Discipline ¶806

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  ¶ 806. Fiscal Responsibilities-All monies contributed by a local church to any of the general funds of the Church, as listed or defined in ¶ 810.1, and such other funds as may have been authorized by the General Conference shall be held in trust by the council and distributed only in support of the ministries of the respective funds. The council shall be accountable to The United Methodist Church through the General Conference in all matters relating to the receiving, disbursing, and reporting of such funds, and agencies receiving such funds shall be fiscally accountable to the council. In the exercise of its fiscal accountability role, the council shall have the authority and responsibility to perform the following functions:
1. It shall submit to each quadrennial session of the General Conference, for its action and determination, budgets of expense for each of the general funds of the Church, as listed or defined in ¶ 810.1, and such other general funds as the General Conference may establish. It shall also make recommendations regarding all other funding considerations to come before General Conference. Actual receipts for each fund for the quadrennium then ending shall be the basis for all budgeting procedures and comparisons for the coming quadrennium.
    a) The council shall make recommendations to the General Conference as to the amount and distribution of the Episcopal Fund and General Administration Fund, and, in consultation with the
Connectional Table, other apportioned general funds.
b)
In the case of the World Service Fund, the General Council on Finance and Administration and the Connectional Table shall proceed in the following manner in developing budget recommendations as they relate to allocations to the general program agencies of the Church:
    (1) The Connectional Table shall, in consultation with the General Council on Finance and Administration, develop recommendations to the General Council on Finance and Administration on needs of the general program agencies for the programs, missional priorities, and special programs.
(2) The General Council on Finance and Administration shall then establish the estimated amount available for distribution from the World Service Fund among the general program agencies.
(3) The Connectional Table in consultation with the General Council on Finance and Administration, will review both the program priorities and the estimated amount available to the general program agencies, and then establish the amounts to be distributed to those agencies from the annual World Service allocation.
(4) Only when the General Council on Finance and Administration and the Connectional Table agree on the allocations to the several general program agencies and on the total sum of the World Service Fund budget will these allocations and total sum be included in the World Service budget to be recommended to the General Conference by the General Council on Finance and Administration.
(5) Before the beginning of each year, the General Council on Finance and Administration shall estimate and communicate to the Connectional Table the sum available at that time from World Service contingency funds to meet requests for additional funding from the general program agencies. The Connectional Table shall be authorized to approve allocations to the general program agencies for additional program funding up to the limit so established. No money shall be allocated by the Connectional Table from this source for general administrative costs, fixed charges, or capital outlay without approval by the General Council on Finance and Administration.
(6) The Connectional Table shall receive from the General Council on Finance and Administration copies of the proposed annual budgets of the general program agencies, in order that it may review such budgets in relation to the program proposals made by those agencies in their quadrennial budget requests.
    c) It shall recommend the formulas by which all apportionments to the annual conferences shall be determined, subject to the approval of the General Conference.
d) In the case of the Ministerial Education Fund, Black College Fund, Africa University Fund, and Interdenominational Cooperation Fund, the General Council on Finance and Administration and the Connectional Table shall proceed in the following manner to develop funding level recommendations.
    (1) The Connectional Table shall, in consultation with the General Council on Finance and Administration, develop funding level recommendations to the General Council on Finance and Administration for these funds.
(2) The General Council on Finance and Administration shall then establish the estimated amount available for distribution through those funds.
(3) The Connectional Table, in consultation with the General Council on Finance and Administration, will review both the funding priorities and the estimated amount available to the funds and then establish the amounts to be distributed to each.
(4) Only when the General Council on Finance and Administration and the Connectional Table agree on the funding levels for each fund will these be recommended to the General Conference by the General Council on Finance and Administration.
  2. It shall receive and disburse in accordance with budgets and/or directives approved by the General Conference all funds raised throughout the Church for any of the general funds of the Church, as listed or defined in ¶ 810.1, and for any other fund or funds, as directed by the proper authority.
3. Accounting and Reporting-It shall require all agencies receiving general Church funds (see ¶ 810.2) to follow uniform accounting classifications and procedures for reporting. It shall include in its quadrennial report to the General Conference a fiscal report for each such agency receiving general Church funds.  
4. General Agency Budget Review-It shall require annually one month in advance of its annual meeting, or as is deemed necessary, and in such form as the council may require, statements of proposed budgets of all treasuries or agencies receiving general Church funds (see ¶ 810.2). It shall review the budget of each agency receiving general Church funds in accordance with guidelines that it shall establish and communicate to the agencies, including the relationship between administration, service, and promotion. In the interest of sound fiscal management, the council will ensure that expenditures of agencies receiving general Church funds do not exceed receipts and available reserves, and this within a budget approved by the council.  
5. General Agency Audits-It shall require an annual audit of all treasuries receiving general Church funds (see ¶ 810.2), following such auditing procedures as it may specify. It shall select the auditing firm for these annual audits based on a recommendation by the Committee on Audit and Review.
6. Internal Audit Functions-It shall establish and conduct the internal auditing functions for all agencies receiving general Church funds (see ¶ 810.2).
7. It shall establish policy governing the functions of banking, payroll, accounting, budget control, and internal auditing for all agencies receiving general Church funds (see ¶ 810.2). The council may, upon mutual consent of the agencies involved, perform the functions of banking, check preparation, and payroll on behalf of an agency in order to maximize efficiency of operation.
8. It shall review for approval plans for financing all international or national conferences and convocations to be held under the auspices of any general agency receiving general Church funds (see
¶ 810.2).
9. It shall be responsible for ensuring that no board, agency, committee, commission, or council shall give United Methodist funds to any gay caucus or group, or otherwise use such funds to promote the acceptance of homosexuality. The council shall have the right to stop such expenditures.19  This restriction shall not limit the Church’s ministry in response to the HIV epidemic.  
10. In keeping with the Church’s historic stand on total abstinence, the council shall seek to ensure that no apportioned general funds are expended for the use of alcoholic beverages.
11. It shall develop general investment policies and guidelines for all agencies receiving general Church funds (see ¶ 810.2), following consultation with those agencies. The council, in its oversight capacity, shall review those agencies’ compliance with the general investment policies and guidelines. Upon their review, the council may recommend that an agency take certain actions to conform with these policies and guidelines. These guidelines are recommended for all Church organizations. If requested by an agency, the council shall provide consultation and assistance on the development of specific investment policies and the selection of investment counselors and managers.The council shall review, on at least an annual basis, the performance of all invested funds of all agencies receiving general Church funds. The council shall have complete authority to manage any portfolio of less than $5,000,000 and may, upon request by the agency, manage larger portfolios. The council and general agencies are encouraged to invest in institutions, companies, corporations, or funds that make a positive contribution toward the realization of the goals outlined in the Social Principles of The United Methodist Church (¶¶ 160-166).
12. The Committee on Audit and Review (¶ 805.4b), on behalf of the council, shall monitor the compliance of agencies receiving general Church funds (see ¶ 810.2) with the fiscal accountability policies and practices set forth in ¶ 806 and the general policies set forth in
¶¶ 811.1-3, .6, 818, and with recommendations made by the independent and/or internal auditors under ¶ 805.4b, with respect to matters of possible or potential financial impropriety. The council shall have authority to implement actions which it may approve based on recommendations from the committee.
a) If the committee finds that there are violations of such policies, practices, or recommendations, it shall first notify the president and general secretary of the agency involved and the president and general secretary of the General Council on Finance and Administration of its findings, in writing. It shall also request from the agency, within a specified timeline, a written response to the committee’s findings, with the written response to include additional information and/or proposed corrective action.
    b) After receiving the agency’s response, the committee may take one or more of the following actions:
    (1) It may determine that the response and any additional information supplied by the agency is sufficient to explain the issue or situation that occasioned the initial finding, and that no further action is needed.
(2) It may determine that the corrective action proposed by the agency is sufficiently responsive to the issue or situation, and that, when implemented, no further action will be needed.
(3) It may determine that the agency’s response is insufficient to address the issue or situation. In that case, it may recommend to the agency, for the agency’s consideration, the type of corrective actions that it believes necessary to address the issue or situation adequately, along with a timeline for reporting corrective action taken.
(4) It may prepare an informational report on the matter for those members of the council who have been assigned responsibility for reviewing the annual budget of the agency.
    c) It may recommend to the General Council on Finance and Administration for its action, with notice of the recommendation given to the president and general secretary of the agency involved, one or more of the following steps:
    (1) Continuing monitoring by the council’s internal audit department, at the expense of the agency involved, until the committee finds that the issue has been satisfactorily resolved.
(2) Withholding of an appropriate amount of funding from general fund receipts that would otherwise be payable to the agency, until the council, on recommendation of the committee, finds that the issue has been satisfactorily resolved.
(3) Reporting of any unresolved issues to the next session of the General Conference, along with recommendations for General Conference action.
19. See Judicial Council Decisions 491, 597.