Decision Number 332

Ruling by Bishop W. Kenneth Goodson Regarding Annual Conference Authority to Direct That a Service Charge of 2% Be Imposed Upon Funds Received by Its Conference Treasurer from Local Churches for Conference Benevolences.

Digest

An Annual Conference possesses authority to direct that a 2% service charge be withheld from amounts received from local churches for conference benevolences as a means of supporting the expenses of the office of a conference treasurer, provided such charge is not applied to funds collected for world service or administered in a manner so as to effect a change in the ratio for world service established by the Annual Conference in the combined budget for world service and conference benevolences.

Statement of Facts

At the June, 1970 session of the Alabama-West Florida Annual Conference, a report was received from its Commission on World Service and Finance proposing a levy of a 2% service charge on amounts paid in for conference benevolences by local churches, to be applied to covering the expenses of the conference treasurer.

The filing of the report was accompanied by a request for an episcopal ruling whether the proposed service charge would violate provisions of the Discipline, particularly Paragraph 910 thereof which provides the manner by which a conference treasurer shall distribute amounts received from the local churches under the combined world service and conference benevolence budget prescribed by Paragraph 849 of the Discipline. The presiding bishop, Bishop W. Kenneth Goodson, ruled that a decision to levy such a service charge was within the authority of the Annual Conference; that nothing provided in Paragraph 910 of the Discipline prohibited an Annual Conference from establishing such a service charge.

Jurisdiction

This matter properly comes before the Judicial Council under the provisions of Paragraph 1712 of the 1968 Discipline.

Analysis and Rationale

The fundamental question in this proceeding is whether an Annual Conference which chooses not to budget the costs of the office of conference treasurer in its general administration budget together with other conference operating expense, choosing instead to levy a 2% service charge on amounts received from local churches for conference benevolences, violates any provision of the Discipline applicable to procedures governing the administration of the single world service and conference benevolence budget required by Paragraph 849 of the Discipline.

The Annual Conference is the basic body of the Church, possessing all rights not delegated to the General Conference under the Discipline or not limited by authorized General Conference action. (See Judicial Council Decision No. 78.)

Paragraph 662 of the Discipline, "Powers and Duties," provides:

" (1) The Annual Conference for its own government may adopt rules and regulations not in conflict with the Discipline of The United Methodist Church; . . ."

The Alabama-West Florida Annual Conference, therefore, possesses authority to adopt the regulation proposed by its Commission on World Service and Finance establishing a 2% service charge on conference benevolence receipts unless such fiscal regulation is barred or limited by a Disciplinary provision. We find no such bar or limitation on the discretion of the Alabama-West Florida Annual Conference.

While the Council on World Service and Finance advocates that Annual Conferences provide for the expenses of the conference treasurer separately in their general administration budgets, the General Conference has not seen fit to mandate a uniform procedure in that regard. We do not interpret Paragraph 912 of the Discipline, whereby the Council on World Service and Finance is required to provide forms for uniform financial reporting, as evidencing any such mandate; nor does Paragraph 912 vest in the Council on World Service and Finance power to require Annual Conferences to conform in all respects to uniform fiscal procedure to be laid down by the council.

The question thus remaining to be answered, in the absence of any express Disciplinary restriction, is whether the proposed procedure would operate indirectly to violate any basic financial, church-wide policies which would require us to rule against the proposed Annual Conference action. We do not find any such violation.

The fact that the proposed service charge is levied on Annual Conference benevolence funds collected under a combined world service and conference benevolence budget does not necessarily conflict with the procedure outlined in Paragraph 910 of the Discipline governing administration of that budget.

Paragraph 910 of the Discipline provides:

"All amounts contributed in each local church for world service and conference benevolences shall be remitted monthly by the local church treasurer to the conference treasurer, who shall each month divide the total amount thus received, setting aside the proper amount for world service and the proper amount for conference benevolences, according to the ratio of each established by the Annual Conference in the total world service and conference benevolence budget. He shall make monthly remittances of the share received by him for conference benevolences to the treasurers of the several agencies for conference work according to the rightful share and proportion of each. He shall remit monthly to the treasurer of the Council on World Service and Finance the total share received by him for world service. When the amount contributed during the year for world service and conference benevolences exceeds the amount apportioned to or accepted by the Annual Conference, the entire share contributed for world service shall be remitted in regular order to the treasurer of the Council on World Service and Finance before the end of the fiscal year."

We assume that the levying of the 2% service charge will be as fully disclosed as are the other details of the conference benevolence budget in all information given local churches. This will make it clear that contributions for conference benevolences will be subject to the 2% service charge.

The proposed service charge by its terms is not applicable to funds received by the conference treasurer for transmission to the Council on World Service and Finance. It is applicable only to funds collected for conference benevolences. Thus, nothing in the proposed service charge would directly or indirectly operate to impair the integrity of the world service funds. Were it otherwise the proposal would be contrary to the fundamental policy of church-wide application set forth in Paragraph 861 of the Discipline.

As we interpret it, the 2% service charge would not be added and budgeted as a percentage of the total world service and conference benevolence budget; therefore it would not subject the ratio between world service funds and conference benevolence funds to any arbitrary change prejudicial to world service.

It is the policy of the Church that contributions to benevolences shall not be used for any purpose other than those causes for which given. Withholding an amount deemed by the Annual Conference to be reasonably related to the costs of collecting and remitting of benevolence funds is not viewed by us as a wrongful diversion. We assume that the conference action would be predicated on a determination that the 2% charge is reasonably related to the cost of receiving, administering and distributing conference benevolence funds, and is designed to be in aid, not in derogation, of particular benevolent causes.

Decision

The Ruling by Bishop W. Kenneth Goodson is hereby affirmed.

Concurring Opinion

Since under Paragraph 1712 this decision of the Judicial Council on review of the ruling of the bishop on question of law becomes the law of the church, we deem it appropriate to state our reservations in sustaining the basic holding in this matter that an Annual Conference approved levy or service charge is within its authority and does not violate Paragraph 910.

The Discipline does not require an Annual Conference to adopt a general administration fund, comparable to that required for the General Church in Paragraph 879. However, we believe an Annual Conference should pursue practices which are designed to achieve economy, efficiency and uniformity.

A policy or practice of making percentage service charges on funds for administrative purposes should not be encouraged. Moreover, the Discipline does charge the Conference Commission on World Service and Finance with duties that should be followed in determining and financing administrative costs.

Paragraph 900 provides: "The commission (sic Conference Commission on World Service and Finance) shall make diligent effort to secure full information regarding conference benevolence and service causes . . . and shall recommend to the Annual Conference for its action and determination the total amount to be apportioned for conference causes and included in the conference benevolence budget. (emphasis added)

We believe "service causes" would include administration expenses incident thereto.

Paragraph 901 provides: "The commission shall also recommend to the Annual Conference for its action and determination the amount or the percentage of the total sum of the conference benevolence budget which shall be apportioned to each cause included in the said budget."

This suggests that when a conference treasurer has furnished information to the Conference Commission as to the costs to his office of servicing and distributing the conference benevolences and its agencies, and the Annual Conference approves the amount thereof and includes it in the benevolence budget under Paragraph 900; then the Commission, under Paragraph 901, may recommend the percentage of the total conference budget to be apportioned for such service costs. This would avoid the fear that such a levy or service charge may result in skimming or permit diversion of benevolence funds.

HOOVER RUPERT THEODORE M. BERRY