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DOCUMENT 9

FINANCE COMMITTEE REPORT TO THE 22ND GENERAL ASSEMBLY FOR THE FINANCIAL YEAR

OCTOBER 1, 2016 TO SEPTEMBER 30, 2017.

PREAMBLE:

The General Assembly officials, Commissioners, Delegates, Invited guests, ladies and gentlemen. The

Finance Committee is pleased to present to the 22nd General Assembly its report together with the audited

financial statement for the year ended 30th September 2017.

We acknowledge that this far we have come, the lord is our Ebenezer.

Membership of the Finance Committee

The Finance committee members during the year were:

PRESBYTERY/INSTITUTION NAME OF THE MEMBER

1} Moderator 21st General Assembly Rt. Rev. Julius Guantai Mwamba. 2} Secretary General Rev Peter Kaniah Kariuki

3} Deputy Secretary General Rev Alfred Mugendi Kanga

4} Honorary Treasurer Mr. Amon Nderi Ng`ang`a (Chair) 5} PCMF Rev Henry Kaira

6} Eldoret Joseph Murichu. 7} Western John N Kamau 8} Imenti South Janet K Nkonge

9} Mukurweini Daniel Gachago 10} Milimani North Reuben Kamau 11} Nairobi Central lawford mbae

12} Kikuyu Nancy W Munene 13} Thiririka Gadson I Njoroge 14} Murang’a George N Mungai

15} Lari James Mbugua Ng’ang’a 16} Muguga Daniel Karuga 17} Githunguri Harrison K Mwai

18} Rungiri Stephen Githitu 19} Limuru Peter M Kamau

20} Kambui Simon Kabogo 21} Kiamathare Charles Mimi Richu 22} Thika Eliud Gathu Mwaura

23} Gatundu James Gathuku K 24} Kihumbuini Edise Wairimu Ndirangu 25} Komothai Margaret Ngina Kamau

26} Ngecha Sospeter K Kinyanjui 27} Director PCEA Lay training Rev Michael Mundia 28} Director TEE Rev Patrick Muthungu

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29} Milimani South Joseph Githuku 30} Nairobi North Samuel Chege

31} Nairobi East Peter Ranji 32} Ngong Hills Daniel R Njoroge 33} Kajiado Keziah Wachirah

34} Pwani Joseph K Wanjema 35} Nyeri Hill James Mathenge M

36} Nyeri Lucy W Ndungu 37} Kieni West Joseph Chege 38} Nanyuki Francis M Nderitu

39} Kirimara West Robert M Muriuki 40} Kirimara East Esther W Kariuki 41} Othaya David Maina Wangai

42} Kiganjo David W Kariuki 43} Iriaini Sarah Njeri W 44} Njoro Lucy Mwaura

45} Nakuru West Charles Kimiri 46} Nakuru East Mary Kogi 47} Ndaragwa Grace W Wachira

48} Elburgon Philip Njao M 49} Aberdare Peter Mwangi Munuhe

50} Laikipia Obadiah K Mwangi 51} Nyandarua David K Essollom 52} Imenti Central Floret Kiambi

53} Imenti North Elizabeth K Kiambi 54} Chogoria South Hilda Mugambi 55} Chogoria North Shem J Marangu

56} Chogoria Central Frank k Murithi 57} Chogoria West Humphrey M Mugambi 58} Magumoni Maragara Ainsworth Kithinji

59} Chuka Zachary Mbaka 60} Tumutumu Daniel Mwangi Muthiga

61} Ruiru Jane Njoroge 62} Kiambu Paul Njuguna Boro 63} Woman’s Guild Veronica N. Muchiri

64} Communication Peter Kamuthu 65} Nendeni /BSR Rev. Robert Waihenya 66} Brigade Rev. Wilson Macharia

67} Presbyterian Foundation Samuel Waweru 68} Youth Rev. Simon Githiora 69} Ministers’ Rep. Rev. Harun Ngere

70} Ministers’ Rep. Rev. Christine Kariuki 71} Tumutumu Hospital Christine Kimotho 72} Kikuyu Hospital Stanley Ndungu

73} Chogoria Hospital Leah Mbarire 74} Samuel Ndungu Finance Manager PUEA

75} Muiruri Njane Finance Officer

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MEETINGS: The meetings were held as follows:

1. Full Finance meeting –3 times during the year 2. Executive Committee meeting –2 times during the year

ECONOMIC ENVIRONMENT The Gross Domestic Product decelerated to 5.5 % in 2017 compared to 5.7% in 2016 due to a combination

of domestic constraints and international constraints. Domestic constraints included the prolonged election season which derailed growth while international constraints included disruptive geopolitical events such as the United Kingdom exit from the EU and Trumps presidency which has translated to reduced foreign

investments to emerging economies .The government’s ongoing cap on lending rates charged by commercial banks has also limited lending to the private sector slowing down the economy.

The Kenya National Bureau of statistics (KNBS) reported that inflation increased from 7.0% in January 2017 to 9.0% in February 2017 on account of rising food and electricity prices. This is a high rise compared

to inflation average rate of 6.3% in 2016. Drought during the year remained a cause of high inflation as demand pressures prevented a rapid decline.

An economic recovery is underway in 2018; GDP growth is expected to rebound to 5.8% depending on the completion of ongoing infrastructure projects and the strengthening of the global economy and tourism. The government is holding talks with county governments to ensure that President Uhuru Kenyatta’s key

development “Big Four” agenda i.e. manufacturing, universal healthcare, affordable ho using and food security is implemented.

On social development, Kenya met some social millennium development goals targets, including reduced child mortality, curbing of exam cheating, and narrowed gender gaps in education. Interventions and

increased spending on health and education is slowly, bearing fruits. Devolved health care system and free maternal health care at public health facilities is improving health care outcome and develop ing a more equitable care system.

Kenya youthful and growing population, dynamic private sector, highly skilled workforce, improved infrastructure, and pivotal role in East Africa, give our country the potential to be of Africa’s great success

stories. Addressing poverty, inequality, governance and the skills gap (between market requirements and the education curriculum) will be a major goals, as well as problems of climate change, low investment, and low productivity. With these addressed, sustainable growth rate can be achieved to transfo rm lives of

ordinary Kenyan citizens.

In the long term the adoption of prudent macroeconomic policies will help safeguard Kenya’s robus t economic performance and unlock the economy productive capacity.

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SCHEDULE OF MMF PAYMENT DURING THE YEAR 2016-2017 This year we received overwhelming support from our parishes, 240 Parishes competed their MMF by

September 30, 2017 .MMF allocation for Parishes was KES 155,500,000/= and we received KES

155,367,300/= (99.9%) compared to 103% in the previous year 2015-2016.

2016 MMF ALLOCATION AND PAYMENT BY PARISHES AND INSTITUTIONS

Allocation Paid Balance

% Percentage

Paid 2016-2017

% Percentage

Paid 2015-2016

MMF

KES KES KES

Parishes

155,500,000

155,367,300 132,700 99.9%

103%

PCEA HEAD OFFICE CONSOLIDATED FINANCIAL STATEMENTS COMMENTARIES

STATEMENT COMMENTARIES

INCOMES

MMF from Department/Institutions Increase is attributable to Kikuyu Hospital who cleared a significant amount of their old cess arrears.

Jitegemea Press This is income from PCEA Jitegemea Shop sales /

Communication department from May 2017 to Sep 2017.

Investment Income Decrease was as a result of unfavorable interest

rates throughout the year due to heighted political climate and prolonged election period. We expect this to improve in the next financial year.

Other Income The reduction is as a result of drastic decline in

funds received from overseas and zero donations during the financial year.

Expenditure

Secretariat staff Costs Decreased by 5.4% due to reduction of 7 staff from the payroll, four of them who held high positions and

had significant remuneration package.

Mission costs Mission costs increased from KES 4.5M to 8.2M due to increased salary support of Clergy missioners.

Administrative Costs The increase is as a result of legal/professional fees and printing and stationery arrears paid during the financial year.

GA Coordination costs A reduction as a result of lapse of transition period

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and reduction of staff travel expenses.

Rental Operational Costs A 15% increase of the total expense was due to payment of Laverne land rates arrears of Kshs 789,400/= that had accumulated over the years.

Lavington Plot change of user also contributed to the expense rise.

Meeting Expenses A 7 % increase due to various sub committees

formed to probe in to the fraud issue in the finance office.

Finance Costs A 16% increase due to higher bank charges and penalties of defaulted loan inherited from

departments.

KEY ACHIEVEMENTS DURING THE YEAR 2016-2017

INCOME (MMF) - We received a total of Kes.155, 367,300/= (99.9%) of the MMF Charged to the

parishes during the year. Since the re-classification of parishes tremendous grow has been

realized with income growing from KES.92 Million to KES. 155 Million.

Year 2014/15 2015/16 2016/17

Allocation 92,475,640 124,800,000 155,500,000

Income Increase 67% 63%

Receipts 89,983,700 128,911,454 155,367,300

Balance 2,536,940 (4,111,454) 132,700

MMF ARREARS RECEIVED – We received 40.8 Million in arrears during the year, which enabled

the Finance Committee refund some of Milele Luxury Apartments debts and also assisted PUEA

sort urgent financial needs.

MISSION WORK- This has increased as we strive to reach the 10% target, the increase is credited

to salaries paid to Ministers serving in Western Kenya, Uganda and Tanzania.

INVESTMENTS – The Finance Committee has done well in investing surplus funds which are

earmarked to improve our property at Lavington.

STATUTORY DEDUCTIONS- We have been endeavored to submitting all statutory deductions

before or on the due date and during the year.

SALARIES – The Finance Committee has been paying its staff members on time boosting morale

and improved performance has been noted.

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CHALLENGES

MMF old arrears accumulation.

Milele Mombasa Luxury Apartments – The stalled project has resulted to investors demanding a

refund of down payments resulting to financial constraint.

PUEA inability to meet is financial obligations resulting to constant rescue by the Finance

Committee.

Staff dishonesty and loss of funds through fraud and forgery . This matter has been addressed.

Like Paul wrote to the Corinth’s; we may be hard pressed on every side, but not crushed; perplexed, but

not in despair; persecuted, but not abandoned; struck down, but not destroyed. 2 Corinthians 4:8-9

Conclusion

The Finance Committee appreciates the great support received from the Parishes, Presbyteries, Office of

the General Assembly and Business Committee throughout the year. May God bless you abundantly.

Honorary Treasurer, Acting Secretary,

Mr. Amon Nderi Ng’ang’a Catherine Wanjugu Kabugu

Chairman Finance Committee Assistant Finance Officer

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DOCUMENT NINE: PROPOSED 22ND GENERAL ASSEMBLY FINANCE COMMITTEE RESOLUTIONS.

1 This G.A. receives the report of the Finance Committee and audited accounts for 2016-2017

financial year from the auditor MS Maina Kinyua and Company and thanks both the Finance

Committee and auditor for the good work.

2 This G.A. appreciates the work done by Parishes in supporting the Finance Committee financially

and urges all Parishes/Presbyteries and Institutions to ensure they clear their Ministry Maintenance

Fund allocation and all arrears owed.

3 This G.A. recognizes the immense wealthy possessed by the Church in terms of non-current

assets, further this GA instructs the Finance Committee ,Presbyteries and Parishes to carry out

valuations of all their tangible assets to ensure the current worth is reflected in their financial

Statements.

4 This GA affirms the appointment and confirms MS Maina Kinyua and Company as Church auditors

for the year 2017-2018.