negative impact: R224,000). The R600,000 surplus achieved by DFB decreased the debt by this amount. GOOD NEWS
Trustees’ operating surplus of R256,000 became an overall loss of R189,000 because of R445,000 interest burden. Their debt increased. BAD NEWS
Combined HQ result for 8 months was a surplus of R467,000 compared to a loss of R1.7 million in 2015 and a loss of R2 million in GOOD NEWS
Warning: We do not yet have a grip on the extent to which any of the R19 million borrowings from the DFB (via the Deposit Fund) may turn out to be irrecoverable, necessitating a provision for bad debt as an hitherto unbudgeted expense. WORRYING
Things are going in the right direction – but the pace needs to increase.

10. Quarterly reportback on Diocesan Finances
Saturday 1st October 2016
AGENDA
Welcome  
Financial position – 2015 audit and first 8 months of 2016
Taxation update 
Clergy remuneration adjustments for 2017 and budget guidelines
New procedures for monthly debits when insufficient funds available
General
Close

11. Taxation of commercial income
R3.8 million paid to SARS at end of July for 2009 – Now up to date.
Most parishes have refunded the Diocese their equitable share – some disputes still need to be ironed out.
2015 tax being calculated now for payment in December Aim to advise parishes ahead of then of how much each owes, so that errors and disputes can be dealt with before submission to SARS. Parishes will have to pay the Diocese in early December 2016.
All parishes MUST provide for tax in both the 2016 financial statements and in 2017 budgets – suggest a simple 28% of net profit from trading activities.
Where a Rectory is rented out and a parish pays for priest’s accommodation, the cost of that accommodation can be deducted as an expense – reduces tax. All deductible expenses must be clearly stated in the financial statements.
All parishes with taxable income need to pay tax – claims of being unable to pay because of being poor are not accepted by SARS. Budget to use only 72% of trading income to fund the parish (100% less 28% tax = 72% to spend)

12. Quarterly reportback on Diocesan Finances
Saturday 1st October 2016
AGENDA
Welcome  
Financial position – 2015 audit and first 8 months of 2016
Taxation update 
Clergy remuneration adjustments for 2017 and budget guidelines
New procedures for monthly debits when insufficient funds available
General
Close

13. Important notes about allowances on next slide
Stipends for 2017
Set portion
2017
Increase
2016
Per Month
Per Year
Pensionable stipend R R
8.7% R
Pension Fund Parish Contribution - 39% of Stipend (36% in 2015)
R 5 265 R
21.1% R
Estimated Medical Aid for married couple - no children
R 4 200 R
10.8% R
Estimated Contribution to Post Retirement Medical Aid
R 6 100 R
10.9% R
U.I.F Parish Portion
R 149
R 1 788
0.2%
R 1 785
Group Life Benefit
R 80
R 960
0.0%
Group Personal Accident
R 280
Total Cost to Parish of set portion R R
11.4% R
Parish Allowances (Recommended)
Housing allowance
R 3 950 R
Car Allowance to cover all costs
R 4 500 R
Parish reimbursive allowances - to be paid against receipt of Vouchers
Retreat Cost
R 3 500
Books
R 2 500
Vestments
Communication: Landline, cellphone, Internet
Important notes about allowances on next slide

14. Stipends and Allowances 2017
Medical aid: Contribution rates for 2017 not yet known, so the figures given are estimates only (both for current and post-retirement)
Medical aid: Actual medical aid expense per parish will depend on how many dependants the clergy person has. Table illustrates a single dependant (spouse) only
Increases in “Additional allowances” to be capped at 7%.
No increases in “Additional allowances” are permitted where a parish has any of the following: budgeted deficit for 2017, an accumulated deficit, unapproved borrowings from the Deposit Fund or loans from the DFB.

15. Budget guidelines for 2017
Contributions to Diocese to be a minimum of 10% of total income. Fund parish operations out of 90% of total income.
Parishes that have historically paid more than 10% are requested to continue.
Budget to spend no more than 72% of any net taxable trading income. Set the remaining 28% aside to pay tax in due course. No nasty surprises.
Stipends and allowances were approved by Trustees on 22 September 2016
Insurance premiums for 2017 not known at this stage – awaiting Joint Insurance Fund.

16. Quarterly reportback on Diocesan Finances
Saturday 1st October 2016
AGENDA
Welcome  
Financial position – 2015 audit and first 8 months of 2016
Taxation update 
Clergy remuneration adjustments for 2017 and budget guidelines
New procedures for monthly debits when insufficient funds available
General
Close

17. New procedures for monthly debits when insufficient funds available
When the payroll is closed, the office will send an to parishes advising them of the total amount that will be debited to their bank account and advising them of the date of the debit
Parishes are expected to ensure that sufficient funds are available on the day of the debit to cover the amount of the debit
Should a parish not be in a position to meet the debit, they should immediately advise the office together with details of what plans they have to ensure that the debit is paid in full.
If they are not in a position to repay the letter in full by the end of the month, the amount required to eliminate the overdraft will be regarded as an unauthorised loan.
The parish will be required to formally request condonation from the Diocesan Finance Board of the unauthorised loan. The formal request should be accompanied by a copy of the latest monthly accounts of the parish together with a detailed plan as to how the parish will repay the loan together with any arrears on previous unauthorised loans