Chapel of the Cross Vestry Meeting Agenda July 21—5:30 pm, Library

I. Devotion—Anna Lorenz II. Approval of Consent Agenda III. Finance Report—Ann Craver and John Pegram

a. Approval of Matt Pohlman as assistant treasurer b. Acceptance of 2015 audit c. Other actions as recommended by finance

IV. Election of delegates to Diocesan Convention V. Motion to move into executive session for clergy reports VI. Old Business/New Business if necessary

a. Recognition of Bill Joyner Appended Items: Consent Agenda with attachments:

• Minutes from June 16 vestry meeting • Buildings and Grounds report, with resolutions of appreciation • Treasurer’s report • June Financials • Chief Administrator’s report • Outreach and Social Justice Commission report

Matt Pohlman resume Finance Report Draft audit and audit findings letter For your calendar: July 24—Dinner on the Grounds July 31—Farewell to Lizzy and Robert Davenport after 10 am service July 31 - August 6—High School Mission Trip to Washington, NC August 1-12—Pilgrimage to South Africa and Kwasa August 7—Elizabeth Marie Melchionna’s first Sunday—welcoming event following 10 am service August 14—Rector welcome event following 8 am service August 21—Rector welcome event following 5:15 pm service August 28—Dinner on the Grounds and Outreach and Engagement Fair (Bill Joyner’s last Sunday) September 5—Labor Day Holiday September 11—Academic Year Service Schedule resumes and Parish Feast Day (Holy Cross Day)

Consent Agenda Chapel of the Cross Vestry Meeting July 21, 2016

1. Approval of minutes from the June 16 vestry meeting.

2. Acceptance of Buildings and Grounds report, with resolution of appreciation.

3. Acceptance of Treasurer’s report.

4. Acceptance of June 2016 financial information.

5. Acceptance of chief administrator’s report.

6. Acceptance of Outreach and Social Justice Commission report

If you have questions or comments about the report of a committee or individual, please contact the committee chair or report author to comment or ask questions. If you have typos to correct or insignificant changes to make to the minutes, please let me know by July 20 and I will make those changes prior to the meeting.

If you have substantive changes to suggest for the minutes or would not vote for the acceptance of a report for reasons that need to be discussed by the vestry as a whole, you may ask to remove that item from the consent agenda. We will not immediately begin discussing that item; it will be placed on the regular agenda for discussion later in the meeting. Only vestry members may make motions—not clergy or staff. Please let Melody know if you plan to request removal of an item.

Items for vestry discussion and decision that are not routine or that require a vestry vote will be on the “regular” agenda prepared by the senior warden prior to the meeting. I have included the attachments that require action on your part as a separate document. We will publish the complete vestry packet with the full agenda and any revised consent agenda attachments closer to the meeting.

Here is the order of actions regarding consent agenda:

1. The senior warden will ask for a motion for approval of consent agenda. That means someone moves to accept all items listed.

2. Once someone makes a motion and there is a second to the motion, the senior warden asks if there is any item that anyone wants moved to the full agenda.

3. If no vestryperson asks that something be moved to the full agenda for discussion, then the senior warden calls for a vote and all items are accepted/approved in one motion.

4. Any vestryperson can ask that one of the items/reports listed be moved to the full agenda in the appropriate location because they have questions. (We don’t begin discussing it in the middle of accepting the consent agenda.)

5. Only begin using a consent agenda if you are certain all vestry members are observing their duty of care (reading the vestry packet prior to coming to the meeting). The use of the consent agenda is to help elevate the conversation of the vestry and to quickly pass by things that do not require discussion.

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THE NEXT MEETING OF THE VESTRY

OF THE CHAPEL OF THE CROSS

WILL BE ON THURSDAY,

JULY 21, 2016

IN THE PARISH LIBRARY

with the business session to begin at 5:30 p.m.

Draft Minutes of the Vestry of the Chapel of the Cross

16 June 2016

The June meeting of the Vestry was held in the parish library on Thursday, June 16,

2016. Vestry members present were Melody Savage (Sr. Warden), Kevin Trapani (Jr. Warden),

Barbara Day, Katherine Kopp, Martha Schütz, Ted Vaden, Syd Alexander, Ann Henley, Doug

Kelly, Anna Lorenz, and David Ross. Also present were Robert Davenport (Interim Rector),

Tammy Lee (Associate for University Ministry), Vicky Jamieson-Drake (Associate for Pastoral

Ministry), Walker Mabe (Parish Administrator), John Pegram (Treasurer), and Nancy Kelly

(Clerk).

The Interim Rector was leading the 5:15 p.m. Evening Prayer service, so the Sr. Warden

presided and opened the meeting at 5:30 p.m. by asking Ms. Lee to offer a prayer.

Devotions

Mrs. Day led the devotions for the evening, beginning with a lovingkindness meditation

and continuing with commentary on the first chapter of The Rule of Benedict by Joan Chittester.

Consent Agenda

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The following items were placed on the Consent Agenda (attached):

-Approval of minutes from the May 26 Vestry meeting

-Acceptance of Christian Formation report on Vacation Church Camp (attached)

-Acceptance of May 2016 financial information (attached)

-Acceptance of Buildings and Grounds Committee report (attached)

-Acceptance of Security and Access Findings and Recommendations (attached)

A request was made to remove the Buildings and Grounds Committee report, with

Security and Access Finding and Recommendations, and the report of the minutes of the Vestry

meeting of May 26 from the Consent Agenda for further discussion.

Discussion then focused on the procedures to be followed when considering the Consent

Agenda. Responding to a suggestion that the minutes should not be included in the Consent

Agenda, Mrs. Mabe assured the Vestry that if there are any changes suggested other than

correction of typographical errors, the minutes will not be included in the Consent Agenda. The

Consent Agenda is to include items that the Vestry can approve without discussion, and a Vestry

membert can request that any item needing further discussion be removed from the Consent

Agenda for this purpose.

It was moved by Mr. Trapani, seconded by Mr. Ross, and passed unanimously, that

the Vestry approve the Consent Agenda, with removal of the Buildings and Grounds

Committee report, including Security and Access Finding and Recommendations, and the

minutes of the Vestry meeting of May 26, for further discussion.

Following approval of the Consent Agenda, the Vestry addressed the items that had been

removed from the Consent Agenda.

Buildings and Grounds Committee

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Mr. Alexander, Chair of the Buildings and Grounds Committee, explained to the Vestry

that the committee discussed the report by the Security and Access Subcommittee and made a

recommendation that the Vestry accept the report, with the understanding that the conversation on

security is an ongoing conversation and that as additional concerns arise and are discussed,

additional recommendations will be brought to the Vestry for approval. This issue is addressed in

the last paragraph of the first section of the report: “Following approval by the Vestry, B&G

intends to develop a plan for the implementation of the recommendations and to begin carrying

them out, in consultation with the staff. To the extent that the recommendations call for

developing additional policies, the B&G Committee will draft policies and submit them to the

Vestry for approval.”

Further discussion centered on the issues of Alert Carolina and communication protocols

with respect to how to inform interested parties about security measures in place. Specifically

mentioned were security issues related to after hours work by members of the Altar Guild,

parishioners who lead Evening Prayer, and individuals practicing the organ. The training of

ushers in emergency procedures was also raised as being a necessary part of safety and security.

These concerns were referred to the Buildings and Grounds Committee for consideration.

The Buildings and Grounds Committee then asked for approval of its report, including

the motion that the Vestry adopt the security and access recommendations prepared by the

Security and Access Subcommittee, and authorize the implementation of these recommendations

by the Buildings and Grounds Committee and the staff, and the motion the the Vestry approve the

amendment to the Buildings and Grounds Charter as stated in the Buildings and Grounds

Committee report.

It was moved by the Buildings and Grounds Committee, and passed

unanimously, that the Vestry accept the Buildings and Grounds Committee report for June,

including the motions included in the report.

Approval of Minutes

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The following correction was made to minutes of the Vestry meeting of May 26, which

had been moved from the Consent Agenda for amendment:

p. 4, paragraph under Associate for Pastoral Ministry, abbreviate first sentence to

read “Mrs. Jamieson-Drake spoke to the Vestry about the prayer lists.” and amend second

sentence to read “The Good Samaritan Guild reaches out on a weekly basis to parishioners on that

week’s list . . .”

It was moved by Mrs. Kopp, seconded by Mr. Alexander, and passed

unanimously, that the Vestry approve the minutes of the Vestry meeting of May 26, as

amended.

Rector Search Committee

Mr. Trapani provided the Vestry with an update on the work of the Rector Search

Committee, saying that the work of the committee is proceeding in a timely manner under the

able leadership of chair Dick Taylor. He added that the committee is delighted with the pool of

applicants.

Treasurer

The Treasurer’s Report is attached. In his report Mr. Pegram has addressed the request of

the Vestry that the report be a more concise narrative commentary on the monthly balance sheets.

Finance Committee

The report of the Finance Committee is attached. Also attached is a memo from the

Chief Administrator to the Finance Committee on the topic of flower memorials.

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The Finance Committee discussed the request from the Vestry that the volume of

monthly financial statements be reduced. It was the consensus of the Vestry that the

recommendation of the Finance Committee be followed, that the Finance Committee needs to see

the Special Funds summary and Encumbrances summary on a monthly basis but that the Vestry

on a monthly basis will receive only the Balance Sheets and the current General Fund Revenues

and Expenditures, with the Special Funds and Encumbrances information to be included on a

quarterly basis.

Discussion of the situation with altar flowers followed. The Finance Committee

recommends that any reduction in the number of Sundays with altar flowers is an issue that will

need to be addressed by the new rector. It further recommends that budgeting for altar flowers be

changed to make clear the impact of expense vs. revenue by creating separate line items in the

budget for expenses for altar flowers and revenues for memorial flowers.

It was moved by the Finance Committee, and passed unanimously, that the

Vestry approve the recommendation of the Finance Committee that, beginning with the

2017 fiscal year, accounting for altar flowers be changed to reflect the budget impact of the

flower program by creating separate line items for altar flower expense and altar flower

revenue, to be developed and managed by the Parish Administrator in consultation with the

clergy and Altar Guild.

The Vestry, in discussing approval of this motion, expressed concern that the parish not

wait until the 2017 fiscal year to begin to address the shortfall of funds in the Altar Guild Flower

line item. This issue needs to be kept constantly in front of parishioners. Ms. Lee, Mrs. Mabe ,

and Mrs. Kopp will work on new ways to deal with the flower situation, including not only altar

flowers on Sundays, but also Monday flower deliveries to those who are ill, grieving, or

celebrating.

Outreach and Social Justice Commission

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The report of the Outreach and Social Justice Commission is attached. Attached to the

report are the recommendations for grants of ABC Sale funds, including a list of requests that

were not funded.

A comment was made that previous ABC Sale funds recommendations included more

detailed information, including the level of support in the previous year and a specific reason for

either funding or denial of funding to each organization. It was explained that the decision not to

fund an organization’s request was generally because the request was either vague or poorly

written or because the request didn’t meet the criteria established by the ABC Sale Committee.

It was moved by the Outreach Ministry Committee, and passed

unanimously, that the Vestry approve the recommendations of the ABC Sale Disbursement

Subcommittee for disbursement of ABC Sale funds in the amounts of $3000 to Episcopal

Farmworkers, $1580 to UNC Horizons, $2500 to Compass Center, $1400 to Book Harvest,

$1500 to Fuel Up Perry Harrison, $3000 to NC Healthy Start, $1000 to Thompson Child

and Family Focus, $3130 to Club Nova, $2250 to Farmer Foodshare, $7000 to TABLE,

$4000 to Family Violence and Rape Crisis Chatham, $1850 to Orange County Living Wage,

and $5000 to Habitat.

The Outreach Ministry Committee also made a recommendation for approval of $3000

for Club Nova in support of their building fund.

It was moved by the Outreach Ministry Committee, and passed

unanimously, that the Vestry approve the recommendation of the Outreach Ministry

Committee for disbursement of $3000 to Club Nova in support of their building fund.

Interim Rector

Mr. Davenport reported that he has been attending monthly diocesan meetings with

interim rectors, in which they share their experiences personally, professionally, and vocationally.

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Associate for Pastoral Ministry

Mrs. Jamieson-Drake informed the Vestry that Priests Associate John Keith and Ralph

Smith will be retiring in the near future. It was suggested that the Vestry draft a note of

appreciation for their service and that the note be accompanied by an honorarium or by a gift.

Mr. Alexander commented on the powerful vigil led by Mrs. Jamieson-Drake last night

for the victims of the recent violence in Orlando.

Associate for University Ministry

Ms. Lee echoed the comments of Mr. Alexander on last night’s vigil.

Recognition of Bill Joyner

Ms. Savage said that gifts to Mr. Joyner in recognition of his tenure as a deacon at Chapel

of the Cross need to be both appropriate and meaningful. It was suggested that formal

recognition of Mr. Joyner would be very appropriate at a Monday night service for individuals

with developmental disabilities. Mrs. Kopp and Mrs. Schütz will work on this.

Discussion

The Vestry began what is to be a ongoing discussion on the following question: As a

parish, how do we work in the wider community to create civil discourse on matters of social

justice?

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Mrs. Jamieson-Drake pointed out several thoughts to address this question. We as

individuals must remember that we are flawed and imperfect. We need to find some connection

to others’ motives in an effort to find common ground. We need to express curiosity about

others’ views. We should strive to be intentional listeners.

Kwasa

Mrs. Day informed the Vestry that the Global Mission Committee will have a table in the

Great Hall to welcome contributions for Kwasa. The goal for this fundraising effort is $3500.

Mr. Davenport offered a prayer, and the meeting adjourned at 7:40 p.m.

Respectfully submitted,

Nancy F. Kelly

Clerk of the Vestry

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Attachments

- - - Consent Agenda

- - - Vacation Church Camp

- - - Combined Balance Sheets as of May 31, 2016

- - - Buildings and Grounds Report

- - - Security and Access Subcommittee Findings and Recommendations, June 2016

- - - Treasurer’s Report

- - - Finance Committee Report

- - - Memo from Walker Mabe, Chief Administrator, to Finance Committee RE:

Flower Memorials

- - - Outreach and Social Justice Commission Report

Chapel  of  the  Cross  Buildings  and  Grounds  Committee  Minutes  July  2016  

 

The  Buildings  and  Grounds  Committee  met  at  5:30  PM  on  Monday,  July  11,  2016  in  the  parish  library,  with  Syd  Alexander  (chair),  Brian  Coggins,  Jean  DeSaix,  Peter  DeSaix,  Terry  Eason,  Andrew  Joyner,  Doug  Kelly,  Martha  Schutz  Lo,  Alan  Rimer,  Nancy  Tunnessen,  and  Jonathan  Whitney  in  attendance.  

 

Reports  Received  

! Syd  reported  that  he  has  discussed  the  fallen  plaster  in  the  church  with  Rob  Sullivan,  who  does  not  believe  this  is  a  cause  for  concern.    According  to  Rob,  pieces  of  plaster  have  been  falling  from  this  arch  for  decades,  and  in  no  case  has  it  been  a  problem  whether  from  a  standpoint  of  safety,  structural  integrity,  or  aesthetics.  

! Syd  reported  that  the  preschool  security  improvements  have  been  held  up  in  permitting,  but  that  the  issuance  of  a  building  permit  by  the  Town  is  expected  soon  and  the  project  should  then  be  completed  quickly.    Additionally,  Otis  Elevator  has  been  working  on  a  simpler  plan  for  how  to  secure  the  elevator.  

! Syd  reported  that  he  is  working  on  having  the  gap  filled  in  the  bushes  separating  the  COTC  parking  lot  from  the  Morehead  Planetarium.    It  was  noted  that  it  is  probably  best  to  wait  until  the  fall  for  planting.  

! Syd  reported  that  the  automated  external  defibrillator  (AED)  company  has  been  out  to  review  the  placement  of  the  AED.    The  company  representative  believes  the  current  location  would  actually  be  better  than  placing  the  AED  at  the  front  desk,  as  the  current  location  is  closer  to  the  Church.    The  AED  is  being  retained  in  its  current  location,  but  new  signage  has  been  installed.  

! Alan  reported  that  Barnhill  has  made  progress  on  the  punch  list,  getting  it  down  to  about  a  dozen  items.    One  of  these  items  is  significant:  the  doors  between  the  Great  Hall  and  the  terrace  continue  to  have  problems.    These  doors  delaminated  due  to  water  damage  last  year;  they  were  refinished  in  March,  but  they  are  already  delaminating  again.  

! Alan  reported  that  the  building  is  still  under  a  Temporary  Certificate  of  Occupancy,  but  that  he  expects  a  permanent  Certificate  of  Occupancy  to  be  issued  in  the  next  couple  of  months,  as  the  punch  list  is  completed.  

! Jon  reported  that  Barnhill  will  be  repainting  the  interior  walls  of  the  Chapel  in  the  next  couple  of  weeks.    This  was  part  of  its  contract  for  the  sprinkler  work  in  the  Chapel.  

 

 

Discussion  of  Ongoing  Business  

! The  committee  charter  and  membership  rotation  were  again  discussed.    Committee  memberships  and  terms  were  not  worked  out  at  the  time  the  charter  was  written  last  winter,  were  not  completed  until  May,  and  were  not  communicated  clearly  in  May  and  June  due  to  technical  difficulties.    Some  committee  members  expressed  concern  about  having  only  nine  committee  members,  others  expressed  concern  over  how  the  appointment  and  terms  of  consultants  would  be  handled  and  how  this  provision  would  be  used  to  ensure  the  availability  of  appropriate  expertise.    After  discussion,  the  consensus  of  the  committee  was  that  it  would  be  best  to  revisit  these  concerns  at  a  later  date.    

! Syd  reported  that  the  Security  and  Access  recommendations  were  discussed  extensively  by  the  Vestry,  and  that  the  Vestry  would  like  to  see  policies  developed  in  these  areas.    He  proposed  that  the  Buildings  and  Grounds  committee  take  on  this  task  over  the  coming  months,  with  the  Security  and  Access  Subcommittee  taking  the  lead  in  drafting  proposals.    It  was  noted  in  discussion  that  the  Security  and  Access  recommendations  would  be  the  appropriate  starting  point  for  developing  said  policies,  and  that  this  subcommittee  will  need  additional  members,  and  probably  a  staff  representative.    

! Alan  presented  a  proposal  from  David  Swanson  of  Swanson  and  Associates  Landscape  Architecture  for  improvements  to  the  entrances  to  the  Memorial  Garden  and  to  the  stairs  between  the  COTC  parking  lot  and  the  Morehead  Planetarium  lot.    The  proposal  calls  for  installing  a  new,  longer,  more  gently  sloped  stone  ramp  at  the  main  entrance  to  the  garden,  with  a  metal  handrail  on  one  side.    The  secondary  entrance  to  the  garden  would  be  rebuilt  with  stone  steps  with  solid  stone  tread  and  a  metal  handrail  on  one  side.    The  passage  from  the  COTC  parking  lot  to  the  Morehead  lot  would  be  rebuilt  with  new  stone-­‐tread  steps  and  two  metal  handrails.    Both  Alan  and  David  Swanson  believe  this  can  be  carried  out  for  less  than  $5000,  and  the  B&G  budget  has  sufficient  funds  for  this  project.    Alan  has  requested  quotes.    The  committee  believes  that  this  work  should  be  completed  as  soon  as  possible.    Alan  will  send  information  on  the  bids  to  the  committee  as  soon  as  it  is  available,  for  approval  by  email.    

 

Followup  Needed  

! Completion  of  the  project  to  improve  the  safety  of  the  parking  lot  steps  and  the  entrance  to  the  memorial  garden:  when  bids  are  in,  the  committee  will  approve  the  project  by  email,  to  commence  ASAP.  

! Implementation  of  the  Security  and  Access  recommendations.  ! Completion  of  signage  for  Sunday  handicapped  parking.  

! Monitoring  completion  of  the  building  punch  list  and  the  preschool  security  improvements.  

! In  the  autumn,  planting  of  a  new  bush  to  fill  the  hole  in  the  hedge  between  the  COTC  parking  lot  and  the  Morehead  Planetarium  parking  lot.  

! Continuation/completion  of  the  long-­‐range  maintenance  planning  begun  while  Alan  was  chair.  

 

Next  Meeting  

! The  next  meeting  of  the  Buildings  and  Grounds  committee  will  be  Monday,  August  8,  2016  at  5:30  PM  in  the  Library.  

 

 

Respectfully  submitted,  

Brian  E.  Coggins  B&G  Committee  Member  

 

Resolution of Appreciation

Whereas, the charter for the Buildings and Grounds Committee of the Chapel of the Cross charges the Committee with the “responsibility for assuring that all buildings and surrounding grounds are maintained in a safe and attractive manner so that the mission and programs of the parish including worship, Christian formation, fellowship, and outreach are optimally supported by our facilities. Further the Committee has responsibility for the oversight and care of all church buildings and grounds including their care, maintenance, repair, restoration and improvement.” And;

Whereas, it requires the services of a number of individuals with specialized skills, knowledge and experience to carry out the work described in the charter, and;

Whereas there have been many individuals, including a number of volunteers from the parish who have faithfully contributed to this work over the years, and;

Whereas four members of the parish have recently stepped down from their work with the Buildings and Grounds Committee.

Therefore, the Buildings and Grounds Committee and the Vestry of the Chapel of the Cross, do hereby give grateful thanks to God for the extraordinary service to the Church rendered by Phil Rees, Ken Robinson, Rob Sullivan and Ken Talbot.

July, 2016

CHAPEL OF THE CROSS - TREASURER'S REPORT June 2016

General FundJune 2015 June 2016

Beginning of Year Balance 90,771 58,834 Revenues Year to Date 832,506 791,011 Expenditures Year to Date 837,770 895,767 Net (5,264) (104,756) Ending Balance 85,507 (45,922)

Anticipated cash flow for 2016: ($45,000)

Development FundDevelopment Fund Balance 658,660 Loan Balance 2,720,000

COMMENTSOur General Fund balance is a negative $46,000. It is not unprecedented for the fund to become negative

due to our low operating fund balance at the beginning of the year. It should be noted that theeffect of a negative balance is that the church is in essence borrowing from our restrictedfunds in order to cover the cash flow needs of our operating budget.

The January 1, 2016, beginning balance for our General Fund - our operating cash - was ~ $59,000. Shouldmy projected cash flow for 2016 prove to be accurate, we will end the year with an operating cashbalance of $15,000.

The following expense line items continue to run high: Music (70% of yearly budget spent thru June); Hospitality 78%; telephone 67%; Printing 102%; Svc Chgs 213%; B&G 88%; F&E 130%.

Respectfully submitted,John Pegram, Treasurer

2015 2016

ASSETS

Cash 796,237 859,466

Certificates of Deposit - -

Investments: Diocese 1,475,964 987,838

Investments: Vanguard 430,489 453,920

Deposits/Securities in Transit 9,347 6,538

Prepaid expense 4,533 -

Accounts receivable 8,256 4,197

Discounted Beneficial Interest in Assets Held by Others 202,463 206,453

Other assets - -

Total Assets 2,927,288 2,518,412

LIABILITIES

Prepaid pledges 37,804 32,005

Employee withholding (79) 194

Accounts payable 23,739 1,752

Accrued Annual Leave 33,919 32,497

Due to Special Funds 2,754,171 2,393,295

Other liabilities (7,772) 4,690

Total Liabilities 2,841,781 2,464,433

FUND BALANCE

Beginning balance 90,771 58,834

Current year Change (5,264) (104,756)

Total Fund Balance 85,507 (45,922)

RESTRICTED FUNDS

Lilly Endowment Grant - 99,901

Total Restricted Funds - 99,901

Total Liabilities, Fund Balance, and Restricted Funds 2,927,288 2,518,412

ASSETS

Income 1,166,331 995,046

Principal 1,587,840 1,398,249

Total Assets 2,754,171 2,393,295

LIABILITIES

Development Fund Loan Principal 2,760,000 2,720,000

Development Fund Retainage - -

Total Liabilities 2,760,000 2,720,000

FUND BALANCE

Beginning balance 75,413 (355,952)

Current year Change (81,242) 29,247

Total Fund Balance (5,829) (326,705)

Total Liabilities and Fund Balance 2,754,171 2,393,295

Notes to Balance Sheets:

1)

2)

3)

4) Special Funds assets are divided into income and principal. In general, income is available for expenditure in

accordance with the purposes of the particular fund. Principal is not, in general, available for expenditure.

General Fund

Special Funds

Chapel of the Cross

BALANCE SHEETS

June 30, 2016

All real assets (checking accounts, investments, etc.) are held in the General Fund. Thus the total assets of the General

Fund represent the total assets on the books of the Chapel of the Cross.

The General Fund owes a substantial part of these assets to the Special Funds. The total of the assets of the Special

Funds always equals the total of the General Fund "due to" liability lines, summarized here as "Due to Special Funds".

This structure means that there is no direct mapping of Special Funds assets to particular real investments or accounts.

Financial Reports Page 1 of 6 Balance Sheets

May

2015

June

2015

2015

To-date

2015

Budget

% of 2015

Budget

May

2016

June

2016

2016

To-date

2016

Budget

% of 2016

Budget

REVENUES 1 1

Prior Year Pledges 200 - 5,020 10,500 47.81% 2,000 64 6,944 5,000 138.88%

Current Year Pledges 98,699 118,347 703,752 1,430,537 49.19% 101,084 90,362 634,129 1,371,389 46.24%

Plate Offering 2,108 1,744 13,280 30,000 44.27% 1,934 1,295 12,055 30,000 40.18%

Unpledged Contributions 4,770 4,850 29,858 80,000 37.32% 6,810 4,786 34,539 90,000 38.38%

Camp Min Diocesan Grant 5,152 5,152 30,915 61,365 50.38% 5,036 5,036 30,216 61,365 49.24%

B&G Endowment Income - 821 1,623 3,150 51.52% - 723 1,471 2,835 51.90%

E&UO Endowment Income - 1,372 2,711 5,262 51.52% - 1,208 2,458 4,736 51.90%

CO Endowment Income - 5,925 11,712 22,733 51.52% - 5,218 10,619 20,460 51.90%

W&PS Endowment Income - 690 1,364 2,647 51.52% - 608 1,236 2,383 51.88%

External Endowments 450 740 1,930 3,456 55.84% 450 749 1,947 3,111 62.58%

Investment Income (25) 1,111 1,307 1,000 130.69% (26) 1,098 4,014 900 445.95%

Xfer from James Fund - - - 8,612 0.00% - 15,612 15,612 15,612 100.00%

ABC Sale Receipts - 25,000 25,000 25,000 100.00% - 26,380 26,380 25,000 105.52%

Building Use Income - 50 2,335 12,000 19.46% 310 - 1,402 12,000 11.68%

Parking Revenue 100 600 1,700 3,600 47.22% 500 - 1,400 3,600 38.89%

Parish Fundraisers - - - - 0.00% - - 6,588 6,000 109.80%

Total Revenue 111,455 166,403 832,506 1,699,862 48.97% 118,099 153,137 791,011 1,654,391 47.81%

EXPENDITURES

Work Outside the Parish

Diocesan Share 14,844 14,844 89,065 178,130 50.00% 14,935 14,935 89,618 179,217 50.01%

Episcopal Institutions - - - - 0.00% - - - - 0.00%

Episcopal Seminaries - - - 2,000 0.00% - - - 1,000 0.00%

Yates Scholarship - - - 200 0.00% - - - 200 0.00%

Outreach Ministry 2,500 27,750 31,250 70,000 44.64% 150 5,500 31,333 61,600 50.87%

Global Outreach 6,520 3,420 11,140 15,000 74.27% 500 718 9,718 13,200 73.62%

Johnson Service Corps 1,250 1,250 7,500 15,000 50.00% 1,100 1,100 6,600 13,200 50.00%

ABC Sale Disbursements - 25,000 25,000 25,000 100.00% - 26,380 26,380 25,000 105.52%

Subtotal, 25,114 72,264 163,955 305,330 53.70% 16,685 48,633 163,649 293,417 55.77%

Work Outside the Parish

Parish Program

Christian Formation 1,322 1,052 6,933 13,975 49.61% 2,497 1,378 6,447 12,320 52.33%

Books & Pamphlets 44 - 559 800 69.91% (2) - 455 700 65.07%

Prayer Books & Hymnals - - - 500 0.00% - 95 95 440 21.59%

Altar Supplies & Flowers 612 82 1,468 2,700 54.39% 240 2,753 3,908 5,700 68.56%

Vestments 181 261 1,210 3,250 37.22% 191 128 968 2,860 33.85%

Acolytes - - - 150 0.00% - - 15 132 11.32%

Music Program 2,540 1,711 12,869 13,500 95.33% 2,612 852 12,375 17,666 70.05%

Youth Ministry (353) 41 2,155 7,200 29.92% 43 200 1,865 6,336 29.44%

Hospitality 1,159 906 9,571 13,000 73.63% 2,223 1,050 8,906 11,440 77.85%

Campus Ministry 1,428 213 6,593 12,130 54.36% 1,582 119 4,949 10,675 46.36%

Crossties - 38 134 900 14.90% - - - 792 0.00%

Pastoral Ministries Support 25 124 249 750 33.22% - 22 86 660 13.04%

Stewardship & Development - 477 1,776 2,700 65.78% - 77 323 2,376 13.60%

Spiritual Life Committee - - 360 740 48.65% - - 142 652 21.80%

Other Parish Program Exp - - (153) 1,950 -7.84% - - 60 1,716 3.47%

Communications 383 122 3,472 6,300 55.10% 45 182 1,501 5,000 30.03%

Diocesan Conv. Delegates - - - 1,880 0.00% - - - 2,500 0.00%

Subtotal, 7,341 5,026 47,197 82,425 57.26% 9,432 6,856 42,097 81,965 51.36%

Parish Program

Chapel of the Cross

GENERAL FUND REVENUES AND EXPENDITURES

June 30, 2016

Financial Reports Page 2 of 6 General Fund Revs and Exps

May

2015

June

2015

2015

To-date

2015

Budget

% of 2015

Budget

May

2016

June

2016

2016

To-date

2016

Budget

% of 2016

Budget

Chapel of the Cross

GENERAL FUND REVENUES AND EXPENDITURES

June 30, 2016

Program Support

Postage - 298 787 5,000 15.75% 39 - 50 4,000 1.24%

Postage Equipment - - 864 1,800 48.02% - - 438 1,800 24.33%

Telephone 767 770 4,420 9,000 49.11% 858 1,001 5,339 8,000 66.74%

Telephone Equipment 99 - 495 300 165.00% - - 198 1,000 19.80%

Office Supplies 203 84 662 2,500 26.48% 272 527 1,031 2,000 51.54%

Printing 993 179 2,499 5,000 49.98% 122 1,799 4,100 4,000 102.49%

Printing Equipment 2,307 1,998 10,182 22,000 46.28% 2,133 629 8,711 22,000 39.59%

Computer Equipment - 249 1,401 2,000 70.07% - - 325 2,000 16.25%

Computer Maintenance 894 463 7,552 10,000 75.52% 959 102 4,594 7,000 65.62%

ACS OnDemand/Access ACS - - - - 0.00% 797 774 3,493 9,300 37.56%

Accounting Services 3,822 3,822 22,932 45,865 50.00% 3,975 3,975 23,850 47,700 50.00%

Audit - 9,750 9,750 12,600 77.38% - 9,800 9,800 12,600 77.78%

Accounting Supplies 375 - 1,550 1,300 119.25% 60 - 583 1,300 44.83%

Service Charges 140 131 1,193 2,400 49.69% 643 568 5,121 2,400 213.38%

Merchant Fees 511 523 3,941 7,500 52.55% 317 233 1,831 7,500 24.41%

Parking 500 502 2,902 6,000 48.36% 406 500 2,908 6,000 48.47%

Events & Conferences (1,497) (2,941) (11,285) 250 -4514.10% - - 20 250 7.98%

Staff & Volunteer Training 1,996 2,224 4,768 2,500 190.74% 1,260 59 2,512 5,000 50.24%

Subtotal, 11,111 18,051 64,614 136,015 47.51% 11,840 19,968 74,902 143,850 52.07%

Program Support

Staff

Salaries & Wages 60,187 58,500 360,768 717,961 50.25% 54,966 54,625 334,986 679,999 49.26%

Pensions 4,190 4,107 30,515 88,035 34.66% 5,708 3,835 44,524 82,977 53.66%

Health Insurance 7,457 7,457 52,525 88,681 59.23% 9,763 9,763 68,049 105,840 64.29%

Life Insurance 218 184 1,443 2,590 55.71% 119 119 822 1,031 79.76%

Interim Rector Phone Reimbursement - - - - 0.00% 100 100 600 900 66.67%

FICA - Lay 2,672 2,738 16,019 33,038 48.49% 2,474 2,522 15,207 33,075 45.98%

Worker's Comp Ins 11 - 3,553 4,000 88.82% - - 3,806 4,500 84.58%

Retired Housekeeper 683 683 4,099 8,652 47.37% 683 683 4,099 8,652 47.37%

Supply Organists - 250 250 3,000 8.33% - 350 350 3,000 11.67%

Rector's Expenses 34 12 658 3,620 18.17% 152 24 2,356 3,620 65.09%

Assoc (Parish) Expenses - 90 2,681 3,105 86.34% (500) - 48 - 0.00%

Assoc (Pastor) Expenses 604 349 2,168 3,105 69.83% 56 (5) 251 3,105 8.08%

Assoc (Campus) Expenses - - 227 3,105 7.30% 1,093 - 1,171 3,105 37.73%

Dr. of Christian Formation Expenses 16 6 135 1,045 12.90% 47 67 428 1,045 40.97%

Deacon J Expenses - 70 120 750 16.00% - 70 70 750 9.33%

Organist's Expenses - - 382 3,105 12.30% - 62 126 3,105 4.05%

Parish Admin Expenses 100 92 460 1,000 46.02% 136 98 931 1,500 62.09%

Other Staff Expenses - - 30 - 0.00% - - 173 - 0.00%

Search & Moving Expenses - (1,251) (1,251) 5,000 -25.02% - 11,932 11,985 30,000 39.95%

Subtotal, 76,173 73,288 474,780 969,792 48.96% 74,796 84,245 489,984 966,204 50.71%

Staff

Physical Plant

Utilities 5,237 11,525 35,231 84,500 41.69% 4,676 9,911 30,599 81,000 37.78%

Buildings & Grounds 2,223 3,391 21,073 32,000 65.85% 9,386 (1,834) 30,830 35,000 88.08%

HVAC 10,417 629 11,426 25,000 45.70% 909 582 6,742 17,000 39.66%

Musical Instruments 135 135 3,439 4,000 85.97% 135 135 270 4,000 6.75%

Furniture & Equipment - - 418 3,000 13.92% - - 2,598 2,000 129.92%

Cleaning Vendor 1,547 1,449 9,184 16,800 54.67% 3,775 11,000 18,375 34,800 52.80%

Janitorial Supplies 553 26 1,233 4,000 30.83% 617 - 1,250 2,000 62.52%

Property & Liability Ins - 5,221 5,221 27,000 19.34% - 6,490 19,470 25,960 75.00%

Debt Service Support - - - 10,000 0.00% - 15,000 15,000 15,000 100.00%

Xfer to Capital Fund - - - - 0.00% - - - - 0.00%

Subtotal, 20,113 22,375 87,224 206,300 42.28% 19,497 41,285 125,134 216,760 57.73%

Physical Plant

Total Expenditure 139,851 191,005 837,770 1,699,862 49.28% 132,250 200,987 895,767 1,702,196 52.62%

NET CURRENT PERIOD (28,396) (24,602) (5,264) - (14,152) (47,850) (104,756) (47,805)

Financial Reports Page 3 of 6 General Fund Revs and Exps

Beg of Year

Principal

Beg of Year

Income

Year to Date

Change in

Principal

Year to Date

Revenue &

Liability

Change

Year to Date

Expenses

Current

Principal

Cuurent

Income

Permanent Endowments

Building & Grounds Endowments

Building & Grounds Endowment 49,500 - (1,676) 876 (876) 47,824 -

C/C Cobb Chapel 35,813 679 (1,212) 644 - 34,601 1,323

Cobb 160,706 7,863 (5,440) 2,955 - 155,266 10,818

Elkins Rose Garden 46,700 - (1,581) 826 (826) 45,119 -

Gibson-Hill Garden 36,451 1,702 (1,234) 667 (645) 35,217 1,725

Stoudemire Chapel 58,748 - (1,989) 1,040 (1,040) 56,759 -

Buildings & Grounds Endowments Subtotal 387,917 10,244 (13,132) 7,009 (3,387) 374,785 13,866

Evangelism & University Outreach Endowments

Evangelism & University Outreach Endowment 69,871 - (2,365) 1,236 (1,236) 67,506 -

Campus Ministry 69,027 240 (2,337) 1,224 (1,305) 66,690 159

French Scholarship 32,840 11,014 (1,112) 728 - 31,728 11,742

House Scholarship 18,328 7,187 (620) 420 - 17,708 7,607

Evangelism & University Outreach Endowments Subtotal 190,066 18,440 (6,434) 3,609 (2,541) 183,632 19,508

Community Outreach Endowments

Community Outreach Endowment 20,793 - (704) 368 (368) 20,089 -

Mills-Tolbert 180,133 - (6,098) 3,188 (3,188) 174,036 -

Social Ministry 4,868 2,498 (165) 385 - 4,703 2,883

Community Outreach Endowments Subtotal 205,794 2,498 (6,966) 3,940 (3,555) 198,827 2,883

Worship & Program Support Endowments

Worship & Program Support Endowment 69,871 - (2,365) 1,236 (1,236) 67,506 -

Altar Guild 3,282 10,157 (111) 1,283 (450) 3,171 10,991

Duerden 2,381 4,721 (81) 105 - 2,300 4,826

Shaffer 43,494 - (1,472) 770 (770) 42,022 -

Worship & Program Support Endowments Subtotal 119,028 14,878 (4,029) 3,394 (2,456) 114,999 15,817

Total Permanent Endowments 902,805 46,061 (30,561) 17,952 (11,939) 872,244 52,073

Other Funds with Restricted Principal

Outreach 399,149 3,698 (13,512) 7,438 (7,561) 385,637 3,575

Altar Guild Flower 6,431 - (218) 1,946 (1,946) 6,214 -

James Music 55,807 13,806 (1,889) 3,885 (16,312) 53,918 1,380

Lantz Scholarship 83,047 9,784 (2,811) 1,603 - 80,236 11,386

Other Funds with Restricted Principal Total 544,434 27,288 (18,430) 14,872 (25,820) 526,005 16,341

Program Funds

Program - 178,860 - 3,954 - - 182,813

Capital - 4,680 - 3,154 (490) - 7,344

ABC Sale - 222 - 26,389 (26,380) - 232

Chapel Organ - (40,382) - 509 - - (39,873)

Clergy Enrichment - 15,620 - 204 (1,587) - 14,237

Designated Bequests/Gifts - 16,762 - - (11,573) - 5,189

Designated Offerings - 4,357 - 61,139 (64,605) - 891

Development - 675,859 - 33,245 (50,444) - 658,660

Episcopal Church Women - 8,648 - 114 - - 8,762

Global Missions - 1,408 - 421 (100) - 1,729

Good Samaritan - 1,383 - 18 - - 1,401

Library - 5,023 - 66 - - 5,089

Memorials - 12,657 - 934 (2,648) - 10,943

Refugee Resettlement - 1,094 - 14 - - 1,108

Student Mission - 17,181 - 2,706 (1,740) - 18,146

Thompson Clothing - 7,133 - - - - 7,133

Vestments - 1,242 - 16 - - 1,258

Youth Mission - 2,508 - 5,206 (500) - 7,215

Program Funds Total - 914,255 - 138,090 (160,067) - 892,278

Clergy Discretionary Funds

Asso/Campus Discr’y - 8,568 - 3,248 (2,116) - 9,700

Asso/Parish Discr’y - 402 - 1 (300) - 103

Deacon J Discr’y - 1,984 - 26 - - 2,010

Pastoral Asst Discr’y - 8,127 - 4,038 (2,911) - 9,254

Rector’s Discr’y - 10,124 - 7,978 (4,815) - 13,287

Clergy Discretionary Funds Total - 29,204 - 15,291 (10,141) - 34,354

Overall Total 1,447,240 1,016,808 (48,991) 186,206 (207,967) 1,398,249 995,046

Chapel of the Cross

SPECIAL FUNDS SUMMARY

June 30, 2016

Financial Reports Page 4 of 6 Special Funds Summary

Current

Income

Operating

Budget

Support

Designated

Uses

Pending

Designations

Net Available

Income

Permanent Endowments

Building & Grounds Endowments

Building & Grounds Endowment - -

C/C Cobb Chapel 1,323 - 1,323

Cobb 10,818 - 10,818

Elkins Rose Garden - -

Gibson-Hill Garden 1,725 1,725

Stoudemire Chapel - -

Buildings & Grounds Endowments Subtotal 13,866 - - - 13,866

Evangelism & University Outreach Endowments

Evangelism & University Outreach Endowment - -

Campus Ministry 159 159

French Scholarship 11,742 11,742

House Scholarship 7,607 7,607

Evangelism & University Outreach Endowments Subtotal 19,508 - - - 19,508

Community Outreach Endowments

Community Outreach Endowment - -

Mills-Tolbert - -

Social Ministry 2,883 - 1,151 1,732

Community Outreach Endowments Subtotal 2,883 - - 1,151 1,732

Worship & Program Support Endowments

Worship & Program Support Endowment - -

Altar Guild 10,991 2,093 8,898

Duerden 4,826 4,826

Shaffer - -

Worship & Program Support Endowments Subtotal 15,817 - 2,093 - 13,724

Total Permanent Endowments 52,073 - 2,093 1,151 48,829

Other Funds with Restricted Principal

Outreach 3,575 3,575 -

Altar Guild Flower - -

James Music 1,380 - - 1,380

Lantz Scholarship 11,386 11,386

Other Funds with Restricted Principal Total 16,341 - 3,575 - 12,766

Program Funds

Program 182,813 - 182,813

Capital 7,344 - 7,344

ABC Sale 232 232

Chapel Organ (39,873) (39,873)

Clergy Enrichment 14,237 14,237

Designated Bequests/Gifts 5,189 5,189 0

Designated Offerings 891 891 -

Development 658,660 658,660

Episcopal Church Women 8,762 8,762

Global Missions 1,729 - 1,729

Good Samaritan 1,401 1,401

Library 5,089 5,089

Memorials 10,943 10,643 300 -

Refugee Resettlement 1,108 1,108

Student Mission 18,146 18,146

Thompson Clothing 7,133 7,133

Vestments 1,258 1,258

Youth Mission 7,215 7,215

Program Funds Total 892,278 - 16,723 300 875,255

Clergy Discretionary Funds

Asso/Campus Discr’y 9,700 9,700

Asso/Parish Discr’y 103 103

Deacon J Discr’y 2,010 2,010

Pastoral Asst Discr’y 9,254 9,254

Rector’s Discr’y 13,287 13,287

Clergy Discretionary Funds Total 34,354 - - - 34,354

Overall Total 995,046 - 22,391 1,451 971,204

Chapel of the Cross

SPECIAL FUNDS ENCUMBRANCES

June 30, 2016

Financial Reports Page 5 of 6 Special Funds Encumbrances

Fund

Amount of

Encumbrance Description of Encumbrance

Altar Guild 2,093 Designated gifts for kneelers

subtotal 2,093

Capital Fund

subtotal -

C/C Cobb Chapel -

subtotal -

Cobb

subtotal -

Designated Bequests/Gifts 600 Church Doors

1,500 Elder ministry, memory of Jean Copeland

34 Remainder after gift of Gospel Book and 3 Communion Sets

45 Writing workshop

100 Adult Education/Spiritual Formation

2,910 Sanctuary Lamp & Associated Fixtures, Hobbs Memorial

subtotal 5,189

Designated Offerings 110 ERD, Good Friday Offering, Church in Jerusalem

488 Episcopal Diocese of NC, Assisting Bishop's Discretionary Fund

293 Stop Hunger Now

subtotal 891

Global Missions Fund -

subtotal -

James Fund

subtotal -

Memorials 10,643 Burial Plaque Engraving

subtotal 10,643

Outreach 3,575 Circles of Support

subtotal 3,575

Program

subtotal -

Social Ministry

subtotal -

Total 22,391

Fund

Amount of

Encumbrance Description of Encumbrance

Memorials 300 2016 memorials pending family designation

subtotal 300

Social Ministry 1,151 Tithes of Undesignated Bequests and Memorials

subtotal 1,151

Total 1,451

Pending Designation

Designated Uses

Chapel of the Cross

SCHEDULE OF ENCUMBRANCES

June 30, 2016

Financial Reports Page 6 of 6 Schedule of Encumbrances

Chief Administrator’s Report July 2016 Communications and Development

• Helping to orchestrate announcement of new rector call and publication on website, Facebook,

and Twitter. • Working with staff members to publish Friday morning email with contributions from different

voices and responsiveness to current events and moments of significance in parish life. • Working with parish life coordinator to establish WE ARE HERE email campaign to celebrate

different volunteer opportunities and recruit new volunteers. Also working to streamline visitor/newcomer processes and emphasize shepherding of newcomers towards full membership in the parish.

• Compiling building update emails into an inexpensive booklet as a gift for all donors to the capital campaign, at any level.

• Continuing to educate parish about Access ACS and COTC Connect, a digital online giving platform that is a combination of online giving, event registration, and parish directory. Platform includes the Church Life app that enables members to access directory and parish calendars, and make one-time donations.

• Trouble-shooting COTC Connect registration, online pledging, recurring gifts set-up. • Daily update of monitors in lobby: keeping a rotating roster of photographs updated on lobby

monitor; using the other monitor for weekly schedules and event advertisements. • Continuing to publish This week at COTC, an interactive email with links publicizing

opportunities for engagement and involvement in the parish, the community, and beyond. • Continuing to update Finding Your Place: directory of parish ministries reflecting commission-

based organization designed to reach parishioners at all levels of involvement and preferences for activity.

• Capital campaign: Continuing to monitor campaign results and keep data for oversight committee; continuing to generate hand-written thank-you notes to all donors. Planning campaign wrap-up and positioning for retire the debt campaign in 2019.

Administration

• Established new relationship with local supplier for office supplies, printing, cleaning and maintenance supplies, paper supplies, etc. This has resulted in immediate savings.

• Took part in negotiations for HVAC controls maintenance and service contract. • Ordered new computer and accessories for new rector. • Implemented Ministry Scheduler, an online scheduling program for worship service volunteers.

The system collects available dates from volunteers, does the schedule, notifies volunteers, and provides an application for requesting and assigning substitutes. This frees up volunteer leaders to recruit and train other volunteers rather than get bogged down in scheduling issues.

• Meeting with groups, organizations and individuals who want to use the building; communicating our policies, drawing up contracts, staffing events where needed.

• Submitted building permit request to move forward with vestry-approved security improvements to the ground floor preschool area. Worked with elevator company to find a cost-effective and workable solution for elevator security during preschool hours. We are treating the improvements as a change order to the original parish house design project.

• Building administration: continuing to work with Barnhill, the architect, and others on punch list items, design issues, and project closeout. Successfully challenged decision on fire protection in the church; Building Code Council reversed the decision of the Department of Insurance as of 3-15. Various trades working on different aspects of the punch list—roofing, plumbing, doors, etc.

• Serving on financial processes and procedures committee. • Finished chapel repair project. Oversaw installation of sprinkler system in the chapel, including

protection of organ and other fixtures. Preparing to paint interior. • Working with commission chairs and vestry liaisons to develop processes and protocols for

commission activities, reports, and goals. • Working with kitchen manager to develop policies and budget requirements for kitchen and

kitchen supplies and staples. Developed kitchen contract and kitchen training program as part of building use process.

• Regular meetings with oversight committee, buildings and grounds, wardens, staff, finance.

Outreach and Global Missions Report

July 21, 2016 The committees are not meeting in July but the chair shared these reminders of upcoming events: July 27-Aug 11, 2016: Pilgrimage of 11 parishioners to visit South Africa. Among other activities, the group will visit the Kwasa School, for which the parish has provided financial support through donations to construct/renovate their chapel. August 28, 2016: Parish Engagement Fair with tables and hosts providing information on the many activities and groups that are part of or affiliated with the parish. Perri Kersh is the contact for more information on community partners who will be represented at the Parish Fair (919-824-8196 or perri@neat-freak.com) In the fall, Club Nova, a parish-supported nonprofit, will host an adult education session to inform our parishioners about their work. Members of the outreach committee will be touring their facility in September.

Matt W. Pohlman, CPA 95103 Vance Knoll

Chapel Hill, NC 27517 matt@pohlmancapitaladvisors.com

C: (919) 360-2537 H: (919) 929-6401

EXPERIENCE

Pohlman Capital Advisors Chapel Hill, NC 2012 -Present Founder and Investment Advisor

Manage and oversee all investment, operational and compliance activity for the organization Work directly with families in the following areas: asset allocation and portfolio construction,

financial planning, financial reporting and budgeting, philanthropic goal setting and management of non-liquid capital assets.

As an ancillary client service, provide business advisory services for clients including, but not limited to: business plan development and creation, evaluation of financial information, investment opportunity assessment, general analytics, budgeting and forecasting.

GenSpring Family Offices Chapel Hill, NC 2010 -2012 Family Wealth Advisor

Managed the client relationship and advisory activities related to that client engagement. Advisory activities often included: financial and estate planning, family accounting and reporting, philanthropic goals setting and entity structure, family governance, etc.

Collaborated with GenSpring investment team and clients/families to provide comprehensive investment portfolio management, financial reporting and financial planning – with a focus on family strategic planning and developing/maintaining investment policies

Worked directly with public accounting firms to provide oversight and guidance on family tax compliance and consultative matters.

Reported to President of the Carolinas and work closely with team-members at offices throughout the Southeastern United States.

Franklin Street Partners Chapel Hill, NC

2004 – 2010 Director of Client Services and Multi-Family Office Managed and directed the Client Services Division and oversee all activities performed by various

groups comprising Client Service Division – including, but not limited to, the Multi-Family Office, Client Communication & Reporting, and internal policy and process development function.

Oversaw the overall client/family accounting and administrative operations of the Franklin Street Partners Multi-Family Office – consisting of 12 clients/families and over $300M of assets under advisement. Worked directly with clients on a wide-range of family matters. Worked extensively with families/clients on budgeting, investment policy statements and overall wealth planning.

Led firm-wide effort to improve the quality, consistency and overall communication of client reporting. Developed a comprehensive client tier system to make delivery of information and overall client service more efficient for the firm and effective for the client.

Managed client-owned businesses for family office clients – providing accounting, operations and direct management oversight to those entities. Developed detailed business plans and strategic growth objectives for the client-owned businesses. Created a number of detailed financial models for client families.

Performed a variety of oversight and long-range wealth management functions for Family Office clients – e.g. developed and applied financial models to evaluate unique investment holdings and client/family debt needs, oversaw and evaluated insurance, and worked with external counsel on various estate and financial matters.

Member of the firm’s Management Committee (reporting to the FSP Board as necessary), firm-wide strategic planning group, and Officer of Franklin Street Trust Company.

Center for International Education Chapel Hill, NC 2002 -2004 Director of Program Services

Managed and reviewed all non-educational services (health insurance, educator financial planning and tax compliance, transportation, travel and events) and managed various external vendors. Had direct P&L ownership and accounting oversight.

Reported to the CEO and Board of Directors and worked directly on forecasting, budgeting and planning for the organization – coordinated and communicated with international offices and a substantial variety of stakeholders.

Responsible for all staffing and related human capital decision-making matters for 6-10 direct reports. Overall management of up to 30 people at any given time.

President of Chapel Hill Leasing, Inc. – a wholly-owned subsidiary of the Center for International Education. Managed and had final decision-making responsibility on both P&L and Balance Sheet expenditures.

Shurgard Storage To Go, Inc Seattle, WA 2000-2002 Director of Finance

As the highest ranking financial officer, oversaw all financial and administrative decision-making for a start-up company and played an integral part in the growth of that organization.

Reported directly to the CEO and worked in tandem with CEO on developing strategic objectives. Was responsible (and accountable) for both strategic development and execution.

Worked directly with CEO to develop the business plan, detailed financial models and, ultimately, raise capital for the company.

Managed the financial accounting and reporting – and related staff members. Directed and oversaw month-end closing, quarterly reporting and annual review with Board of Directors.

Worked directly with our primary funding source – Shurgard Storage Centers (a publicly traded REIT).

Ernst & Young, LLP

1998-2000 Accounting & Audit Senior Seattle, WA Managed work and staff for small audit engagements in the Seattle area. Performed audits and business consultative projects for clients. Worked on public offering filings (S-1) for several firms – split time between Seattle and Palo

Alto. Financial Advisory Services, Accountant Atlanta, GA

Worked in the corporate turnaround group – primarily with commodities-based organizations. Interacted with clients at high levels (CFO, COO) and provided both feedback and direction for

related-parties and lenders. National Accounting Office, Staff New York City, NY

One of four staff selected out of a national pool to a one-year residency in the National Accounting Office.

Worked directly with E&Y’s lead technical partners on a variety of accounting issues. Interacted with Partners and Senior Managers from around the world looking for specific research

related to SEC filings.

EDUCATION UNIVERSITY OF NORTH CAROLINA Chapel Hill, NC KENAN-FLAGLER BUSINESS SCHOOL Master of Accountancy, May 1998 Honors include: Undergraduate Teaching Assistant

Recipient of Harris Fellowship Bachelor of Science in Business Administration, 1996 ADDITIONAL Former Trustee, Chapel Hill Preservation Society

Investment Committee, Chapel Hill Public Library Foundation North Carolina Certified Public Accountant

North Carolina Association of Certified Public Accountants American Institute of Certified Public Accountants

REFERENCES Available upon request

Report of the Finance Committee to the Vestry July 21, 2016

In its monthly meeting of Tuesday, July 12, 2016, the Finance Committee:

- Unanimously approved a motion to recommend to the Vestry the appointment of Matt Pohlman as Assistant Treasurer. As such, he will succeed John Pegram as Treasurer for a 3-year term when John’s term expires April 30, 2017. (Vestry action required) (Resume attached.)

- Discussed Treasurer’s Report and financial statements through June 2016. The report showed negative cash flow of $45,922 through June. The committee noted that at midyear, revenues are running at 48 percent of budget and expenses at 53 percent of budget. Based on current trends, Treasurer John Pegram projected negative cash flow at year-end of $45,000. Spending overages are occurring in the areas of building and grounds, music, flowers, hospitality, telephone, and service charges. Committee member Stephanie Perun agreed to research the line items of service charges and merchant fees, which are currently running at 70 percent of budget. June expenses were increased by the transfer of $15,000 for debt service, as budgeted.

- Reviewed the Butler and Burke draft 2015 audit. Audit Subcommittee Chair

Chris FitzSimons summarized the report as a clean opinion that reflected favorably upon the accounting staff’s capability and cooperation. The only flagged misstatement was an immaterial entry for interim rector pension payment, which has been corrected. The auditors reviewed comments from the 2014 audit and found that most items raised then have been appropriately addressed. The report noted that the previously identified problem of untimely credit card documentation still has not been fully corrected. Senior Associate Treasurer Barney Varner noted that the audit said the parish continued the policy of adopting balanced budgets, but that this year (2016) the Vestry departed from the policy by adopting a deficit budget. The Finance Committee agreed the Vestry needs to be aware of that. The committee voted unanimously to recommend that the Vestry accept the audit, which is required to be submitted to the Diocese by September 1. (Vestry action required)

- Received a report from John McGee on the Diocesan Common Trust Fund. John is chair of the Diocesan Investment Committee, as well as chair of the parish Investment Subcommittee. The Trust Fund currently has a balance of approximately $34 million, of which approximately half is assets of the Diocese and half managed by the Diocese for individual parishes, including $987,838 from Chapel of the Cross as of June 30. As part of a 5-year review, the Diocesan Committee has put out for bid the management and accounting of the Common Fund and expects to receive 15 bids and choose a manager in

the fall. The fund performance has lagged benchmarks the last couple of years. The Diocesan Investment Committee also is working on a socially responsible investment guide as part of the Diocesan Investment Policy Statement.

- Reviewed the continuing altar flowers deficit. Walker expects that we will

end the year with approximately $10,300 in expense and $4,600 in contributions. The committee notes that approximately $6,000 of the projected $45,000 deficit for 2016 would be due to flowers. The Finance Committee discussed recommending a more sustainable expense line for the 2017 budget, to be managed in consultation with the Rector, Altar Guild and Chief Administrator.

- Noted that spending with University Florist this year is $7,300 through June.

The Parish Conflict of Interest Policy requires Vestry approval of spending with a related party that exceeds $5,000 for the year. University Florist is owned by a parishioner. The Finance Committee approved unanimously a motion recommending that the Vestry review that spending, approve it retroactively and further authorize additional spending of no more than $5,000 through the end of the year. (Vestry action required)

- Received a report from the Stewardship Committee recommending creation

of a Gifts Policy to govern receipt of non-pledge gifts to the parish and a Gifts Committee to oversee its implementation. The committee received the report as information.

- Expressed gratitude and recognition to former Finance Committee members

John McGee and Chris FitzSimons for their long and dedicated service to the parish’s financial management. Chris served 20 years on the Finance Committee and John 10 years, and both are former treasurers of the parish. They have rotated off the committee as part of the committee charter limiting terms of committee service.

Respectfully submitted, Ted Vaden Chair

     

 CHAPEL OF THE CROSS 

 Financial Statements 

 December 31, 2015 and 2014

       

 

TABLE OF CONTENTS                                   Independent Auditors’ Report .............................................................................................................................. 2 ‐ 3  Statements of Assets, Liabilities, and Fund Balances ‐ Modified Cash Basis ............................................................... 4  Statements of Revenues, Expenses, and Other Changes in Fund Balances ‐ Modified Cash Basis ........................... 5 ‐ 6  Notes to Financial Statements ............................................................................................................................ 7 ‐ 21   

   

        To the Members of the Vestry Chapel of the Cross Chapel Hill, North Carolina   

  INDEPENDENT AUDITORS’ REPORT   We have audited  the accompanying  financial statements of Chapel of  the Cross  (a non‐profit organization), which comprise the statements of assets, liabilities, and fund balances ‐ modified cash basis as of December 31, 2015 and 2014 and the related statements of revenues, expenses, and other changes in fund balances ‐ modified cash basis for the years then ended, and the related notes to the financial statements.  Management’s Responsibility for the Financial Statements  Management is responsible for the preparation and fair presentation of these financial statements in accordance with the modified cash basis of accounting as described in Note B; this includes determining that the modified cash basis of accounting is an acceptable basis for the presentation of the financial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.  Auditor’s Responsibility  Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with U.S. generally accepted auditing standards.  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.    An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.  The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.  In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s  internal control.   Accordingly, we express no such opinion.   An audit also  includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.  We believe that the audit evidence we have obtained  is sufficient and appropriate to provide a basis for our audit opinion. 

    Opinion  In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities, and fund balances of Chapel of the Cross as of December 31, 2015 and 2014, and its revenues, expenses, and other changes in fund balances for the years then ended in accordance with the modified cash basis of accounting as described in Note B.  Basis of Accounting  We draw  attention  to Note B of  the  financial  statements, which describes  the basis of  accounting.  The  financial statements are prepared on  the modified cash basis of accounting, which  is a basis of accounting other  than U.S. generally accepted accounting principles. Our opinion is not modified with respect to that matter.  

  Winston‐Salem, North Carolina [DATE] 

 

 See accompanying notes to financial statements.                  Page 4 

CHAPEL OF THE CROSS STATEMENTS OF ASSETS, LIABILITIES, AND FUND BALANCES ‐ MODIFIED CASH BASIS December 31, 2015 and 2014     

    2015      2014    ASSETS  Cash and cash equivalents  $  1,071,010  $  714,336 Accounts receivable    3,972  123,451 Prepaid expenses    31,715  17,653 Investments     1,487,544  1,916,844 Beneficial interest in assets held by others    206,453    202,463 

        TOTAL ASSETS  $  2,800,694  $  2,974,747   LIABILITIES AND FUND BALANCES      Liabilities 

Prepaid pledges  $  64,010  $  75,608 Accounts payable  81,306  239,036 Accrued expenses    32,497    33,919 Long‐term debt    2,820,000    2,460,000 

    Total Liabilities    2,997,813    2,808,563      Fund Balances   Unrestricted general fund  158,833    90,771   Restricted funds    (355,952)    75,413     Total Fund Balances    (197,119)    166,184      TOTAL LIABILITIES AND FUND BALANCES  $  2,800,694  $  2,974,747  

  

          

   See accompanying notes to financial statements.                  Page 5 

CHAPEL OF THE CROSS STATEMENT OF REVENUES, EXPENSES, AND OTHER CHANGES IN FUND BALANCES ‐ MODIFIED CASH BASIS For the Year Ended December 31, 2015            Unrestricted               General    Restricted         Fund      Funds      Totals    REVENUES 

Contributions  $  1,559,391  $  578,632  $  2,138,023 Diocesan grant  61,829  ‐    61,829 Fund‐raising  ‐    38,775  38,775 Endowment income  103,860  ‐    103,860 Investment income  1,484  54,052  55,536 Unrealized depreciation     ‐      (94,753)    (94,753) Other income    10,085    ‐      10,085 

      TOTAL REVENUES    1,736,649    576,706    2,313,355  EXPENSES 

Work outside the Parish  305,330  36,729  342,059   Parish programs  96,205  903,561  999,766   Staff    972,754  ‐    972,754   Program support  151,576  ‐    151,576   Physical plant    210,503    ‐      210,503       TOTAL EXPENSES    1,736,368    940,290    2,676,658 

 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES  281  (363,584)  (363,303)  Fund Transfers   

Satisfaction of restrictions  34,169    (34,169)    ‐   Restricted investment income  8,612  (8,612)  ‐   ABC sale  25,000  (25,000)  ‐  Fund Balances, Beginning    90,771    75,413    166,184  Fund Balances, Ending  $  158,833  $  (355,952)  $  (197,119) 

 

 See accompanying notes to financial statements.                   Page 6 

 

CHAPEL OF THE CROSS STATEMENT OF REVENUES, EXPENSES, AND OTHER CHANGES IN FUND BALANCES ‐ MODIFIED CASH BASIS For the Year Ended December 31, 2014            Unrestricted               General    Restricted         Fund      Funds      Totals    REVENUES 

Contributions  $  1,519,844  $  1,239,759  $  2,759,603 Diocesan grant  61,365  ‐    61,365 Fund‐raising  ‐    40,148  40,148 Endowment income  3,653  ‐    3,653 Investment income  (402)  43,639  43,237 Unrealized appreciation     ‐      80,658    80,658 Other income    2,485    ‐      2,485 

      TOTAL REVENUES    1,586,945    1,404,204    2,991,149  EXPENSES 

Work outside the Parish  309,882  29,180  339,062   Parish programs  84,257  5,103,181  5,187,438   Staff    968,795  ‐    968,795   Program support  135,306  ‐    135,306   Physical plant    175,240    ‐      175,240       TOTAL EXPENSES    1,673,480    5,132,361    6,805,841 

 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES  (86,535)  (3,728,157)  (3,814,692)  Fund Transfers   

Satisfaction of restrictions  34,529    (34,529)    ‐   Restricted investment income  8,612  (8,612)  ‐   ABC sale  33,500  (33,500)  ‐  Fund Balances, Beginning    100,665    3,880,211    3,980,876  Fund Balances, Ending  $  90,771  $  75,413  $  166,184  

 

 

                                 Page 7 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS    NOTE A:     NATURE OF ACTIVITIES   The Chapel of the Cross, located in Chapel Hill, North Carolina, is a parish of the Episcopal Diocese of North Carolina. The governing body is a twelve‐member Vestry elected by the enrolled, confirmed communicants in good standing of the Parish. The Treasurer is appointed annually by the Vestry.  Canon 23 of the Diocese of North Carolina provides that the Vestry shall be trustees of the Parish, shall have charge of all secular concerns thereof, shall hold the property belonging thereto, and shall be authorized to collect, invest and disburse its funds.   NOTE B:       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Basis of Accounting   The Parish operates on a modified cash basis of accounting. Under this method of accounting, revenues are generally recognized when  received  and  expenditures when  incurred, with  the  following modifications:    (1)  contributions designated as pre‐payments of pledges  for  the next calendar year are  recorded as prepaid pledges  rather  than as revenues of the current year, (2) contributions by check dated on or before the last day of the calendar year but received by mail after the close of the calendar year are treated as deposits in transit and recorded as current  year revenues, (3) gifts of securities in the hands of brokers for sale are recorded as securities in transit, (4) expense for refundable sales tax is recorded as an account receivable, (5) portions of undesignated fund balance and certain unexpended portions of current appropriations in the General Fund are recorded as designated fund balance when set aside for specific uses in future  years by Vestry  action,  (6)  investments  are  recorded  at market  value  including unrealized  appreciation or depreciation, and (7) fixed asset additions are not capitalized and therefore depreciation is not recorded.  Basis of Presentation ‐ Fund Accounting  The accounts of the Parish are organized on the basis of funds, each of which constitutes a separate accounting entity. The operations of each fund are accounted for by a separate set of self‐balancing accounts reflecting its assets, liabilities, fund balance, revenues and expenditures.  The funds are created because of restrictions on the uses of revenues arising from endowments and other contributions earmarked by the donor or the Vestry for special purposes.  Cash and Cash Equivalents  At December 31, 2015 and 2014, cash consisted of cash on hand and in banks.  The Parish maintains its cash in bank accounts, including cash on deposit in excess of federally insured limits.  The Parish has not experienced any losses on these accounts.  Investments  Investments  in marketable  securities with  readily determinable  fair values are  reported at  their  fair values  in  the statements of assets, liabilities, and fund balances.  Investments in the Diocesan Common Trust are reported at net asset value, which approximates fair value.  Unrealized losses of $94,753 and investment income of $55,536 are included in the revenues of the general fund and participating restricted funds for the year ended December 31, 2015.  Unrealized gains of $80,658 and  investment  income of $43,237 are  included  in  the  revenues of  the general  fund and participating restricted funds for the year ended December 31, 2014.   

 

                                 Page 8 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS    NOTE B:     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  

Beneficial Interests in Assets Held by Others  

The Parish has a beneficial interest in an irrevocable charitable remainder unitrust which is administered by a third party trustee.  Upon the death of the donor, the trust principal and any accrued and undistributed income will be payable in unrestricted form to the Parish.  The Parish has recorded its interest in the unitrust based on fair value as measured by the present value of the estimated future distribution to the Parish upon termination of the agreement. The estimated future distribution is based on an expected rate of return of the underlying assets, a discount rate of 5% and applicable mortality tables.    

Fair Value Measurements  

Financial assets and liabilities required to be measured on a recurring basis (at least annually) are classified under a three‐tier hierarchy.  Fair value is the amount that would be received to sell an asset, or paid to settle a liability, in an orderly transaction between market participants at the measurement date.  

The classification of assets and liabilities within the hierarchy is based on whether inputs to the valuation methodology used for measurement are observable or unobservable.   Observable inputs reflect market‐derived or market‐based information obtained from independent sources while unobservable inputs reflect estimates about market data.  See Note H for assets of the Parish measured at fair value on a recurring basis.  

Compensated Absences  

Employees of the Parish earn paid annual leave depending on employment status and length of service.  This benefit is vested when earned and unused amounts can be carried from year to year, with certain limits.  Benefits are accrued as they are earned and are reflected in the financial statements.    

Budgetary Control  

A balanced budget  is adopted annually  for  the General Fund. This  fund accounts  for  the  current general purpose operations of the Parish.  It also manages short‐term cash investments on behalf of the special purpose, trust and agency funds.  

Use of Estimates  

The preparation of financial statements in conformity with the modified cash basis of accounting requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.  

Subsequent Events  

The Parish has evaluated its subsequent events (events occurring after December 31, 2015) through the date of this report, which  represents  the  date  the  financial  statements were  available  to  be  issued,  and  determined  that  all significant events and disclosures are included in the financial statements.  

Income Taxes  

The Parish is a not‐for‐profit organization as described in Section 501(c)(3) of the Internal Revenue Code and is exempt from federal income taxes on related income pursuant to Section 501(a) of the Code.  It is the opinion of management that the Parish has no significant uncertain tax positions that would be subject to change upon examination.  

   Page 9 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS    NOTE C:     INVESTMENTS  Investments at December 31, 2015 and 2014 are as follows:                    2015      2014    Assets held in Diocesan Common Trust  $  1,351,536  $  1,441,410 Mortgage‐backed securities    3,572    4,370 Equity securities (securities‐in‐transit)    6,889    46,166 Mutual funds      125,547    424,898                    $  1,487,544  $  1,916,844   NOTE D:     LONG‐TERM DEBT  Long‐term debt at December 31, 2015 and 2014 is summarized as follows:        2015      2014    Promissory note with a bank up to $3.5 million; monthly  interest only payments at LIBOR plus 1.5% through December, 2014,  then converts to monthly interest only payments at 3.25% and  semiannual principal payments of $100,000 through July, 2020, secured by real property.  $  2,820,000  $  2,460,000       Long‐term debt is expected to mature as follows:    2016  $  200,000   2017    200,000   2018    200,000   2019    200,000   2020    2,020,000    $  2,820,000  The Parish was in compliance with all restrictive debt covenants at December 31, 2015.  Interest expense for the years ended December 31, 2015 and 2014 was $61,951 and $15,195, respectively.   

     Page 10 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS     NOTE E:      LEASE COMMITMENTS  The Parish leases certain office equipment under operating leases expiring through September, 2019.  Future minimum payments under non‐cancelable leases with initial or remaining terms of one year or more are $23,232 in 2016, $18,735 in 2017, $1,632 in 2018, and $1,224 in 2019.  Rent expense under all operating leases was $27,066 and $22,111 in 2015 and 2014, respectively.   NOTE F:      RETIREMENT PLAN  The Parish contributes to retirement plans for certain employees.  The Church Pension Fund covers stipendiary clergy who are fully vested upon ordination.  Eligible lay employees can participate in the Church Pension Fund through the Defined Contribution Retirement Plan or the Defined Benefit Retirement Plan.  These plans cover lay people employed by the Parish.  Lay employees must be 21 years of age and work a minimum of 20 hours per week for one year in order to be eligible to participate.  Participants are fully vested immediately in the defined contribution plan and after five years in the defined benefit plan.  The Parish contributes 18% of each clergy’s total annual compensation and 9% of each eligible lay employee’s annual gross salary to the Plan.  Retirement plan contributions amounted to $82,607 and $88,729 for the years ended December 31, 2015 and 2014, respectively.   NOTE G:     RELATED PARTY TRANSACTIONS  The Parish received contributions, in the aggregate, from the Vestry, Clergy, and staff of $196,783 and $129,769 in 2015 and 2014, respectively.   NOTE H:  FAIR VALUE MEASUREMENTS  Valuation techniques used to measure fair value are prioritized in the following hierarchy:  Level 1  Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in 

active markets that the Parish has the ability to access.   Level 2    Inputs to the valuation methodology include: 

Quoted prices for similar assets or liabilities in active markets; 

Quoted prices for identical or similar assets or liabilities in inactive markets; 

Inputs other than quoted prices that are observable for the asset or liability;  

Inputs  that  are  derived  principally  from  or  corroborated  by  observable market  data  by correlation or other means. 

 If the asset or  liability has a specified (contractual) term, the Level 2  input must be observable for substantially the full term of the asset or liability.  

 Level 3    Inputs to the valuation methodology are unobservable and significant to the fair value measurement. 

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CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS     NOTE H:  FAIR VALUE MEASUREMENTS  (CONTINUED)  The asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input  that  is  significant  to  the  fair  value measurement. Valuation  techniques  used  need  to maximize  the  use  of observable  inputs  and minimize  the  use  of  unobservable  inputs.  The  following  is  a  description  of  the  valuation methodologies used by the Parish for assets measured at fair value: 

 

Assets Held in Diocesan Common Trust:  These assets are held and managed in an investment pool by the Episcopal Diocese of North Carolina and consist of equities, fixed income funds, and alternative investments, primarily hedge funds.  The common trust assets are valued by estimating unit values based upon the ratio of investment pool net assets at fair value to class shares outstanding.  The fair value of equity and fixed income funds within the investment pool are determined based on the closing price reported on the active markets on which the individual securities are traded.  The fair value of the alternative  investments within the  investment pool are determined based on relevant  information available to the investment advisor such as type and nature of the investment, cost of the investment at the acquisition date, size of the investment, information from analysts, brokers, agents and market participants, and changes in market indicators.  Shares of the Diocesan Common Trust are not actively traded and can only be redeemed quarterly.  Based on fair market valuation using unit values and a quarterly  redemption  frequency,  the  Parish  has  determined  that  the  Diocesan  Common  Trust investment falls within level 2 of the fair value hierarchy.  

Mortgage‐Backed  Securities:    Government  National Mortgage  Association  (“Ginnie Mae”)  pass‐through  securities  are made  up  of  pools  of  FHA  and  VA mortgages  and  are  backed  by  the U.S. government.  These pools have coupon rates ranging from 6.0% ‐ 7.0% and maturities ranging from 2027 – 2029 and are classified within level 2 of the fair value hierarchy. 

 

Mutual Funds and Equity Securities:  Valued at the closing prices reported on the active markets on which the individual securities are traded (level 1). 

 

Beneficial  Interest  in Assets Held By Others:   Measured at  the present value of  future  cash  flows considering the estimated return on the invested assets during the expected term of the agreement, the contractual payment obligations under the agreement, and a discount rate commensurate with the risks involved.    Split‐interest  agreements  held  by  others  are  classified within  level  3  of  the  fair  value hierarchy. 

 The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of  future  fair values. Furthermore, while  the Parish believes  its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.  

          Page 12 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS     NOTE H:     FAIR VALUE MEASUREMENTS  (CONTINUED)  The following table sets forth by level, within the fair value hierarchy, the Parish’s assets measured at fair value on a recurring basis as of December 31, 2015 and 2014, respectively:  

Level 1 Level 2 Level 3 Total

2015

Investments

Assets held in Diocesan Common Trust ‐$                     1,351,536$        ‐$                     1,351,536$       

Mortgage‐backed securities ‐                       3,572                  ‐                       3,572                 

Equity securities  (securities‐in‐transit) 6,889                  ‐                       ‐                       6,889                 

Mutual funds ‐ Allocation funds 125,547              ‐                       ‐                       125,547             

132,436              1,355,108          ‐                       1,487,544         

Beneficial interest in assets held by others ‐                       ‐                       206,453              206,453             

Total assets at fair value 132,436$           1,355,108$        206,453$           1,693,997$       

2014

Investments

Assets held in Diocesan Common Trust ‐$                     1,441,410$        ‐$                     1,441,410$       

Mortgage‐backed securities ‐                       4,370                  ‐                       4,370                 

Equity securities  (securities‐in‐transit) 46,166                ‐                       ‐                       46,166               

Mutual funds ‐ Allocation funds 424,898              ‐                       ‐                       424,898             

471,064              1,445,780          ‐                       1,916,844         

Beneficial interest in assets held by others ‐                       ‐                       202,463              202,463             

Total assets at fair value 471,064$           1,445,780$        202,463$           2,119,307$       

  

The table below sets forth a summary of changes in the fair value of the Parish's level 3 assets for the years ended December 31, 2015 and 2014, respectively: 

 

2015 2014

Balance, beginning of year 202,463$           198,550$          

Change in value 3,990                  3,913                 

Balance, end of year 206,453$           202,463$           

      

          Page 13 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS     NOTE I:    RESTRICTED FUNDS  Restricted fund activity for the years ended December 31, 2015 and 2014 is as follows:   

Balance Balance Balance

January 1, Revenues/ Expenditures/ December 31, Revenues/ Expenditures/ December 31, 

2014 Transfers In Transfers Out 2014 Transfers In Transfers Out 2015

ABC Sale 720$                      31,660$                 33,500$                 (1,120)$                  26,342$                 25,000$                 222$                     

Altar Guild 6,260                     253                         830                         5,683                     9,379                     1,620                     13,442                  

Altar Guild Flower 6,941                     9,013                     10,058                   5,896                     6,937                     6,400                     6,433                    

Associate Campus Ministry Discretionary  6,322                     20,233                   15,749                   10,806                   6,324                     8,561                     8,569                    

Associate for Parish Ministry Discretionary 499                         2,353                     1,007                     1,845                     4,291                     5,734                     402                        

Associate for Pastoral Ministry  Discretionary 1,557                     8,374                     4,871                     5,060                     7,661                     4,594                     8,127                    

Buildings & Grounds Endowment 123,369                 8,688                     4,605                     127,452                 (837)                       77,116                   49,499                  

Campaign Completion 459                         ‐                          459 ‐                          ‐                          ‐                          ‐                         

Campus Ministry 79,610                   5,084                     7,703                     76,991                   (2,249)                    5,476                     69,266                  

Capital 58,415                   5,588 10,150                   53,853                   355,281 404,453                 4,681                    

Chapel Organ (63,420)                  16,884                   ‐                          (46,536)                  6,154                     ‐                          (40,382)                 

Clergy Enrichment 19,091                   90                           3,791                     15,390                   231                         ‐                          15,621                  

Community Outreach 21,565                   1,519 805 22,279                   (691)                       797 20,791                  

Cobb 188,941                 11,874                   ‐                          200,815                 (5,245)                    27,000                   168,570                

Cobb Chapel 49,738                   2,688                     ‐                          52,426                   (1,135)                    14,800                   36,491                  

Deacon J Discretionary 1,944                     11                           ‐                          1,955                     29                           ‐                          1,984                    

Designated Bequests and Gifts 2,245                     2,910                     ‐                          5,155                     14,403                   2,796                     16,762                  

Designated Offerings 3,824                     21,141                   15,798                   9,167                     19,983                   24,794                   4,356                    

Development 1,744,724             1,063,960             4,971,885             (2,163,201)            462,351                 443,291                 (2,144,141)           

Duerden 6,914                     199                         ‐                          7,113                     (10)                          ‐                          7,103                    

Elkins Rose Garden 48,436                   3,411                     1,808                     50,039                   (1,549)                    1,789                     46,701                  

Episcopal Church Women 8,473                     47                           ‐                          8,520                     128                         ‐                          8,648                    

Evangelism & University Outreach 72,468                   5,104                     2,705                     74,867                   (2,320)                    2,677                     69,870                  

French Scholarship 42,343                   2,447                     ‐                          44,790                   (938)                       ‐                          43,852                  

Gibson‐Hill Garden 40,167                   2,673                     2,106                     40,734                   (1,183)                    1,396                     38,155                  

Global Missions 1,365                     8,282                     8,150                     1,497                     111                         199                         1,409                    

Good Samaritan  1,331                     7                             ‐                          1,338                     46                           ‐                          1,384                    

House Scholarship 24,651                   1,371                     ‐                          26,022                   (507)                       ‐                          25,515                  

James Music 70,326                   25,654                   19,423                   76,557                   10,005                   16,947                   69,615                  

Lantz Scholarship 89,378                   6,090                     ‐                          95,468                   (2,639)                    ‐                          92,829                  

Library 4,922                     27                           ‐                          4,949                     75                           ‐                          5,024                    

Memorials 13,751                   8,665                     5,711                     16,705                   7,325                     11,373                   12,657                  

Mills‐Tolbert Memorial 186,826                 13,157                   6,973                     193,010                 (5,976)                    6,900                     180,134                

Outreach 413,981                 29,155                   15,451                   427,685                 (9,370)                    15,468                   402,847                

Program  172,245                 2,304                     ‐                          174,549                 6,611                     2,300                     178,860                

Rector's Discretionary 11,376                   50,227                   46,700                   14,903                   16,092                   20,872                   10,123                  

Refugee Resettlement 1,046                     31                           ‐                          1,077                     16                           ‐                          1,093                    

Shaffer 50,310                   3,209                     20                           53,499                   (1,438)                    8,567                     43,494                  

Social Ministries 6,247                     588                         ‐                          6,835                     532                         ‐                          7,367                    

Stoudemire Chapel 253,011                 17,819                   9,443                     261,387                 195                         202,836                 58,746                  

Student Mission 22,708                   18,089                   16,489                   24,308                   11,696                   18,827                   17,177                  

Thompson Clothing 6,958                     ‐                          ‐                          6,958                     175                         ‐                          7,133                    

Vestments 1,196                     25                           ‐                          1,221                     18                           ‐                          1,239                    

Worship and Program Support 72,466                   5,104                     2,705                     74,865                   (2,320)                    2,677                     69,868                  

Youth Ministry 4,512                     7,958                     9,869                     2,601                     9,749                     9,838                     2,512                    

    Totals 3,880,211$           1,423,966$           5,228,764$           75,413$                 943,733$              1,375,098$           (355,952)$            

     

          Page 14 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS    NOTE I:    RESTRICTED FUNDS  (CONTINUED)  A description of each restricted fund is as follows:  ABC Sale Fund  Program Funds  This fund supports the annual Attic, Basement, Closet (ABC) sale.  Proceeds and expenses of the sale are accounted in the income of the fund.  Outreach disbursements of the sale are accounted as expenditures.  Specifically, the amount to be disbursed is transferred to a General Fund revenue line, and the disbursements are made from the General Fund.  Altar Guild Flower Fund Other Funds with Restricted Principal  This is an agency account for St. Hilda’s Altar Guild.  It records income and expense for flowers in the church and chapel.  The restricted principal comprises separate legacies from the estates of George Edward French, Peter Pickard Wilson, and others.  Associate for Campus Ministry Discretionary Fund Clergy Discretionary Funds  

This fund is used to hold gifts and other money to be disbursed at the direction of the Associate for Campus Ministry. Funds in this account come from special gifts, including, but not limited to, gifts at weddings and funerals.  

Associate for Parish Ministry Discretionary Fund Clergy Discretionary Funds  

This fund is used to hold gifts and other money to be disbursed at the direction of the Associate for Parish Ministry. Funds in this account come from special gifts, including, but not limited to, gifts at weddings and funerals.  

Associate for Pastoral Ministry Discretionary Fund Clergy Discretionary Funds  

This fund is used to hold gifts and other money to be disbursed at the direction of the Associate for Pastoral Ministry. Funds in this account come from special gifts, including, but not limited to, gifts at weddings and funerals.  

Buildings and Grounds Endowment Permanent Endowment Funds – Buildings and Grounds Endowments  

This fund is one of the four principal endowment funds established by the vestry in March 2006. Its principal is not to be invaded. Income on that principal is available for support of the buildings and grounds of the Chapel of the Cross and is currently transferred to a revenue line in the operating budget in support of the expense lines in the operating budget that deal with the care of the buildings and grounds.  

Campaign Completion Fund  

This fund is used to track expenses related to money set aside from the Development Fund for completion of the “A Light on the Hill: Building to Serve” capital campaign activities.  It is anticipated that this fund will be eliminated once all of the money thus set aside has been expended for that purpose. 

 

    Page 15 

CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS     NOTE I:      RESTRICTED FUNDS (CONTINUED)  Campus Ministry Fund Permanent Endowments – Evangelism and University Outreach Endowments  This fund was established with an initial gift of $10,000 from Frank Kenan in support of the parish’s campus ministry program. It has been augmented from time to time with the proceeds of legacies.  Principal and income of the fund are designated by vestry action for campus ministry. The income on the principal is currently being transferred to a revenue line in the operating budget in support of the expense lines in the operating budget that deal with campus ministry activities.  Capital Fund Program Funds  This  fund was established by  the vestry as a principal destination  for gifts  for capital purposes  that are otherwise unrestricted. It has no principal and its income is available to the vestry for capital expenditures.  Chapel Organ Fund Program Funds  This fund is used to track the income and expenses incurred in support of the acquisition and installation of the Dobson organ in the chapel.  Clergy Enrichment Fund Program Funds  This fund was established by a bequest from Jane Bergsten for support of clergy enrichment activities.  The bequest was not restricted and the entire fund is available for expenditure for clergy enrichment.  Cobb Fund Permanent Endowments – Buildings and Grounds Endowments  This fund supports the upkeep of the parish buildings and grounds.  It was established by gifts from Collier Cobb, Jr., Emma Estes Cobb, and Mary Louisa Cobb. Principal may not be invaded. Income is restricted to building and grounds expenses other than normal routine maintenance.  Collier and Carolyn Cobb Chapel Fund Permanent Endowments – Buildings and Grounds Endowments  This fund supports the maintenance of the chapel and was established by a gift from Collier Cobb III and Carolyn Cobb.  Additional gifts from time to time have augmented the fund. Original principal may not be invaded. Income is available for maintenance of the chapel.   

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CHAPEL OF THE CROSS  NOTES TO FINANCIAL STATEMENTS    NOTE I:      RESTRICTED FUNDS (CONTINUED)  Community Outreach Endowment Permanent Endowments – Community Outreach Endowments  This fund is one of the four principal endowment funds established by the vestry in March 2006. Its principal is not to be invaded. Income on that principal is available for support of community outreach activities and is currently transferred to a revenue line in the operating budget in support of the expense lines in the operating budget that deal with community outreach activities.  Deacon J Discretionary Fund Clergy Discretionary Funds  This fund is used to hold gifts and other money to be disbursed at the direction of the deacon designated as Deacon J. Funds in this account come from special gifts and from a small allocation from the operating budget.  Designated Bequests and Gifts Fund Program Funds  This fund is a repository for bequests and gifts specifically designated for a unique purpose but not large enough to justify the  establishment  of  a  separate  fund.    These  funds  are  limited  for  expenditures  in  accordance with  the donor’s instructions.  Designated Offerings Fund Program Funds  This fund is used to hold gifts and offerings designated for other agencies.  Examples of offerings placed in this fund include the Good Friday Offering which is transmitted to Episcopal Relief and Development in support of the work of the Church in Jerusalem; the offering at the Bishop’s Visitation, which is transmitted to his discretionary fund; the Mother’s Day offering, which is transmitted to Penick Village; the Thanksgiving offering, which is transmitted to Thompson Child and Family Focus; other offerings collected for transmission beyond the parish.  Development Fund Program Funds  This fund is currently used to track income, expenses, loan liabilities, and cash and other assets related to the master planning and construction project currently underway.   This project encompasses a new  fellowship hall and other facilities under the project title “A Light on the Hill: Building to Serve.”  

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CHAPEL OF THE CROSS  NOTES TO FINANCIAL STATEMENTS    NOTE I:      RESTRICTED FUNDS (CONTINUED)  Duerden Fund Permanent Endowments – Worship and Program Support Endowments  This  fund  holds  a  legacy  received  for  the  purpose  of maintaining  the  grave  of  the  testator’s  infant  child  and supplementing the Rector’s salary. Principal may not be invaded. Income is available for the stated purposes.  Elkins Rose Garden Fund Permanent Endowments – Buildings and Grounds Endowments  This fund was established by a gift in memory of Shirley Elkins for the establishment and maintenance of a memorial rose garden. After the  initial costs of establishing the rose garden were paid, the remainder was set aside as restricted principal and the income from that principal is used to support the maintenance of the Rose Garden through transfer of the income to the operating budget.  Episcopal Church Women Fund Program Funds  This fund was established to hold the funds accumulated by the Episcopal Church Women of the Chapel of the Cross when that organization became inactive.  Evangelism and University Outreach Endowment Permanent Endowments – Evangelism and University Outreach Endowments  This fund is one of the four principal endowment funds established by the vestry in March 2006. Its principal is not to be invaded. Income on that principal is available for support of evangelism and university outreach activities and is currently transferred to a revenue line in the operating budget in support of expense lines in the operating budget that deal with evangelism and university outreach activities.  French Scholarship Fund Permanent Endowments – Evangelism and University Outreach Endowments  This fund holds a  legacy from George Edward French to be used for support of scholarships to university students. Principal may not be invaded. Income is used to fund scholarships awarded by the vestry to university students.  Gibson‐Hill Garden Fund Permanent Endowments – Buildings and Grounds Endowments  This fund supports the maintenance of the garden in front of the chapel. It was established by a gift from Anne G. Hill in memory of her parents, Mr. and Mrs. Philip Pendleton Gibson. Principal may not be invaded. Income is available for maintaining the garden in front of the chapel. Income on the principal is currently transferred to an operating budget revenue line in support of the expense lines in the operating budget that deal with garden maintenance activities.   

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CHAPEL OF THE CROSS  NOTES TO FINANCIAL STATEMENTS    NOTE I:      RESTRICTED FUNDS (CONTINUED)  Global Missions Fund Program Funds  This fund is used to account for the income and expenses related to Global Mission Trips and other activities of the Global Mission Committee in support of global missions.  Good Samaritan Fund Program Funds  This fund is used to account for gifts designated for the work of the Good Samaritan Guild and their expenditure.  House Scholarship Fund Permanent Endowments – Evangelism and University Outreach Endowments  This fund holds a legacy from the estate of Helen Badham House to be used for support of scholarships to university students. Its full name is the Helen Badham House and Henry Charles House Scholarship Fund. Principal may not be invaded. Income funds scholarships awarded by the vestry to university students.  James Music Fund Other Funds with Restricted Principal  This fund supports the music program of the parish. It was established by a gift for the music program in memory of Lydia E. James, a long time member of the Senior Choir. It was augmented in 1997 by a restricted gift from Stephen Kahler in honor of his mother, Janet Gregory Kahler.  It has also been augmented from time to time by other gifts designated for the music program,  including the  loose offerings at designated special music services, and by fund raising activities related to the music program.  The restricted portion of the principal may not be invaded. The remaining principal is not likely to be invaded. Income is available for support of the music program.  Lantz Scholarship Fund Other Funds with Restricted Principal  This  fund  supports participation by parishioners and  staff  in various  conferences and  training activities and other educational activities related to the parish.  It was established by a gift from the estate of Priscilla Lantz designated for the “scholarship fund”. Principal is restricted by the vestry; income is available to support the purposes of the fund.  Currently, a portion of the income is used to support the Convention Delegates expense line in the operating budget.  Library Fund Program Funds  This fund supports the work of the parish librarian and the maintenance of the parish library. Income for this fund comes from special gifts and from fund raising activities such as book table sales.   

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CHAPEL OF THE CROSS  NOTES TO FINANCIAL STATEMENTS    NOTE I:      RESTRICTED FUNDS (CONTINUED)  Memorials Fund Program Funds  This fund holds memorial gifts made in memory of persons who have died and, in a few cases, gifts in honor of persons still living, pending vestry decision as to the ultimate use of the gifts. It also holds money given by families to support the engraving of names of those whose ashes are buried in the churchyard.   Mills‐Tolbert Memorial Fund Permanent Endowments – Community Outreach Endowments  The Mills‐Tolbert Memorial Fund was established by a bequest from Bobby Gene Mills to be used for “feeding the poor.” Principal  is  not  to  be  invaded.  Income  is  available  to  support  outreach  activities.  The  income  is  currently  being transferred to a revenue line in the operating budget in support of the expense lines in the operating budget that deal with outreach activities.  Outreach Fund Other Funds with Restricted Principal  The principal and income of this fund have been designated by the vestry to support work outside the parish.  The original principal of this fund came from undesignated gifts and bequests. A portion of this principal was then used to establish initial funding for the Community Outreach Endowment. Income is currently transferred to a revenue line in the operating budget in support of the expense lines in the operating budget that deal with outreach activities.  Program Fund Program Funds  This fund was established by the vestry as a principal destination for gifts for general purposes that are unrestricted. It has no principal and its income is available to the vestry for expenditures in support of any parish program. 90% of totally undesignated bequests and extraordinary gifts are placed in this fund, with the other 10% going to the Social Ministries Fund for expenditure outside the parish.  Rector’s Discretionary Fund Clergy Discretionary Funds  This fund is used to hold gifts and other money to be disbursed at the direction of the Rector. Funds in this account come from special gifts, including, but not limited to, gifts at weddings and funerals. Other funding comes from a transfer of $300 per month from plate offering.  Refugee Resettlement Fund Program Funds  This fund is used to account for gifts and expenditures in support of refugee resettlement activities of the parish.  

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CHAPEL OF THE CROSS  NOTES TO FINANCIAL STATEMENTS    NOTE I:      RESTRICTED FUNDS (CONTINUED)  Shaffer Fund Permanent Endowments – Worship and Program Support Endowments  This fund was established by a bequest from Charlotte W. Shaffer for support of St. Hilda’s Altar Guild activities beyond the scope of the regular operating budget. Principal is restricted by the donor. Income is available for use in supporting Altar Guild activities.  Social Ministries Fund Permanent Endowments – Community Outreach Endowments  This fund is used to account for gifts and expenditures for support of social ministry activities. Its principal originated with a restricted gift for such purposes. Income may be used for any social ministry activity designated by the vestry. This fund is also used to hold the tithes of undesignated bequests and gifts that are to be used for work outside the parish while awaiting specific vestry designation.  A portion of these memorial gifts are being used to support the outreach to the Episcopal Church of the Advocate through the operating budget.  Stoudemire Chapel Fund Permanent Endowments – Buildings and Grounds Endowments 

 This fund was established by a bequest from Mary Arthur Stoudemire for the care of the chapel. The Chapel Fund, established by an anonymous gift for the same purpose, was combined by vestry action with the Stoudemire Fund. An additional  gift was  added  from  the Mills‐Tolbert  bequest.  Principal may  not  be  invaded.  Income  is  available  for maintenance and care of the chapel.  Student Mission Fund Program Funds  This fund is used to account for mission trips and special projects conducted as a part of the campus ministry program.  Thompson Clothing Fund Program Funds  This fund is used to account for the gifts and expenditures for clothing for the children of the Thompson Child and Family Focus organization.  Vestments Fund Program Funds  This fund is used to account for special gifts designated for the purchase or maintenance of liturgical vestments.  

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CHAPEL OF THE CROSS NOTES TO FINANCIAL STATEMENTS    NOTE I:      RESTRICTED FUNDS (CONTINUED)  Worship and Program Support Endowment Permanent Endowments – Worship and Program Support Endowments  This fund is one of the four principal endowment funds established by the vestry in March 2006. Its principal is not to be invaded. Income on that principal is available for support of worship and program support activities and is currently transferred to a revenue line in the operating budget in support of the expense lines in the operating budget that deal with worship and program support activities.  Youth Ministry Fund Program Funds  This fund is used to account for contributions and fund raising projects for youth ministry.  It is used to account for youth mission trips and to provide additional resources for youths in financial need to participate in youth activities. 

  

 

     date, 2016   

To the Vestry Chapel of the Cross Chapel Hill, North Carolina   

We have audited the financial statements of Chapel of the Cross (“Parish”) for the year ended December 31, 2015, and have  issued  our  report  thereon  dated  date,  2016.    Professional  standards  require  that  we  provide  you  with  the information about our  responsibilities under U.S. generally accepted auditing  standards, as well as certain  information related to the planned scope and timing of our audit.  We have communicated such information in our letter to you dated May 20, 2016.  Professional standards also require that we communicate to you the following information related to our audit.  Significant Audit Findings  Qualitative Aspects of Accounting Practices  Management  is  responsible  for  the  selection  and  use  of  appropriate  accounting  policies.    The  significant  accounting policies used by the Parish are described in Note B to the financial statements.  No new accounting policies were adopted and  the  application  of  existing  policies was  not  changed  during  the  year  ended  December  31,  2015.   We  noted  no transactions entered  into the Parish during the year for which there  is a  lack of authoritative guidance or consensus.   All significant transactions have been recognized in the financial statements in the proper period.   Accounting  estimates  are  an  integral  part  of  the  financial  statements  prepared  by management  and  are  based  on management’s knowledge and experience about past and current events and assumptions about future events.  Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected.   The most sensitive estimates affecting the financial statements were:  

Management’s estimate of the fair market value of the beneficial interest in assets held by others is based on management’s expectations on the expected rate of return of the underlying assets, a 5% discount rate and applicable mortality tables.  We evaluated the key factors and assumptions used to determine the fair market value of the beneficial interest in assets held by others and determined that they were reasonable in relation to the financial statements taken as a whole.  

Management’s estimate of the fair market value of the investments in mutual funds, equity securities, and mortgage‐backed securities is based on independent valuations from financial advisors outside of Chapel of the Cross. The valuations are based on professional experience and fair market values of the underlying investments at year end. 

 Difficulties Encountered in Performing the Audit  We encountered no significant difficulties in dealing with management in performing and completing our audit.  

Chapel of the Cross date, 2016 Page 2   Corrected and Uncorrected Misstatements  

Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those  that  are  trivial,  and  communicate  them  to  the  appropriate  level  of  management.    The  attached  schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. 

 Disagreements with Management  For purposes of  this  letter, professional  standards define a disagreement with management as a  financial accounting, reporting,  or  auditing matter, whether  or  not  resolved  to  our  satisfaction,  that  could  be  significant  to  the  financial statements or the auditor’s report.  We are pleased to report that no such disagreements arose during the course of our audit.  Management Representations  We have requested certain representations from management that are included in the management representation letter dated [date], 2016.  Management Consultations with Other Independent Accountants  In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations.  If a consultation involves application of an accounting principle to the Parish’s  financial  statements or a determination of  the  type of auditor’s opinion  that may be expressed on  those statements,  our  professional  standards  require  the  consulting  accountant  to  check  with  us  to  determine  that  the consultant has all the relevant facts.  To our knowledge, there were no such consultations with other accountants.  Other Audit Findings or Issues  We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior  to  retention as  the Parish’s auditors.   However,  these discussions occurred  in  the normal course of our professional relationship and our responses were not a condition to our retention.  During our audit, we inquired of management about prior year deficiencies in internal control that were identified, other than significant deficiencies or material weaknesses, and other matters that were opportunities for strengthening internal controls and operating efficiency: 

 

Written accounting policies and procedures need to be updated to reflect the Parish’s current accounting practices ‐ 

Accounting policies and procedures are  currently being updated, with  final policies and procedures documentation 

finished by the end of the 2016 fiscal year. 

Job  descriptions  for  Clergy,  Staff,  Vestry,  and  Volunteers  needs  to  be  updated  ‐  Job  descriptions  have  been 

adequately updated for the clergy, staff, vestry and volunteers. 

Spending policies for the restricted funds need to be updated to reflect current Parish practices ‐ These policies are 

currently being reviewed by Parish management, with a goal of completion by the end of the 2016 fiscal year. 

 

    

Credit card purchases supporting documentation ‐ It was noted during prior audits that supporting documentation for 

several  credit  card purchases was missing. This has been an ongoing  issue over  the past  several  years. During our 

current year testing, we noted that, although supporting documentation was provided to the accounting staff, some of 

this documentation was not provided in a timely manner.  The Parish should continue to stress to staff the importance 

of providing the accounting staff with supporting documentation for credit card purchases in a timely manner. 

 This information is intended solely for the use of the Vestry and Finance Committee of the Chapel of the Cross and is not intended to be and should not be used by anyone other than these specified parties.  Sincerely,    BUTLER + BURKE, LLP