wfn.org | [PCUSANEWS] PC(USA) receives 'clean' audit

[PCUSA NEWS <PCUSA.NEWS@ECUNET.ORG>]

Note #8734 from PCUSA NEWS to PRESBYNEWS:

05265
May 17, 2005

PC(USA) receives 'clean' audit

Adjustments to 2003 asset statements won't affect church programs

by Jerry L. Van Marter

LOUISVILLE ? The Presbyterian Church (U.S.A.) has received an "unqualified
opinion" on its 2004 financial statements ? the highest rating auditors can
bestow.

	  John Detterick, executive director of the General Assembly Council
(GAC), said after getting word of the "clean" audit: "Presbyterians expect
good stewardship in their organizations, which reflects the highest integrity
in business practices. It gives me a great sense of satisfaction, and a
grateful heart, to see that our handling of gifts for Christ's service has
received a high independent rating."

	  At the same time, the independent auditing firm of Crowe Chizek and
Company  found that three groups of assets had been mistakenly included in
the denomination's 2003 financial statements, so the financial records for
that year were "restated."

	  The auditors discovered that the assets ? the Jarvie Commonweal
Fund, valued at $95.8 million; three outside trusts valued at $7.9 million;
and the PC(USA)'s fine arts and historical materials collections, valued at
$8.7 million ? had been recorded on the books of both the PC(USA), A
Corporation and the Presbyterian Church (USA) Foundation.

	  The three groups of assets should appear on the foundation's books,
the auditors advised.

	   The $112.4-million "restatement" does not affect funding or cash
flow for church programs, said PC(USA) Chief Financial Officer Joey Bailey.
"The impact is felt as a reduction of assets for the church corporation," he
said, "but since these assets should not have been on the church
corporation's financial statements, there is no tangible impact."

	  Because there was no benefit derived from listing the assets
incorrectly, Bailey added, "there will be no loss as a result of the
adjustment to the 2003 financials." Crowe Chizek agreed, deeming the
adjustments "appropriate" and "properly applied."

	  The Jarvie Commonweal Fund is a non-profit corporation established
in 1925 to provide services to the elderly in the New York City area. The
original corporation was dissolved and its assets transferred to the Board of
National Missions (BNM) of the former United Presbyterian Church in the
United States of America. When the BNM was dissolved and its corporation
absorbed by the foundation, the Jarvie assets were recorded in both the
foundation's and PC(USA)'s books. The foundation continues to administer the
Jarvie endowment.

	  Third parties hold the outside trusts. The foundation also
administers these trusts, so they were mistakenly included in the PC(USA)
financial statements prior to the "restatement."

	  The church's fine arts and historical collections ? which include
papers and books that are unique and irreplaceable as well as communion ware
and tokens, paintings, sculptures and artifacts, all housed primarily at the
Department of History in Philadelphia ? were added as an asset to the
church's books in 1995, in accordance with new Financial Accounting Standards
Board (FASB) standards.

	  Bailey said PC(USA) financial managers decided that the inclusion
of the collections in the financial statements was not appropriate, because
"these assets are not being held for resale."

	  He also praised Crowe Chizek. "While performing their first audit
for the church, they have done an outstanding job," he said. "I'm grateful
for their work."

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