Do you follow the DOV Q&A column in the Virginia Episcopalian magazine? In each issue, a staff member provides a detailed response to a commonly asked question.

In the Winter 2013 issue, Mike Kerr, diocesan treasurer, responded to the following question:

Q: What process must my church take to incur debt?

financeA: One of the canonical requirements of the Diocese of Virginia relates to when a church takes on debt.  This might be operating debt (a line of credit being common) or capital debt (such as for construction or renovation).  Canon 14 outlines the thresholds for when there must be diocesan-level approval of such debt and this process is often asked of the treasurer’s office.
Working with the president of the Standing Committee, the treasurer will ask that a member of the Standing Committee be appointed as a liaison to the church. This liaison will help shepherd the approval process through to conclusion, as well as maintain contact with the church, in some cases.  A more intensive approval process was created in the mid-1990s, formed from a checklist that outlined needed documents when petitioning the Standing Committee for approval.  This was the direct result of several unfortunate learning experiences with respect to both historic districts and piecemeal approval requests, the latter of which ended up creating a debt-load that would have been denied had it come at the outset.

While the current process may seem arduous, it is intended to clarify the involvement of the congregation and vestry (already required by canon), church trustees (already required by canon in many cases) and diocesan level approval (already required by canon for every mission church taking on debt).  The submitted documents, reviewed by the treasurer before being presented to the Standing Committee, seek to force critical thinking of projects, especially as to the financial support internally and financial support externally (through a lender), so that the church is not stretched beyond fiscal reason.  To do so without such thinking could jeopardize crucial programs at the local level as this is often the goal of the need for the debt in the first place.

Posted by The Diocese

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