In the wake of the failure of projects such as the Acacia College development at Mernda, the Synod of Victoria and Tasmania has taken a tangible step to improve its governance model with the formation of a Finance Committee (FC) to monitor and review the financial performance of the Church.
The formation of the FC – whose membership includes former and current partners of the biggest four accounting practices in the world as well as two investment bankers – is just one step that has been taken by the Synod in recent months to strengthen the financial acumen of its boards and committees.
FC chair Ben Cohen said the Property Board, Board of Mission and Resources and the Standing Committee had all strengthened their financial and business skills by adding people with financial skills relevant to an organisation of the size and complexity of the Synod.
The Standing Committee confirmed the formation of the FC at its October meeting.
It will be responsible for recommending financial policies, goals and budgets that support the mission, values and strategic financial direction of the Church as well as monitoring the Church’s financial performance against its budgets and reviewing major financial projects and programs.
The FC will not be involved in missional decisions but will calculate the financial outcomes and risks for other organs of the Church who are responsible for making missional judgements.
Mr Cohen said that over the last couple of years the audit committee had become something of a defacto finance committee given its involvement in decision making.
He said this was not a suitable arrangement as it was structurally unsound for the audit committee to be both an independent watchdog and a party to financial decision making.
“The Synod (in May) recognised there were issues around skills and governance and these are signposts that steps have been taken to address those issues,” Mr Cohen said.
Dick Carter, chairperson of UCA Funds Management and a standing committee member, said the formation of a FC was long overdue.
Mr Carter said it would reduce the likelihood of poor financial decisions being made because proposals would be subjected to the rigorous assessment from a panel whose membership was chosen solely based on their financial acumen and experience.
He said the lack of an independent and appropriately skilled committee to scrutinise proposals which could have a significant impact on the synod’s finances had represented a weakness in the governance system of the Church.
“In the past, business cases (for proposals) were not always rigorously analysed to determine if the assumptions of which they were based were valid,” he said.
“Similarly there has not been an independent assessment of the financial structure of the synod which can look beyond the current period and anticipate what might happen (in a financial sense) down the track.”
Mr Carter said most other synods already had similar committees. Bob Hodges, a member of the standing committee and congregational chair of Manningham Uniting Church, said the committee would add immense value to decision making leading to a wiser use of missional resources.
“This will assist in ensuring the Church’s long-term financial viability,” Mr Hodges said.
“The committee is blessed with members who have outstanding financial expertise and a depth of real world and global financial understanding.”
Mr Hodges said the committee should bring a degree of comfort to those in congregations and church committees who have expressed angst and frustration at the Church’s existing governance model in the wake of issues such as the Acacia development.
By Nigel Tapp