Anonymous-Minder Blows Smoke

Anonymous has left a new comment on your post "Will SP Schroeder Be A Good Leader?":

The Kuske report never said tuition money was used for something other than the schools. If it did, he was wrong. All the tuition money goes to the schools. Unfortunately, this money is not enough to cover expenses. Synod subsidy was decreased from the schools.

Good work Mr. Jackson. Your fact checking makes we wonder if you work for the New Republic.

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GJ - I suggest Anonymous-Minder reading what he pretends to cite. More money was collected in the name of the schools than forwarded to the schools. I am no accountant, and many things remain - shall we say - mysterious. The same can be said for many funds, which remain borrowed, as they used to say at Gurgel-Mueller's WELS-Enron.

Where did all that Schwan money go?

Verbatim from the Kuske Report:

http://ichabodthegloryhasdeparted.blogspot.com/2007/05/kuske-report-on-wels-mismanagement.html

1. More work of the Synod was moved off-budget (e.g. evangelism and youth ministry, which are now funded by the Revolving Funds) so that the non-recurring income and its income were reduced even more.
2. The world missionary corps was reduced by 17, but there were still more world missionaries in 2003 than in 1995. (Appendix D)
· The Board for Ministerial Education (BME) bore a disproportionately large proportion of the cutbacks.
1. The budget cutting for the BME was approximately doubled in percentage because the money that parents/students paid for tuition/fees was commingled with CMO. Details and illustrations are on Page 7.
2. The funds that had been given directly to the schools and were therefore in the Revolving Funds, were used to balance the budget over the last couple of years. (See Appendix C.)
3. After $20,000,000+ of these non-recurring funds was spent, it has been suggested that the schools should solicit a $300,000,000.00 trust fund to keep themselves going.
· In its November meeting the SC was planning to spending $5.8 million more of non-recurring funds. Of that amount only $2.6 million will be used to fund the prep school for one more year. Prior to that, the recommendation was made to defund the prep schools almost immediately, even though they serve a very significant function of recruiting and training (especially) future pastors, teachers, and lay ministers. (See Appendix I.)
· After serious consideration was given to defunding the prep schools, the SC and the President of the Synod decided to explore alternate methods of recruiting workers. (See Appendix I.)


And...

COMMINGLED NET COST TO BUDGET
Expenditures, BME $30,581,481 Expenditure, BME $30,581,481
Subtract tuition and fees ($13,507,707)
Subtract Activity fees1 ($2,000,000)
Net cost $30,581,481 Net cost $15,073,774
x 25% x 25%
Budget cut at 25% 2$7,645,370 Budget cut at 25% 23,768,443
1 Since I know of nothing outside of the BME that has “activity fees,” I have assigned $2 million here of the $14+ million reported for “Activity Fees And Retail Sales.”
2 In this illustration the difference between $7.6 million and $3.7 million is the distortion that would have occurred because of imprudently commingling tuition with CMO.

As shown in the chart, when the budget cuts were applied, a highly disproportionate reduction in the support provided to the Synodical schools occurred. Some of the budget shortfall was covered by increasing tuition and fees. As a result parents were expected, not only to offer their children for strong encouragement toward full-time ministry, but also to increase payments to the schools sharply. Many apparently could not afford the increases. Enrollments have dropped. The dropping enrollment adversely impacted the funding of the school even further. Since the decreased enrollment was caused ultimately by the imprudent use of non-recurring funds, as explained above, it is disingenuous to now fault the schools for the drop and therefore withdraw even more support.

The revolving funds, especially of WLS and MLC, were used to support the budget
After the predicted drop in enrollment became reality, the SC turned to another direction. The schools of the BME (especially WLS and MLC) had over the years received donations that weren’t specifically designated. These non-recurring funds were next used to shore up the Synod’s budget. The amounts that were taken from these non-recurring funds crept up from about $4 million to $13 million. Details are in Appendix C. The term to accomplish this transfer of funds is “reclassification.” The mechanism that makes it difficult to follow this reclassification (which was done openly in the 2003 report) is that the amount from income used for BME is reported in the Operating Budget. That amount plus the amounted used from non-recurring funds is reported as the total expenditure for BME in the report of Consolidated Statement of Financial Position. (See Appendix C.)