Grace Episcopal Alexandria Continues Slipshod Governance

By | November 28, 2020

Ed: The image above is my mother, taken with her permission as she was dying. Despite knowing that she was dying, Grace Episcopal Alexandria tried to drag her into court. So much for respecting the dignity of every human being.

While I am am quick to condemn the amount of time and money the Episcopal Church spends chasing its own tail with endless reports, committees, meetings, and the other indices of “doing church,” the governance geek in me has to admit: The endless reams of paper and reports offer wonderful insights into just how dysfunctional the denomination is.

Last night, I spent several hours happily rummaging around the mountains of paper to come out of the diocesan annual meeting. These days, everything gets reduced to a PDF journal, which is even better, as it makes everything searchable.

True to form, Grace Episcopal Alexandria, the clergy perjury parish, continues to ignore church governance canons, even as it 1) claims to be a careful steward of the resources entrusted to it and 2) it sheds members and income.

First, let’s look at the canonical requirement that all churches submit an annual audit to the diocese.

In that regard, there’s an important disclaimer that needs to be made: The diocese has watered down the audit requirement to permit an agreed-upon procedures, or AUP.

An AUP is simply a compiliation, and has no attestation value. In other words, it helps you check your numbers, but it does nothing to detect misuse or breakdowns in internal controls. (Apropos the latter, Grace has next to no internal controls, for it does not have the finance manual required under church canons. Thus, lacking controls, there are none to break down.

Here are the relevant canons, which require filing of the annual audit by August 31 of the following year. That. for most organizations, is a remarkably generous period of time, with most for-profits completing their audits during the first quarter.

Now, let’s take a look at Grace’s compliance with the canons. Leaving aside the fact that the church almost entirely ignores the requirements set forth in Section 1, here is the summary from the 2019 Annual Conference of those years in which the church actually submitted an audit.

Two out of the last five years.

All I can say is that if that is the church’s idea of good governance, no thanks. You can keep it. And members of the vestry should know better, as lack of transparency and lack of accountability erode trust.

Moreover, in the past, the vestry has neither seen the AUP engagement letter or the results, relying instead on perjuring priest Bob Malm for updates. Given Bob’s fabrications as documented on this blog, that’s hardly a recipe for success, particularly in light of the myriad issues that have come up with problems in the church’s bank deposits.

Church Pledge to the Diocese

Next let’s take a look at the church’s pledge to the diocese.

To begin, the church vastly under-pledges. Diocesan guidelines call for a church with Grace’s budget to give 14%-16% of its total operating budget. The latter is defined as all non-capital expenses for a given year, including those off-budget. That means it includes the altar guild, the music fund — anything that is operating expense. Yup, candles, musicians, sheet music, mopping the floor, it’s all includable.

Here are the guidelines:

Thus, if we assume a $980,000 operating budget, at 14% Grace Episcopal Alexandria should be giving $137,200.

But, true to form, Grace tries to pull a fast one by using pledge and plate income only, then paying 10 percent of that.

Here, derived from diocesan data, is information on Grace Episcopal Alexandria’s 2018 pledging:

In other words, Grace Episcopal Alexandria underpledged by $53,200. Maybe it should have taken a closer look at perjuring priest Bob Malm’s 200K annual compensation package, or his 2014 bonus of $100k. Sorry, folks, that $100,000 bonus should have gone to mission and serving those in need, not to perjuring priest Bob Malm. If he can can afford to send his kids to chi-chi private schools and spend a month on the beach every summer, while ignoring even basic aspects of church management (like supervising employees) he damned well didn’t need a bonus.

Then we turn to 2020, in which it appears the parish never did bother to pledge. Of course, diocesan records aren’t exactly a model of timeliness and accuracy, but one suspects the church just said, “Let’s see what happens.” Or perhaps it did so with the blessing of the diocese.

2020 Finances

But where things get really concerning is the data on the records of the church’s pledge payments over the past two years. For 2019 (image below) we see a pledge payment of $77,124, suggesting an almost $70,000 decline in 2019 in annual income for the church. And that’s pre-COVID.

Now, coming into the final quarter of 2020, we see total annual pledge payments of just $35,321, or less that 46 percent of last year’s already inadequate pledge. True, the church historically has played games with its cash flow, slowing down pledge payments during the summer, and picking up in the last quarter of the year, with the hopeful expectation that end-of-the-year donations of appreciated stock and other investments will allow it play catch-up. I understand the reasoning behind that, but it’s hardly fair to the diocese, which despite its myriad faults has been good over the years about paying its full share toward the national church’s bills, even as its own budget has dropped precipitously.

Here is the documentation from this year’s annual conference:

Looking Ahead

That leaves one of several possibilities:

  1. The parish is stiffing the diocese big-time, in which case it better hope for strong end-of-year giving if it plans to do the honorable thing.
  2. The diocese let the parish off the hook. If that’s the case, that’s a stupid move, for it fails to address the root causes of the church’s budgetary woes.
  3. The parish is paying 10 percent of its plate and pledge, which means it is on track for projected annualized plate and pledge income of just shy of $470.000. In that case, all I can say is, “Yikes!”

But no matter how these issues play out, there are several underlying realities:

  1. Governance-wise, the parish is a hot mess.
  2. Overall, the parish is a hot mess.
  3. Church leadership comes nowhere close to modeling the transparency, integrity, ethics, and governance standards that should be hallmarks of any church.
  4. The vestry has made remarkably poor decisions in backing perjuring priest Bob Malm, including his lavish compensation and 2014 bonus of $100,000.
  5. Both the vestry and the diocese have made poor decisions in backing perjuring priest Bob Malm in court. The fact that one even needs to go to court in the first place to obtain redress of Bob’s misconduct speaks to just how dysfunctional the church and diocese are.
  6. Finances are almost at the breaking point for the church, with cost structures that are unsustainable, even as the parish devotes just 3 percent of its budget to serving the community.

Recommendations

I strongly believe that it’s best not to criticize any organization unless one can offer proposed solutions. So while this is not the first time I’ve shared these, and I guarantee they will be ignored, just as these suggestions have been in the past, here goes:

  1. Publish church budgets, monthly budget updates (including budget to actuals, with variances), audits, and vestry minutes to the website. Yes, I get that perjuring priest Bob Malm feared that certain bloggers might thereby obtain access to the church’s gnosis, but as one can see, that information is out there for all the world to see. It’s just that it’s not readily available to those who matter, like members and prospective members.
  2. Bring in an outside professional to resolve conflict in the parish. No sweeping it under the rug, no ignoring it and hoping it will go away, no decreeing, “Well, it’s all in the past anyway.”
    DEAL. WITH. IT.
  3. Establish written norms for behavior within the parish. No bullying people because you don’t like something they did. Sorry folks, you don’t get to play God. And the childish games and hatred of people like Alison Campbell. Lisa Medley, and Kelly Motormouth Gable, among others, just drive the church further into the ground. Nor does defaming former members get you anywhere. Even if the church wins in court, it still loses in the court of public opinion. And very few will be interested in joining a church where it’s okay for the rector to commit perjury, or the priest to lie to the bishop, or for vestry members to defame people. (By the way, isn’t it about time for Kelly Motormouth Gable to put her money where her mouth is and file a police report over her allegations that I embezzled from RPJ Housing? Time to show a little backbone, folks. If Kelly and the church are good with that sort of conversation behind the scenes, they should be fully prepared to have those conversations in the light of day.)
  4. Create written policies and related materials. Time for that HR policy manual. Time for the finance manual required by the canons. Time for a real audit. (Given the mess financials were in for many years, a full-on forensic audit would be entirely appropriate.) Time for written policies about engaging in litigation. Time for clear expectations of the vestry versus the rector. (For the record, neither Bob Malm nor any other rector “is in charge” of the church’s temporal affairs. The vestry is. And when the rector asks you to do something, it is okay to ask why, or to say no. You’re adults.)
  5. Come to terms with the past. Until you do, the parish will continue its precipitous decline.
  6. Use outside resources to teach church members how to deal with future conflict  in a constructive manner.
  7. Hold frank and candid coversations about perjuring priest Bob Malm’s conduct and its effect on the parish.
  8. Enlist buy-in from the diocese and support from the diocese. If the diocese says no, as it likes to do, insist.

Of course, none of this is easy. But if it doesn’t happen, and damned soon, something even more troubling is coming down the pike — a church that closes its doors.

Grace Episcopal Alexandria is in a bad way, and things are only going to get worse.