World leaders of the General Conference of Seventh-day Adventists stressed a continuing need for transparency and accountability in financial reporting during a business session of the movement’s Spring Meeting.
“We need to be united and set the right tone as officers… we must work together as a team, all the way through the system,” said Pastor Ted N.C. Wilson, General Conference president, in response to a report presented by world church treasurer Robert E. Lemon and G.C. Auditing Services (GCAS) director Paul H. Douglas.
There ought not to be friends in boardrooms … if I sit on that board and respond to issues on that board because I’m a friend, I really have no business being on that board. You need to challenge me and do it with a smile.
The 12-page document on transparency, product of a task force composed of Lemon, Douglas, NAD Treasurer Tom Evans and GCAS associate director Robyn W. Kajiura, stressed concerns raised by the GCAS Board and its chairman, Jack L. Krogstad, a layman who holds the Union Pacific Endowed Chair in Accountancy at Creighton University in Omaha, Nebraska, and was recently an Academic Fellow in the Office of the Chief Accountant at the United States Securities and Exchange Commission. Those concerns followed a GCAS report “which included the frequency of certain audit findings and the recurring unresolved nature of those findings,” as the document stated.
The document, “Transparency and Accountability in Financial Reporting,” suggested a need to improve church leadership culture at all organisational levels, that better controls result from a better culture, that “communication is at the core of effective governance,” and the result would be greater confidence from all Church stakeholders, or constituents.
“It’s not an auditing issue, it’s a character issue,” said Juan Prestol, undertreasurer for the General Conference, during discussion of the matter. “An audit is too late,” he explained to Adventist Review after his remarks, since audits only discover issues after the fact.
What is needed, he added, are “changes in the DNA of Adventist leadership.”
Undertreasurer Juan Prestol addresses the chair at Spring Meeting on April 10 during a discussion of auditing issues left unresolved. “It’s not an auditing issue, it’s a character issue,” he said.
Wilson said board members need to be unafraid to question items presented to them: “On committees, ask questions. Don’t assume somebody else is going to take care of it,” he said.
Added North American Division president Dan Jackson, “There ought not to be friends in boardrooms … if I sit on that board and respond to issues on that board because I’m a friend, I really have no business being on that board. You need to challenge me and do it with a smile.”
And Ella Smith Simmons, a general vice president of the world church, stressed the need for an even higher approach: “I would challenge us to total commitment to holistic stewardship. Of course we focus on financial operations; but how can we operate in integrity and [in] ethical ways if we do not value ethical behavior in every area of our work, of our being, our relationships, our quality in performance. It must be holistic,” she said.
Wilson promised further discussions on the subject at the 2011 Annual Council to be held in October in Silver Spring, Maryland.
In an earlier address, Lemon said the church’s finances showed improvement in 2010.
“Worldwide tithe passed the US$2 billion mark in 2010,” Lemon said. “In spite of the recession and slow recovery of the economy in the U.S., the economies of most of the countries of the world have continued to be strong. This is also reflected in the tithe and offering figures. Worldwide tithe was up 8.2 percent, totaling US$2.002 billion. Tithe in the North American Division was up 1.1 percent over 2009 and totaled US$887 million in 2010 as compared to US$877 million in 2009. Tithe from divisions other than North American was up 14.6 percent and totaled US$1.114 billion compared to US$972 million. Some of the increase was due to changes in the exchange rate to the U.S. dollar, but much of it was from increases in local currencies.”
“It is inspiring to see the faithfulness of God’s children in returning their tithes and giving offerings for the support of His work even in tough times,” Lemon added.
Lemon also noted that costs to the world headquarters for the 2010 General Conference Session in Atlanta, George, though budgeted at US$6.2 million came in under budget at US$5.5 million.
Independent auditors for the General Conference, as well as the various pension plan funds associated with the world headquarters and the North American Division, gave all accounts unqualified positive opinions that generally accepted accounting principles were met across the board.
Undertreasurer Prestol added that the General Conference’s balance sheet, for the first three months of 2011, “is $2.6 million to the good,” which he said means the organization is “doing very well” so far.
(Photos by Ansel Oliver)