I'm going to repost this from a reply I made to a discussion on the Facebook post, linking to the Substack entry here; it's about the suggestion that our problems have been due to "the Ohio way" including a preference for our own perhaps peculiar ways of accounting -- which is not my read of the documents I have had access to or possess copies of. Anyhow, my full reply was:
With respect, the problems [of Ohio bookkeeping] are not ones of anyone's unique or esoteric accounting. It's about doing with money what we say we're doing. If we say we're putting 3% of remittances towards a particular mission or purpose, and we put a set figure with three zeros at the end for ten years in a row towards that program or recipient group, we're not doing what we say we're doing. If we say 10% of a campaign goes to something, but then put a sum designated by a working group or board to that as the final accounting is worked out, the CPA is not the problem. And continuity isn't the problem, it's the puzzle: if the board turned over every year, I'd understand how no one noticed the annual deficit figure if the senior executives (president and treasurer) don't highlight it, but if you have the same people on the board or later council for many years, and each year the year end report shows a higher expense total than income . . . that's not an accounting problem. If every year a budget is approved with the administrative note in the minutes "we expect giving to increase next year," if there are people serving more than three years at a stretch, then it's the board/council members's responsibility to say "hold on, why do we think that?" and "how many years have we said that in a row and it hasn't?" That's what a board is for. In 2016, they started doing so explicitly, and the edifice crumbled quickly . . . to reveal in 2017 it was gone. So to sum up: were the annual deficits hidden? I would agree they were neither highlighted nor emphasized, but again, that's what a board is for. And in the Wells CPA audit documents year on year, the "not a going concern" caution was stated annually for many years. Should the president and treasurer have said more loudly and clearly "make me cut this budget more?" Not sure that's entirely fair. And I think there was hope, if poorly supported hope, that *next* year would be better . . . and if you've been reading, there's one strand of my analysis: we spent too many years thinking it would get better next year, because of the "weight" of 1945-1985 with giving increasing nearly without a break each year, then ten years of up and down though mostly down (yet we treated the ups as normal and the downs as exceptions, because of that forty year steady increase behind us). By 1995, there was clear evidence in our numbers -- members, baptisms, worship attendance, registrations, and yes, giving -- that the trend was heading down. Why we resisted looking at it closely is how we got to the deep instability of 2002-2008 I'm describing now (Disciple Magazine, NBA/Cleveland Christian Home, revamped BMF to DMF, capital campaign concerns), which allowed us to run the ship up on the rocks of the massive 2008-2009 stock market crash, which turned a large but sustainable 4-5% draw on invested funds overnight into a 7-10% draw without changing the amount withdrawn annually. And if you keep drawing at that rate, you find an endless pot of trust funds quickly drops to empty . . . or at least in 10 years it does.
Okay. I've already been asked what I meant by "inefficiencies were abundant" regarding camp. Happy to clarify, sort of. What I mean is that it quickly became apparent that congregations could hold a weekend, and drop it on a week's notice, with no money down and no penalty for changing plans. Congregations also expected the entire camp to be empty even if they just had a dozen or two in the Monroe Lodge; definitely anyone using the lodge expected to be the only occupants, even if they had eight paying guests. The process for reserving camp in the September to May so-called "off season" was . . . odd, and also apparently not open to adjustment. And about half a dozen churches had control of some key dates, but they paid at most for the per head guests they brought to camp. In general, my impression (and this WAS twenty years ago) has been that when in doubt, churches paid the least possible amount so if people left early, the fees went down, but in general they held and controlled dates and site use and had maximal expectations for support. Suggestions that the reservation system be revised and amended towards a more cost-conscious set-up were not well received, even though the evidence was clear that formerly forty person weekends were more often dozen paying guest weekends, etc., and that we were turning down possible rentals for large outside groups in order to keep the date open for unconfirmed recurring retreats. Much of this changed over the next ten years, and I at least like to think we started to push that door open, but we certainly did not go through it in 2003.
I'm going to repost this from a reply I made to a discussion on the Facebook post, linking to the Substack entry here; it's about the suggestion that our problems have been due to "the Ohio way" including a preference for our own perhaps peculiar ways of accounting -- which is not my read of the documents I have had access to or possess copies of. Anyhow, my full reply was:
With respect, the problems [of Ohio bookkeeping] are not ones of anyone's unique or esoteric accounting. It's about doing with money what we say we're doing. If we say we're putting 3% of remittances towards a particular mission or purpose, and we put a set figure with three zeros at the end for ten years in a row towards that program or recipient group, we're not doing what we say we're doing. If we say 10% of a campaign goes to something, but then put a sum designated by a working group or board to that as the final accounting is worked out, the CPA is not the problem. And continuity isn't the problem, it's the puzzle: if the board turned over every year, I'd understand how no one noticed the annual deficit figure if the senior executives (president and treasurer) don't highlight it, but if you have the same people on the board or later council for many years, and each year the year end report shows a higher expense total than income . . . that's not an accounting problem. If every year a budget is approved with the administrative note in the minutes "we expect giving to increase next year," if there are people serving more than three years at a stretch, then it's the board/council members's responsibility to say "hold on, why do we think that?" and "how many years have we said that in a row and it hasn't?" That's what a board is for. In 2016, they started doing so explicitly, and the edifice crumbled quickly . . . to reveal in 2017 it was gone. So to sum up: were the annual deficits hidden? I would agree they were neither highlighted nor emphasized, but again, that's what a board is for. And in the Wells CPA audit documents year on year, the "not a going concern" caution was stated annually for many years. Should the president and treasurer have said more loudly and clearly "make me cut this budget more?" Not sure that's entirely fair. And I think there was hope, if poorly supported hope, that *next* year would be better . . . and if you've been reading, there's one strand of my analysis: we spent too many years thinking it would get better next year, because of the "weight" of 1945-1985 with giving increasing nearly without a break each year, then ten years of up and down though mostly down (yet we treated the ups as normal and the downs as exceptions, because of that forty year steady increase behind us). By 1995, there was clear evidence in our numbers -- members, baptisms, worship attendance, registrations, and yes, giving -- that the trend was heading down. Why we resisted looking at it closely is how we got to the deep instability of 2002-2008 I'm describing now (Disciple Magazine, NBA/Cleveland Christian Home, revamped BMF to DMF, capital campaign concerns), which allowed us to run the ship up on the rocks of the massive 2008-2009 stock market crash, which turned a large but sustainable 4-5% draw on invested funds overnight into a 7-10% draw without changing the amount withdrawn annually. And if you keep drawing at that rate, you find an endless pot of trust funds quickly drops to empty . . . or at least in 10 years it does.
Okay. I've already been asked what I meant by "inefficiencies were abundant" regarding camp. Happy to clarify, sort of. What I mean is that it quickly became apparent that congregations could hold a weekend, and drop it on a week's notice, with no money down and no penalty for changing plans. Congregations also expected the entire camp to be empty even if they just had a dozen or two in the Monroe Lodge; definitely anyone using the lodge expected to be the only occupants, even if they had eight paying guests. The process for reserving camp in the September to May so-called "off season" was . . . odd, and also apparently not open to adjustment. And about half a dozen churches had control of some key dates, but they paid at most for the per head guests they brought to camp. In general, my impression (and this WAS twenty years ago) has been that when in doubt, churches paid the least possible amount so if people left early, the fees went down, but in general they held and controlled dates and site use and had maximal expectations for support. Suggestions that the reservation system be revised and amended towards a more cost-conscious set-up were not well received, even though the evidence was clear that formerly forty person weekends were more often dozen paying guest weekends, etc., and that we were turning down possible rentals for large outside groups in order to keep the date open for unconfirmed recurring retreats. Much of this changed over the next ten years, and I at least like to think we started to push that door open, but we certainly did not go through it in 2003.