From the Worldwide Faith News archives www.wfn.org
Dramatic Changes in Budget Building Mandated
04 May 1996 20:36:38
95457 Dramatic Changes in Budget Building Mandated
by New Federal Regulations
by Jerry L. Van Marter
LOUISVILLE, Ky.--The way General Assembly budgets are constructed will
change dramatically beginning this year as a result of new federal
regulations, according to Presbyterian Church (U.S.A.) financial officials.
Corporate and Administrative Services (CAS) controller Nagy Tawfik
told the CAS committee at its Dec. 7-9 meeting here that the changes in
Financial Accounting Standards Bureau (FASB) regulations mean "a complete
reversal of current practice."
According to Tawfik, the new regulations for non-profit corporations
require that restricted funds be applied to incurred expenses before
unrestricted income may be used to pay them.
Currently, all unrestricted income is applied to General Assembly
mission budget items, and then the budgets are filled in with restricted
funds. "Historically we have managed restricted funds to stretch out
support for programs over as many years as possible," Tawfik said.
No more. All applicable restricted funds must be spent first,
beginning with 1995 expenses. The effect, said Tawfik, is that some $60
million in accumulated income derived from restricted gifts to the General
Assembly will have to be spent much quicker than is currently the practice.
CAS officials estimate that the impact of the accelerated spending
down of restricted reserves under the new FASB regulations will begin to be
felt in 1997, with the full financial crunch hitting in 1998. General
Assembly Council executive director the Rev. James D. Brown described 1998
as "a watershed year."
Restricted giving to the General Assembly continues to rise, but
unrestricted giving is on a downward trend of about a five percent decline
For more information contact Presbyterian News Service
Presbyterian Church (U.S.A.), Louisville, KY 40202
phone 502-569-5504 fax 502-569-8073
E-mail PCUSA.NEWS@pcusa.org Web page: http://www.pcusa.org
Browse month . . .
Browse month (sort by Source) . . .
Advanced Search & Browse . . .