2005 Auditors Report [errata] For 2008 Journal

INDEPENDENT AUDITOR’S REPORT

Tennessee Annual Conference of the United Methodist Church Council on Finance and Administration Nashville, Tennessee

I have audited the accompanying statement of financial position of the Conference Treasurer of the Tennessee Annual Conference of the United Methodist Church as of December 31, 2005, and the related statements of activities and cash flows and the details of transactions in restricted funds and the schedule of general and administrative expenses for the year then ended. These financial statements are the responsibility of the Conference Treasurer. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Conference Treasurer as of December 31, 2005 and the changes in net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

s/Nancy C. Crabtree, CPA

Nashville, Tennessee October 10, 2007

Page 213-A

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2005

ASSETS Current Assets: Cash and securities purchased under agreement to repurchase Support and revenue receivable Marketable securities Investment management accounts Total Current Assets Other Assets: Participation certificates Total Assets

$

416076 1518466 816000 1473565

$

4224107

$

242447

$

4466554

LIABILITIES AND NET ASSETS

Current Liabilities: Program funds payable Total Current Liabilities / Total Liabilities Net Assets: Unrestricted Temporarily restricted Permanently restricted

$

803672

$

803672

$ (

105625) 3343507 425000

Total Net Assets

$

3662882

Total Liabilities and Net Assets

$

4466554

See accompanying notes to the financial statements. -2-

Page 213-B

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2005

Unrestricted Revenues and Other Support: Contributions from districts, charges & churches Interest Other support & revenue

$

Total Revenues and Other Support

Expenses: Program Services General and administrative services

$

Restricted

43962 111304

$ 12843704 4850 3654923

$ 12843704 48812 3766227

155266

$ 16503477

$ 16658743

$ 16446810

$ 16446810 461194

$ 16446810

$ 16908004

$ ( 249261)

$ 461194

Total Expenses

$

Total

461194

Increase (Decrease) in Net Assets

$ ( 305928)

$

Other Increase (Decrease) in Net Assets: Transfers applied to Conference Administration Net appreciation (depreciation) of investments

$ 238164

$ ( 238164) 13671

$

$ 238164

$ ( 224493)

$

Net Assets at the beginning of the year

$( 37861)

$ 3936333

$ 3898472

Net Assets at the end of the year

$( 105625)

$ 3768507

$ 3662882

Total Other Increases (Decreases) In Net Assets

See accompanying notes to the financial statements. -3-

Page 213-C

56667

13671

13671

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER STATEMENT OF GENERAL AND ADMINISTRATION EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2005

OFFICE OF ADMINISTRATIVE SERVICES: Salaries and benefits Travel Computer services Printing and supplies Telephone Postage Equipment service Audit and accounting Payroll processing Other

$ 208421 8327 4259 3859 4052 4656 155 950 9551 898 Total

$ 245128

OTHER GENERAL AND ADMINISTRATIVE SERVICES: Conference secretary Conference sessions Conference journal Liability insurance Payroll deductions Conference contingency Total

Total General and Administrative Expenses

See accompanying notes to the financial statements. -4-

Page 213-D

$

654 42138 10300 50642 3746 108586

$

216066

$

461194

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER DETAILS OF TRANSACTIONS IN RESTRICTED FUNDS FOR THE YEAR ENDED DECEMBER 31, 2005

Contributions Investment Other & Revenues Earnings Additions Advance Special – World Advance Special – National Advance Special – Conference Advance Special – Miscellaneous Africa University Fund Audio Visual Resource Center Bishop’s Appeal Black College Fund Board of Ordained Ministry Board of Pensions Camping Campus Ministry Center for Church Leadership Children and Poverty Childrens’ Ministry Institute Clergy Health Insurance Clergy Pensions Columbia District Trustees Commission on Archives Conference Administration Conference Council on Ministries Conference Headquarters Conference Trustees Congo Projects Clarksville Disaster Response Cookeville District Trustees Cornerstone Fellowship Corrections Ministry Course of Study School Delayed Compensation Delegate Expense – SEJ/General Conference Diaconal Divisional Grant Disability Fund

$ 1304745 $

$

94021

27779 3065 41048

33229 15 137800 154433

49188 75051 876508 11382

528205 4808 2378771 2483595

1699

2466 3220 121638 19259

615 26004 319035

108 285821

50547 2904

409

See accompanying notes to the financial statements. -5-

Page 213-E

34388 670 55096 4477

Payments Transfers & Other From (To) Distributions Other Funds $ 1225706 0 31716 27387 33229 0 2001 137800 62412 0 894818 555281 53600 0 1575 3824622 2096671 0 21519 0 884734 36812 0 4204 0 0 43325 0 54579 12167 12 0 1825

$(

1000) 0 ( 16850) 0 0 0 0 0 ( 129339) 0 109825 ( 138) ( 2900) 0 ( 1700) 1689407 ( 103820) 0 ( 836) ( 319035) 598846 0 0 1000 0 0 10000 0 9300 0 4429 0 0

Excess(Deficit) Revenue & Support Over Distributions $ 105818 0 48520 13661 0 15 ( 2001) 0 11870 75051 91515 ( 15832) ( 56500) 7274 ( 55) 366893 302363 615 3757 0 ( 67) 13735 0 ( 300) 0 0 1063 1079 9817 ( 7690) 4417 0 ( 1825)

Net Assets Beginning $

( ( (

(

(

452906 10148 94307 82476 0 1771 2001 0 53515 1012229 231491) 162879 112675) 36266 1161) 1149497 134929 17076 24170 0 153590 44109 9045 300 3892 4570 22004) 9053 34615 29623 2246) 1177 34458

See accompanying notes to the financial statements. -6-

Page 213-F

Net Assets December 31, 2005 $

558724 10148 142827 96137 0 1786 0 0 65385 1087280 ( 139976) 147047 ( 169175) 43540 ( 1216) 1516390 437292 17691 27927 0 153523 57844 9045 0 3892 4570 ( 20941) 10132 44432 21933 2171 1177 32633

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER DETAILS OF TRANSACTIONS IN THE RESTRICTED FUNDS FOR THE YEAR ENDED DECEMBER 31, 2005 (continued)

Contributions Investment Other & Revenues Earnings Additions Disability Awareness Sunday Disaster Fund Disciples Divinity Fund District Administration District Superintendents Fund Episcopal Fund Episcopal Office Episcopal Residence Fund Equitable Compensation Fund Fellowship of Associate and Local Pastors General Administration Hispanic Fellowship Hispanic Ministries – Seed Money Hispanic Ministries – Unidos en Cristo Hollowell Fund Human Relations Fund Igniting Ministry Interdenomination Cooperation Fund Jurisdictional Fund Kelly Fund Love and Justice Ministries McKendree Village Martin Methodist College Ministerial Education Fund Miriams Promise Mission to Middle Tennessee Mountain Lodge Murfreesboro Fellowship Nashville Area Administrative Assistant NAACT Meeting Nashville Area United Methodist Foundation Native American Ministry

270 7515

8332

539361 720160 262616 47135 13805 1950 1180

235596 82930

21000

7704 4457 27308 75060 185 755

57706 194232 526391 344407 106658 765

9492

(

10004

See accompanying notes to the financial statements. -7-

Page 213-G

1342) 70639 5524 205682 1220

Payments & Other Distributions

Transfers From (To) Other Funds

Excess(Deficit) Revenue & Support Over Distributions

$

$

$

0 22365 25812 539361 716651 262616 66481 34956 215342 996 82930 91 0 321 0 4457 46669 27308 75060 0 55519 194232 549107 321956 94129 3006 0 0 113623 5511 187532 8463

(

(

(

( ( (

0 0 0 0 25200) 0 8105 4207 36713 0 0 14891) 0 0 0 0 0 0 0 0 540 0 0 0 0 583) 0 0 59186 13) 14379) 145)

270 ( 6518) ( 25812) 0 ( 21691) 0 ( 11241) ( 16944) 58917 184 0 6018 0 ( 321) 7704 0 ( 46669) 0 0 185 3482 0 ( 22716) 31943 12529 ( 2824) ( 1342) 0 16202 0 3771 2616

Net Assets Beginning $

158 18548 27065 328 83844 0 11863 47094 118338 141 0 ( 6018) 19892 9101 146517 0 85567 0 0 980 2357 0 22716 219160 2189 3079 1342 ( 240) ( 21104) 0 25170 3011

See accompanying notes to the financial statements. -8-

Page 213-H

Net Assets December 31, 2005 $

428 12030 1253 328 62153 0 622 30150 177255 325 0 0 19892 8780 154221 0 38898 0 0 1165 5839 0 0 251103 14718 255 0 ( 240) ( 4902) 0 28941 5627

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER DETAILS OF TRANSACTIONS IN RESTRICTED FUNDS FOR THE YEAR ENDED DECEMBER 31, 2005

Contributions & Revenues New Church Development Office of Ministerial Concerns Office of Pastoral Formation One Great Hour Pensions Campaign Property – Conference Headquarters Pulaski District Trustees Religion and Race Settlement Account Sexual Ethics Seminar Shalom Zone Status and Role of Women Student Day Sustentation Fund Task Force on the Lottery Tennessee Conference Health Insurance Tillett Loan Fund Tillett Fund Dividend Trustee Risk Management UMCOR Human Emergency Vanderbilt Divinity UMSA Volunteers in Mission World Order Sunday World Service/Conference Benevolence Worldwide Communion Offering Youth Ministry Institute Youth Service Fund Early Apportionments Early Program Receipts

Total

Investment Other Earnings Additions

284060

1800 910 333449 1219 11327 11811

46575

1836 1439

634734

1804 7537

470

587628 2536

41653 23154

5335 3855 1763397 16742

6000 7095

86

$ 12843704

See accompanying notes to the financial statements. -9-

Page 213-I

$ 4850

$ 3668594

Payments & Other Distributions

Transfers From (To) Other Funds

$

$ (

131458 96669 223745 47794 0 0 0 3082 812500 1521 0 1621 7537 70315 0 317795 0 0 400 0 85982 19159 1927 939531 16742 4298 4095 0 150

$ 16446810

Excess (Deficit) Revenue & Support Over Distributions

(

19907) 104420 132) 0 0 0 0 327) 200000 1561) 0 292) 0 0 0 1592909) 0 0 0 0 0 150) 0 823630) 0 572) 620) 0 3213)

$ 134495 8661 109572 0 11327 11811 0 ( 1573) 23673 ( 3082) 0 361 0 ( 70315) 0 ( 1323076) 2536 0 ( 400) 0 ( 44329) 9180 1928 236 0 1130 2466 0 ( 3363)

$(

238164)

$ ( 167826)

(

( ( (

(

( ( ( (

Net Assets Beginning $ (

( (

(

$

See accompany notes to the financial statements. -10-

Page 213-J

287477 3142 56297) 0 56929 233176 4920 13773 0 3357 100 9181 0 151608) 158 627089) 105489 10000 0 5133 10246 4377 4602 0 0 4906 10763 154 6679)

3936333

Net Assets December 31, 2005 $

( (

( (

(

$

421972 11803 53275 0 68256 244987 4920 12200 23673 275 100 9542 0 221923) 158 1950165) 108025 10000 400) 5133 34083) 13557 6530 236 0 6036 13229 154 10042)

3768507

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2005

Unrestricted

Restricted

Increase (decrease) in net assets Adjustments to reconcile changes in net assets to cash provided by operating activities: Decrease (increase) in: Support and revenue receivable Marketable securities Investment management accounts Increase (decrease) in: Program funds payable

$ ( 305928)

$

Net Cash provided (used) by operating activities

$ ( 305928)

$ 372333

$

Cash Flows from Investing Activities: (Increase) decrease in participation certificates Appreciation (depreciation) in investments

$

$ ( 9209) 13671

$ ( 9209) 13671

Net Cash provided (used) by investing activities

$

$

$

Total

Cash Flows from Operating Activities:

Net Increase (Decrease) in Cash and Cash Equivalents

$ ( 305928)

$ ( 249261)

(206967) 220000 ( 94567)

( 206967) 220000 ( 94567)

397200

397200

4462

66405

4462

$ 376795

$ 70867

( 2441271)

2786480

$ 345209

$ ( 2747199)

$ 3163275

$ 416076

Cash and Cash Equivalents at beginning of the year

Cash and Cash Equivalents at end of the year

56667

See accompanying notes to the financial statements. -11-

Page 213-K

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER NOTES TO THE FINANCIAL STATEMENTS

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follow: 1.

Nature of Organization. The Conference Treasurer administers Conference operating and program funds that are received from churches, boards and agencies, and individuals of the Conference, in accordance with the budget and other directives of the Conference and of the respective boards and agencies. The Treasurer administers income from such funds and other revenue related to the Conference’s programs, and disburses funds to Conference boards and agencies and other recipients in accordance with the stipulations of the donors and of the Conference.

2.

Basis of Presentation. The Conference Treasurer reports information regarding its financial position and activities in accordance with the Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets based upon the existence or absence of donor-imposed restrictions. In addition, the Corporation reports information regarding contributions in accordance with SFAS No. 116, Accounting for Contributions Received and Contributions Made. In accordance with SFAS No. 116, contributions received are recorded as restricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions.

3.

Basis of Accounting. The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles.

4.

Cash Equivalents. Cash equivalents consist of short-term, highly liquid investments which are readily convertible into cash within ninety days of purchase.

5.

Revenue and Support. The Conference Treasurer records support, revenue, and expenses in the years to which they apply, as specified by the Conference and as designated by the respective contributors. The Conference Treasurer recognizes as receivable those items of support and revenue that are designated for the present fiscal year but are received subsequent to year end. Similarly, the Conference Treasurer recognizes as payable those program funds that are designated for distribution in the present fiscal year but which remain unpaid as of year end.

6.

Marketable Securities. Funds that are not expected to be required for immediate operation of the Conference are maintained in various short-term investments. Such investments are reported at market value at December 31, 2005.

7.

Donated Services. Unpaid volunteers make contributions of time in various administrative and program functions. The value of contributed time is not reflected in the financial statements as it is not susceptible to objective measurement of valuation.

-12-

Page 213-L

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER NOTES TO THE FINANCIAL STATEMENTS (continued)

8.

Functional Allocation of Expenses. The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited.

9.

Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

10. Income taxes. The Conference Treasurer is recognized as a not-for-profit entity that is exempt from federal income taxes under Section 501( C ) (3) of the Internal Revenue Code. Therefore, no provision has been made for federal income taxes in the accompanying financial statements.

NOTE B – RESTRICTED NET ASSETS: Temporarily restricted net assets are those assets that are designated by action of the Tennessee Annual Conference of the United Methodist Church for program ministries of the respective Conference boards and agencies. Permanently restricted net assets consist of endowment fund investments, the income from which is expendable for clergy pensions and other designated purposes. Restricted assets include certain assets that are maintained by the Treasurer on behalf of certain boards and agencies for investment and administration. These are as follows: Fund Title Board of Pensions Columbia District Trustees Conference Trustees Cookeville District Trustees Hollowell Fund Nashville Area United Methodist Foundation Pulaski District Trustees Tillett Loan Fund Trust Fund Dividend

Board or Agency Board of Pensions Columbia District Trustees Conference Board of Trustees Cookeville District Trustees Conference Board of Pensions Nashville Area United Methodist Foundation Pulaski District Trustees Board of Ordained Ministry Board of Missions

Balance – December 31, 2005 $ 1087280 $ 17691 $ 9045 $ 4570 $ 154221 $ 28941 $ 4920 $ 108025 $ 10000

Temporarily restricted net assets total $ 3343507 as of December 31, 2005 and permanently restricted net assets total $ 425000 as of December 31, 2005, bringing total restricted net assets to $ 3768507.

-13-

Page 213-M

TENNESSEE ANNUAL CONFERENCE OF THE UNITED METHODIST CHURCH CONFERENCE TREASURER NOTES TO THE FINANCIAL STATEMENTS (continued)

NOTE C – CONTINGENCIES: The financial statements have been prepared to reflect the effect of allocation among the funds of payment made during the year ended December 31, 2005, in a settlement resulting from mediation of a claim brought against the Conference. On April 2, 2005, the Tennessee Annual Conference of the United Methodist Church, in a special session, resolved to allocate payment among the funds as follows; Contingency Connectional Ministries Camp Maintenance Camp Fund NAUMF Reserve

$ 100000 100000 2764 277236 53027

Total

$ 533027

NOTE D – CONCENTRATIONS OF CREDIT RISK: The Conference Treasurer maintains depository accounts for Conference funds with Suntrust Bank, Nashville, Tennessee. Accounts at banking institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $ 100000. At December 31, 2005, Conference funds on deposit with Suntrust Bank exceeded the insured amounts by $ 316076. In addition, the Conference Treasurer has arranged with Suntrust Bank to invest on a daily basis certain funds that are not expected to be required immediately for Conference financial operations, but may be required for current operations at any given time. The Conference Treasurer has invested in commercial paper that has been issued by major corporations. As of December 31, 2005, the amounts of these investments were $ 816000. The Conference Treasurer also maintains investment accounts with Morgan Keegan, an investment brokerage firm. These funds are not expected to be required for current financial operations. The value of these investments at December 31, 2005 was $ 1473565.

-14-

Page 213-N