The Synod’s financial position was described as “at best stable” but “not out of the crisis” in the Finance, Investment & Property (FIP) Board report to the 29th Synod on 8 October.
FIP Board Chairperson, Andrew McBryde, stated that the Synod was “on the way, but not there yet" and outlined the direct strategies the FIP Board were pursuing to continue to improve the situation, but stressed the need for further attention on finances.
“The current funding model of the Synod is not sustainable,” said Mr McBryde. “Alternative funding models continue to be developed, and the FIP Board aims to have a proposal for the Synod Standing Committee by the end of the year.
“We need to focus on the utilisation of our resources, both property and people, and to give where we can.”
Director of Finance & Property Services, Robert Packer, advised that there was both good news and bad news regarding the Synod’s financial position.
He reported that while the draft financial results for the 2010-11 financial year show a small surplus for the Synod and a reduction in debt, there are still significant concerns that need to be addressed.
“The net asset position of the Synod must be improved, but there are only two ways of closing the gap–an equity injection and accumulating surpluses,” said Mr Packer.
At the 28th Synod, a capital injection of $20 million was requested through the transfer of beneficial use of property to the Synod.
In their report, the FIP Board acknowledged the $5 million in property which had been gifted to the Synod to date, with a further $3 million to be added, pending valuations and best alternate use options.
The report noted that the need still existed for further properties to be transferred to the Synod, and for “de-cluttering strategies” to streamline systems, products and services, and to reduce costs.
“The surplus for 2010-11 does not add much to the net asset position,” said Mr Packer. “The Treasury operations have an imbalance between what is owed to depositors and the amount invested.
“In a falling property and equity market, the result of this has been that loan rates have increased and deposit rates have dropped—a situation that neither the borrowers nor depositors have liked.”
Mr Packer also advised that while the line of credit with ANZ was currently undrawn, that debt levels were forecast to significantly increase.
“Cash flow forecasts of agencies’ capital programs will require a drawdown on the ANZ facility, possibly as high as $100 million,” he said.
Mr McBryde also expressed the FIP Board’s appreciation for the support provided by Robert Packer, Director of Finance & Property Services, during the challenging financial circumstances, and to the work of Finance & Property Services staff members.