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Earlier, we discussed the hot, dysfunctional mess that has been Grace Church’s financial reporting for most of Bob Malm’s tenure as rector. While some Planet Malm flunkies like to claim that there is “complete financial transparency” at the church, one only has to look at the opaque presentation of budget information, particularly salaries, to know that it is anything but. Nor is it posted on the parish website, which itself speaks volumes to the state of governance at Grace Church.

This post shows an excellent example of a church budget, as found on the St. Alban’s Annandale website. (BTW, kudos to my buddy Paul for being there. The church is richer for having you.)
First, as stated earlier, the budget is available via the church’s website. No need to ask for it, to look for it on the bulletin board in the downstairs hallway, etc. Instead, it’s available for all the world to see, under the vestry section of the church’s website. That sends a very public message about transparency and accountability in the church, and allows prospective members and donors to see, without making a big deal of it, how the church spends its money, even before visiting the church. In this post-Enron day and age, that’s huge.

Even more important it the breaking out of budget items by line item.That includes the rector’s compensation, the compensation of other staff, and more.

Check it out…everything is there. Yes, I get that this may not be comfortable for clergy or church staff, but it’s much the same regime as ethics disclosure forms for government employees. And the funds are donated, so why shouldn’t donors have this information?

Digging a little deeper, are there issues at St. Alban’s that are revealed in the financials? Yes, there are. These include the fact that the parish is drawing funds from its management reserve to balance the budget, which may or may not be a problem, depending on the root cause. Also, the limited amount of money allocated for the audit makes clear that the church does an Agreed-Upon Procedures (AUP) of the financials, which probably is not adequate for a church of this size.

But these issues are out in the open. 

Further rummaging around the church website makes clear that the parish does, in fact, do an AUP. The good news, though, is that the entire vestry sees the report and has the chance to answer questions. And with full disclosure of budget line items, including salaries, there is much less possibility of wrongdoing or hidden surprises.

Church minutes further reveal that there is a meaningful finance committee, which takes an active interest in the financial health of the parish and understanding the nuts and bolts of the budget. No having to ask the parish administrator for the audit report and being told no, as happened to me at Grace. (Why would that even be an issue? The fact that it was is profoundly troubling and speaks volumes to the state of affairs in the parish.)

Even better, the church provides budget-to-actual figures, which allow people to ask the hard questions and promotes accountability.

Looking at the church’s vestry minutes, there are some other really positive signs. These include a formal strategic planning process, using data derived from a parishioner survey; as well as proactively planning and budgeting for HVAC replacement. 

That compares favorably with Grace Church, which has ignored the fact that much of its HVAC has beyond beyond actuarial life for between four and nine years now. As a result, Grace will not only be dealing with a lack of HVAC on the third floor until well into 2019, but it has to borrow money for replacement—the most expensive way possible to fund the work. Meanwhile, the church is only vetting prospective vendors and getting quotes after failure of major system components.  This represents an appalling debacle that should never have been allowed to happen in the first place—and I can assure you, decision makers at Grace, including Bob Malm, have been given multiple heads-up about this sad state of affairs.

Is St. Alban’s a paradise in which problems and conflicts, including governance issues, don’t exist? Of course not. Are there things the church could do better? For sure. Even just a quick read of church governance materials shows, for example, that there is some conflation of strategic and tactical planning. That said, governance at St. Albans represents a massive improvement over the sadly dysfunctional system under Bob Malm and his appointed executive committee