NCC rescue campaign launched in Louisville
An analysis by Parker T. Williamson, An analysis by Parker T. Williamson,The Layman Online, January 10, 2000
Two top officers of the Presbyterian Church (USA) are publicly promoting a $400,000 deficit bailout package for the National Council of Churches. If approved by the General Assembly Council in February, this grant will be added to a $100,000 appropriation already approved by the Committee on the Office of the General Assembly.
General Assembly Stated Clerk Clifton Kirkpatrick and General Assembly Council Executive Director John Detterick issued their statement after a special Presbyterian Layman Update was mailed to leaders of all Presbyterian congregations. That update alerted Presbyterians to the National Council of Churches’ financial crisis, and predicted that Presbyterian Church (USA) staff members would attempt a rescue with money taken from the denomination’s mission budget.
A Deficit History
1999 is not the first red ink year for the NCC. In 1998, it suffered a $1.5 million operating loss. In 1997, the NCC showed a net decrease in cash and cash equivalents of $1.6 million. In 1993, NCC money managers invested $8 million in a fraudulent “prime note scam,” hoping that they could get a $12 million return on their $8 million investment within 12 months. When the notes turned out to be worthless, NCC officials went to court and eventually won a return of $5.4 million, minus more than $500,000 in attorney and court fees.
Auditor’s Cite Irregularities
The NCC’s independent auditors have severely criticized the organization’s financial management practices. A management letter that accompanied the 1998 audit cited “reportable conditions rising to the level of material weaknesses.” That’s accounting language to identify management practices that leave the organization open to the possibility of undetected fraud. Specified irregularities in the auditor’s report include: transactions not being properly monitored and reviewed, undocumented American Express charges, advances made without sufficient documentation, cash account balances in the control accounting units not being reconciled with cash balances in the sub-accounting units, inadequate documentation to back up the identification and salary increases of employees, no apparent audit trail for recording cash receipts transactions, and no strict enforcement of supervisory controls on the processing of cash receipts.
The auditor’s 1998 management letter specifies that irregularities cited in a 1997 management letter were not corrected in 1998.
Invading Restricted Funds
The NCC’s appeal for denominational bailout money represents only part of its overall strategy to wipe out the deficit. NCC officials have plugged huge operating losses by invading restricted funds. Auditors have questioned a $330,00 transfer from the “Burned Churches Fund,” and more than $2.6 million of that fund was unaccounted for in a report distributed to the NCC General Assembly in November. NCC officials have steadfastly refused to commission a special audit of the Burned Churches Fund.
NCC officials have also taken millions from humanitarian aid funds collected by the NCC’s subsidiary, Church World Service, declaring that they are simply allocating “administrative expenses” to the relief organization. Under the NCC’s umbrella, Church World Service has no recourse when NCC officials decide to dip into funds that it has raised from CROP Walks and other hunger-relief campaigns. The NCC announced in November that it intends to take $1.4 million from Church World Service specifically for the purpose of plugging its $4 million deficit.
Wagging the Dog
In their public statement, Kirkpatrick and Detterick make no attempt to deny information published by The Presbyterian Layman. Instead, they assure their readers that the NCC’s problematic financial practices are a thing of the past. Interestingly, they cite the universally-respected work done by Church World Service as a reason for bailing out the NCC. But they do not mention the probability that if the NCC were to die, Church World Service would then be free to continue its humanitarian ministry unencumbered by costly bureaucratic structures.
Big Dollars
The Presbyterian Church (USA) is already the NCC’s most generous donor. Denominations with memberships many times larger than the PCUSA give a fraction of the Presbyterian contribution. Thirteen of the NCC’s 35 member denominations made no contribution at all. Here’s a sample from the 1999 donor record:
Denomination1999 NCC BudgetMembershipDollars per capita Presbyterian Church (USA)$2,066,2022.5 million.83United Methodist$1,443,1508.5 million.17Evangelical Lutheran$517,6225.1 million.10Episcopal Church$367,4372.3 million.16