I've spent the last week or so dealing with the discovery that over $1 million in funds donated by church members to the PCUSA's special offerings were not forwarded by New Covenant Presbytery, but were diverted to pay for mission projects of the presbytery by the director of financial affairs for the last 3 years. I can blog about it now because a press release on the situation was sent to the PCUSA and to the Presbyterian Outlook--you can read the Outlook's report here.
The money given to the special offerings (Christmas Joy Offering, Peacemaking Offering, One Great Hour of Sharing, etc) is sent to the presbytery from the churches and then presbytery forwards it to the denomination for distribution to the agencies and groups that benefit from the offerings. They are essentially funds held in trust by the presbytery and passed on--the money should never have been used to pay any obligations of the presbytery. There was no authorization for this and the employment of the director of financial affairs was terminated.
An interim director should be in place this week and last week additional financial control procedures were instituted to make sure this situation cannot be repeated in the future. New Covenant has had annual audits by an independent accounting firm that did not discover this unauthorized diversion of funds. Apparently the auditors didn't understand that these funds were supposed to be passed on to the PCUSA and should not have been applied to presbytery obligations. Curiously, the GA offices never asked why the offerings had not been forwarded--and New Covenant is one of the largest presbyteries in the country.
The only explanation offered so far is that the former director of financial affairs started using the funds to cover short-term cash flow problems and then the numbers mushroomed into a never-ending cycle of robbing Peter (the PCUSA special offerings) to pay Paul (New Covenant). While the investigation into the situation is still ongoing, there is no evidence so far that the former director personally benefited from these unauthorized actions.
This coming Saturday there will be more discussion at the regular meeting of presbytery. I won't be there because I am attending the Moderator's Conference in Louisville. At this time, I am the "Moderator elect-elect" and don't have a role in the meeting, but in 2007 when I chair the General Council I will be dealing with the after-shocks of this revelation.
Our Vision 2010 which involved plans to grow more disciples and churches in New Covenant is threatened. There were already discussions about the need to develop a long term strategy to address the cash flow and budget deficit problems of the presbytery, which now will begin in earnest. Not only must we find a way to pay back the $1 million owed for the special offerings, but we will have to cut back on the items that we thought we could afford but were being paid for by the special offerings rather than by presbytery's money.
I'm praying that in the long run good will come out of this million dollar problem: that the churches will agree on and support a plan for repayment that will allow presbytery to pursue its vision and purpose; that the presbytery will establish better financial control procedures; that the presbytery will focus on and perform its essential functions well and that the churches will cooperate with each other and with presbytery to do the "nice to do" functions that foster mission, connectionalism and community.