The Judicial Council (10th Quadrennium) of The Methodist Church in Singapore has made a declaratory decision on a petition submitted to it by the Finance and Administration Council (FAC) of the 10th Quadrennium, seeking clarification on mandatory services to be performed by the General Conference Office (GCO) on behalf of an Annual Conference (AC).
The FAC’s petition referred to ¶323.5 of The Book of Discipline of The Methodist Church in Singapore, which pertains to its “Fiscal Responsibilities”. The FAC was of the view that ¶323.5 was insufficiently clear about what services are mandated to be performed by the GCO, and sought the Judicial Council’s interpretation of ¶323.5 to:
- Clarify if “centralised control [of] financial records and funds” refer to either:
- The centralisation of accounting, banking and payroll matters by the GC; or
- The centralised archival of financial records and funds by the GC.
- Determine which services that GCO currently performs are mandated by ¶323.5.
On question 1, the Judicial Council noted that ¶323.5 is not clearly drafted, and has to be read in the context of the main responsibility of the FAC as spelt out in ¶323 and how it applies to ¶323.4 and ¶323.5. Thus read, ¶323.4 and ¶323.5 spell out a scope of responsibility towards the GC that is broader than that spelt out under ¶323.5 for ACs.
This differentiation of duties led the Judicial Council to declare that the FAC’s authority and responsibility towards AC accounts under ¶323.5 is a general one, save for the specific matters of banking, cheque preparation and payroll that have to be performed by the GCO for maximisation of operational efficiency. In practice, this would necessitate the provision of accounting functions as banking and finance are part of the larger indivisible function of accounting and funds, and the financial records that are needed to support these functions.
On question 2, the Judicial Council noted the difficulty of performing banking and payroll services without the corresponding functions of bank reconciliations, receivables and payables, which would hamper adequate control of the financial records and funds, and the rest of the accounting functions. Accordingly, the following services as provided by the GCO to ACs were deemed mandatory:
- Book-keeping services
- Processing of cash receipts including banking in
- Processing of payments including cheques and TT payments
- Performance of monthly bank reconciliation
- Preparation of monthly financial statements
- Maintenance of general ledger
- GST filing, if applicable
- Year-end Financial Audit
- Administration of investments
- Fixed deposits
- MCS investment fund
- Payroll administration and processing
- Ad hoc responsibilities relating to banks, accounts, payroll etc.
The Judicial Council notes that the policy behind the mandated services is for ACs to derive maximum efficiency of operations. The responsibility is therefore on the FAC to ensure that ACs derive maximum cost-efficiencies under a system of centralised services, and that the services are rendered at a cost that Annual Conferences can afford to pay.
The following would not fall under the list of mandatory services and may be left to the agreement of the FAC and the ACs:
- Budget preparation
- Internal audit
- Insurance management
- Government-paid claims
- Personnel management
- Administration: franking system, telephone system, all-in insurance coverage
- IT Services
In accordance with ¶705 of The Book of Discipline, this declaratory decision rendered by the Judicial Council on 1 Dec 2016 is final.