Our 2003 audit, included in full after this brief article, has once again affirmed that faithful financial stewardship is a top priority for the Headquarters administrators and financial staff. As our auditors (Maginnis, Knechtel & McIntyre Certified Public Accountants and Consultants) reported: “In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Living Church of God in the United States of America as of December 31, 2003 and 2002, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.”
The 2003 audit, reproduced below [see PDF], documents Living Church of God corporate activities in a year that saw many transitions. After months of planning and preparation, the Work in 2003 moved its Headquarters operations from San Diego, California to Charlotte, North Carolina. As you may remember from the 2003 “Behind the Work” video, shown at the Feast of Tabernacles, it was a major project. We moved more than 60 tons of office furniture, equipment and supplies, while more than 30 employees and their families also relocated their households, moving tons of personal effects more than 2,400 miles across the country. As part of upgrading our new 38,000-square foot Headquarters facility to better meet our needs, we built an in-house television studio, which served us well for the 2003–2004 Tomorrow’s World broadcasting season.
How was this significant move made possible? As Mr. Meredith has previously mentioned, it was due to the generous offerings of the brethren. Without the tremendous generosity of Mr. Earl Jorgenson, who willed his estate to the Church in 2002, the move would not have been possible in 2003. Other especially generous givers, such as Mrs. Olga Bennett and Mrs. Laura Webster, also played a vital role in helping the Work make this major move forward. We thank God for all His people who support His Work with their hearts and minds, and we are deeply grateful for those who have been especially blessed financially and can remember the Work in their wills as a final legacy of love and service.
Because of these especially generous donations in 2002, you will notice one major decrease in funds between 2002 and 2003. In 2002, the category of “estate donations and other revenue” totaled almost $1.1 million. In 2003, that figure dropped to $144,443.
As a result, total income in 2003 was down by $357,248 (or 3.8 percent) compared to 2002. However, in 2003 our “regular income”—tithes, donations and Holy Day offerings—increased by 7.2 percent over 2002. In other words, God is responding to our prayers, and is sending more “laborers into His harvest” (Matthew 9:38) to support the Work financially
You will also notice that our total assets in 2003 (see page 2 of the audit) were lower than in 2002. As was reported in the March-April Living Church News (“2003 Year-End Financial Report,” pp. 16–17), this occurred because we chose to pay off our relocation costs in 2003, carrying no unsecured debt into 2004.
However, thanks to increased property valuations (reflected in Note 5 at the top of page 11, but not in the figures at the bottom of page 10), our equity in the Headquarters building has more than doubled in the last year! Of the three appraisal figures we received, $2.718 million is the lowest, and does not reflect building improvements made since the assessment, but even this conservative figure represents a major blessing for the Work.
Remember, too, that in San Diego we were paying $26,000 monthly rent for 14,906 square feet of facilities. Now, our monthly mortgage payments are below $10,000 for 38,000 square feet! Of course, we also set aside funds for maintenance of the building and the property, but our net saving is substantial.
Another blessing is that North Carolina reimburses sales tax paid by the Church. Sales tax reimbursements are included on page 2 of the audit, under “Current Assets: Receivables (Note 3).” These “receivables” were just recently (in 2004) refunded to the Work, so we have already begun to experience this benefit of the move.
God expects us all to be faithful in the responsibilities He has given us. In Luke 12:42, Jesus said: “Who then is that faithful and wise steward, whom his master will make ruler over his household, to give them their portion of food in due season? Blessed is that servant whom his master will find so doing when he comes.” We should all take our responsibilities—including financial accountability—very seriously. The Work is constantly striving to adhere to strict internal accounting controls and principles. Our accounting firm has affirmed this with our 2003 audit. But let us also strive as individual stewards of God’s blessing to be faithful, even with our personal finances.
Accounting firms are now operating under stricter standards than before, both for themselves and for the corporations they audit. The Sarbanes-Oxley Act of 2002, a newly enacted federal law in the United States, has put “new teeth” into fiscal reporting and enforcement, and requires that auditing firms evaluate how effective a financial department’s internal controls really are. Business activities are being held to greater accountability standards than in years past, thanks in large part to widespread corporate financial scandals. As the May 2004 issue of Journal of Accountancy reported: “The Sarbanes-Oxley Act of 2002 has ushered in a new era of reporting accountabilities for public companies. It requires management of such entities to certify the effectiveness of the internal controls that are the underpinning of financial reporting and a main tenet of the law is that auditors must [also] avoid conflicts of interest [with companies they audit]” (p. 55).
The Work, under Mr. Meredith’s careful direction, has diligently endeavored to capitalize on the benefits of owning our own Headquarters building in Charlotte, North Carolina. The Headquarters team is continually taking steps to improve our infrastructure, methods of operation and efficiency, as we prepare to go through more open doors to preach the gospel in the months and years ahead. Thank you for your prayers and support, as we anticipate being able to do the Work even more powerfully in 2004 and 2005, with God’s continuing guidance and blessing!