Showing posts with label financial transparency. Show all posts
Showing posts with label financial transparency. Show all posts

Saturday, October 12, 2019

Financial Transparency: What It Really Looks Like

Some time ago, I posted an example of a transparent church budget developed by a parish not too far from Grace. Included in the budget were line items for the compensation of each member of the clergy and staff, as well as sufficient detail to allow anyone who’s curious to learn more. Indeed, the church’s budget is published on the parish website for all the world to see.

This contrasts sharply with Grace Church, where former senior warden Lisa Medley shrilly proclaims there’s “total financial transparency.” (That’s in addition to her various lies about me.) That’s a remarkable claim, since:
  • The church is not audited (contrary to her claims).
  • Vestry members do not see the accounting firm’s engagement letter when it does its Agreed-Upon Procedures (AUP) review, which has no attestation value. In other words, it is not intended, nor is it likely to, uncover any sort of major issue.
  • Vestry members, contrary to law and church policy, do not see financials for the school, which constitutes 2/3 of the total annual budget.
  • There have been major payroll errors in the past that went undetected for months.
  • Thousands of dollars in unaccounted-for loose cash and stale checks were found in a former parish administrator’s office, with no explanation.
  • The church does not publicly release its vestry minutes, its financial reports, its budget, or its annual report.
  • The loan to Bob Malm was carried off the books for years, contrary to Generally Accepted Accounting Principles.
  • When factoring in depreciation, the parish has been running a deficit for many years.
  • There have been multiple illegal misuses of restricted solicitations.
  • Even the AUP was not completed in a timely manner in 2015–a fact not shared with the vestry.
In other words, if there indeed is total transparency at Grace church, then it follows that the Princess Porcine and other vestry members willfully turned a blind eye to the misuse of funds, the stale checks in the church office, the major payroll errors, and more. 

So which is it?

Speaking of, below is a good example of financial transparency from the Church of the Holy Comforter in Vienna.

When was the last time Grace Church members saw data of this sort?

Answer: NEVER.

Oh, and this was sent to the entire parish email list. 

So much for “complete financial transparency” at Grace.

And while we’re on the topic, Lisa Medley publishes details of people’s giving in cyberspace. How did she get that access? What kind of imbecile posts confidential giving information publicly? Did it not occur to the Princess Porcine that publicly showing that giving is NOT confidential is a powerful disincentive to further giving?

Yet another reason to avoid Grace Church, and to refrain from pledging.





Friday, December 21, 2018

Notice Something Amusing? Grace Church Further Retreats from Good Governance

One recent amusing change is that Grace Church has pulled the vestry minutes from the website. Leaving aside the fact — the “burning question,” as Kemp Williams would call it — that I don’t rely on the website for access to the vestry minutes, it shows how utterly clueless Bob Malm and the church are.

Why is that? It’s because when an organization is in crisis, which St. Dysfunction clearly is, the secret to turning the situation around is utter — almost ruthless — transparency. That’s right, warts and all, you make a public commitment to transparency and accountability.

Going the opposite direction suggests to detractors, of whom Bob now has many, both within and without the church, that you have something to hide. 

And indeed that is the case. Bob is eager to reduce awareness of his multiple courtroom lies, his lies to parishioners (ranging from his infamous, “Don’t worry about it, they’ll be retiring this year,” to his claim, in writing, to multiple parishioners, that I agreed at the Fredericksburg meeting to adhere to the bishop’s “directives” — a curious proposition for someone not then even a member of the diocese of Virginia). Indeed, in utopia, Dysfunctional Bob would get a confidentiality agreement and the opportunity to slap a little Jesus-babble on things, with his usual inane claptrap about moving forward in grace, love and peace, as he continues to avoid accountability for his actions.

Moreover, Bob would like to shield from view the church’s collapsing finances and attendance. Yet the reality is all of that data gets reported to the national church and is a matter of public record, and available online to anyone who may be interested. Moreover, any church that can’t or won’t publicly share its board/vestry minutes, financial reports, and budget is one of which you should be most wary.

In short, at a time when numerous questions remain about the multiple governance issues and problems at St. Dysfunction, it’s utterly boneheaded to try to be clever by withholding information.

Speaking of, if you’re pledging at Grace Episcopal, did you ever get an good explanation as to the thousands of dollars of cash and stale checks found in the parish administrator’s office when Charlotte left? As in how it happened, and why no one discovered it for years? Or what steps have been taken to prevent a repeat? As I have said before, “We trust Beth,” is NOT an internal control.

I’ve got $100 that says the best anyone has gotten is some deflection from Dysfunctional Bob about how “we all knew Charlotte had to go.” Which does absolutely nothing to answer the question.

My advice if you are pledging: Caveat emptor. There is less transparency at Grace Church under Bob Malm than there is at many evangelical mega-churches, and this should make you very, very cautious.

In the meantime, check out this screen cap from churchtransparency.org, especially the part about increasing donations. Hashtag clueless.




Wednesday, October 3, 2018

Lack of Transparency Hinders Grace Episcopal Stewardship

There’s a great article on ECF Vital Practices this month about the importance of financial transparency to these success of churches. The article, found here, also illustrates why Grace Episcopal Church is in serious financial and spiritual trouble.

In the article, the author correctly notes that the vestry legally is responsible for establishing and supervising internal controls; the rector, vicar, or priest in charge is responsible for implementing those policies. 

The challenge for Grace church is that the church not only has next to no internal controls, but there is no vestry overnight of Bob Malm’s role in the church. None. Nada. Zip.

To make matters worse, Bob actively resists any supervision. Indeed, if you push his too hard, Bob will trot out the comment, “I’ve tried reaching out to you, but the anger and criticism continues. So you can either decide to be happy, or resign your positions....” You get the drill. But true to form, that overlooks the reality that Bob reports to the vestry, not the other way around, and he has no legitimate business trying to push people out of the church.

Nor is there any meaningful financial transparency. Line item detail for budgets and financials is conspicuously absent, and vestry members are asked to take Bob Malm’s word on the results of the annual pseudo-audit. In addition, details of compensation arrangements are kept secret from vestry members—which in one case, resulted in Richard Newman being overpaid, and being forced to repay the overage. (Not that he is over-compensated, by any measure.) So much for transparency.

And, of course, there is the more than a decade of absolute bedlam in the s***hole that was the parish administrator’s office. Hoards of paper, disorder, chaos, and facially obvious errors in financial reporting, not to mention repeated issues with the church’s bank deposits. Yet Bob Malm, compensated at a level consistent with many Episcopal bishops, adamantly refused to address these issues for years.

Then we come to the ugly matter of Bob’s bonus. Leaving aside the fact that bonuses should be reserved for employees who, at a minimum, meet job requirements, the $100,000 lump sum was negotiated not even by the executive committee, but by the senior warden and treasurer, and largely presented to the rest of the vestry as a fait accompli.  Indeed, the only argument came from one vestry member who wanted to write off the other $100K. Talk about throwing good money after bad!

In short, transparency, accountability, strategic planning and adherence to church canons are all in desperately short supply at Grace Church. So, this fall, as members think about their pledges for the coming year, I encourage them to ask tough questions like:
  • How do I know my money will be used appropriately?
  • Why didn’t we save the money for the HVAC work, instead of now talking about borrowing it?
  • When was the last time Bob Malm had a meaningful performance review, including being held accountable for his actions undertaken as rector?
  • Do I understand how my money is being used?
  • Why aren’t the budget and financial reports made publicly available?
  • Why can’t I see a copy of the “audit?”
  • Are internal controls adequate, and how do I know they are being followed?
  • What does it mean for the vestry to act as a fiduciary?
  • Why has the church experienced so many issues with its financial reporting over the years, and how do I know that these issues are really resolved?
  • How did Bob Malm manage to unilaterally get into a conflict with former church members? Was the vestry involved in the decision to remove Mike and Eric from church membership roles? Or did I find out about that after the fact? And what does this situation tell me about internal controls and decision making at Grace Church?
  • When independent third parties, like commenters at The Wartburg Watch, say things like, “That is one seriously toxic church you have, Eric,” why do they say that, and what might this be telling me about governance at the church?
Until these questions are answered, I encourage church members to withhold their funds. Members have a right to transparency, accountability, and Christian conduct by Bob Malm, the vestry, and church staff, and so far they are getting damned little of any of these items.