LCN Article
Audit Report 2004: The Work Moves Ahead

July / August 2005

J. Davy Crockett III

In many of the parables Jesus Christ gave, He used the proper handling of money to teach spiritual lessons. The parable of the talents (Matthew 25:14–30), the lost coin (Luke 15:8–10), the unjust steward (Luke 16:1–13) and others, all reveal vital spiritual lessons and principles.

The Old and New Testaments discuss the use of money in doing the Work of the Lord (Exodus 35; 28:21–31; Nehemiah 7; 2 Chronicles 34:8–13). We in the Living Church of God try very carefully to be good stewards of the financial resources that God gives us through the tithes and offerings of our members, and the donations made by co-workers and donors (1 Corinthians 4:2).

Our team here in Charlotte, our ministers and our regional offices around the world are constantly evaluating our processes, looking for ways to save time and money and improve our quality of service. Headquarters' move to Charlotte in 2003 is already reaping many benefits of service and cost savings for the Work. We constantly evaluate new technologies that help us serve growing numbers of people (both in preaching the Gospel and "feeding the flock") and control administrative costs. For example, in this last year the Mai l Processing Department acquired a new inserter, which can handle up to 5,000 pieces of mail per hour, thus saving many hours of labor. We are also working on bar code technology that can speed the processing of tithes and offerings, and can help us better manage our inventory.

We recently underwent our annual audit, and we have received the auditors' detailed report, which is reprinted here for your review and consideration. The accounting firm of Maginnis, Knechtel and McIntyre, LLP has given the Church a fair and objective audit, stating that it was done "in accordance with auditing standards generally accepted in the United States of America." The auditors concluded: "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 USA as of December 31, 2004." You will notice that page 1 of the audit describes us as a "California" corporation. This is correct, as we were operating as a California corporation before becoming a North Carolina corporation as of June 30, 2005.

What do the numbers reveal? The results and trends are very encouraging. Overall income for 2004 increased by 7.2 percent—a healthy increase in these uncertain economic times. Notably, this increase was the result of tithes and offerings, not large donations or bequests from estates. It is also exciting to see that our co-worker growth is up 14 percent from a year ago.

How were the funds used in the Work? The amount spent for "Feeding the Flock"—including support for local congregations and assistance to the needy—amounted to 51.4 percent of total income. Very importantly, the amount spent on "Preaching the Gospel" was 41.5 percent. This figure is growing as we add more media outlets.

It is important that we control our administrative costs wisely. In 2004, we were actually able to reduce the administrative expenses of Headquarters operation by 1.6 percent, to 7.1 percent in 2004.

Having a healthy growth in income allows us to do more in getting out the "good news." For example, the Tomorrow's World magazine circulation is up to 273,000, a growth of 38 percent over last year. As of the September- October 2005 issue, more than 5 million copies will have been sent around the world since the first issue was mailed in May 1999.

The Tomorrow's World telecast brought in 57,000 responses from January 2005 to mid-June. This is a 27 percent increase over the same period last year. On July 19, we passed the 500,000 mark for responses in the United States and Canada since January 1999.

The Tomorrow's World telecast is now carried on more than 170 television stations and that list is growing. In North America the telecast has reached approximately seven million households, or 6 percent of all television households in the United States and Canada. We have a long way to go, but we are on our way.

The telecast is now being aired on two satellites over the United Kingdom, Europe, Africa and the Middle East. These two satellites have the potential of reaching 44 million households, including 14 million in the United Kingdom and another 30 million in the Mediterranean and European areas.

While television in the United Kingdom is getting the tiniest of starts, it is poised for growth. In the first 11 weeks of airing the telecast, we received more than 1,000 responses. The Inspiration Network is new to the United Kingdom so the start-up is relatively slow. However we expect advertising to the United Kingdom and European audiences to boost the number of viewers rapidly.

Another exciting development is the opportunity to reach approximately 4.5 million Reader's Digest subscribers whose August 2005 issue will contain an advertisement for our booklet, Revelation: The Mystery Unveiled!, and will also offer a subscription to the Tomorrow's World magazine. The Work was able to obtain this advertising space at a greatly reduced rate, which comes out to approximately 1.02 cents per subscriber reached!

Even though our primary mission is to preach the Gospel and to warn this world of what lies ahead before the return of Jesus Christ, we are very happy when the body of baptized believers grows in number. More than 900 people have been baptized in the United States and Canada since the Living Church of God started. In the past four years, baptisms in North America have increased by 26 percent per year.

To better serve our local congregations, we have been able to add a number of ministerial trainees to more effectively meet the needs of our members.

Another milestone was reached this year with the production of our own hymnal. This was an expensive but very important project that was fully funded by a special offering in 2004, to which the brethren responded generously.

These are exciting developments made possible by God's blessing and the generous support from all of you. Thank you for your prayers, your interest and concern, and for your continued financial support of this very important Work.