According to this website, Gospel for Asia’s founder and president will speak at Calvary Chapel in Downey, CA as a part of a missions conference. I wrote the church to ask if Yohannan plans to address any of the controversies swirling around Gospel for Asia and will add any answer I get.
Specifically, it is not known if any leader at Gospel for Asia is going to publicly acknowledge that the leaders prevailed upon their own students and ministry partners to carry envelopes of undeclared U.S. cash to India in apparent violation of U.S. law. Thus far, GFA has not apologized for violating their own financial integrity guidelines or requiring students as young as 18 to engage in smurfing of large amounts of cash to India.
There are other issues about which donors and supporting churches should be briefed.
GFA’s audit (conducted by Bland Garvey) failed to disclose three related NGOs which received funds from GFA’s American donors. Furthermore, between $30-50 million of money GFA said went to India in 2013 does not show up in reports submitted to the Indian government.
Another question I hope H.E. Most Reverend K.P. Yohannan addresses is the massive surplus of funds being stored in Indian banks.
Perhaps he could also address why he claimed he didn’t allow men being ordained to kiss his ring but a video shows the men kissing his ring.
An ongoing concern has been the stories of more than 80 former staff members who have unresolved problems with GFA. Current turnover in U.S. staff should be a red flag to any supporter.
Although this might not be of great interest to California church goers, maybe he could also say why GFA – India did not disclose to the Indian government the amount of money given to GFA – India by Canadian donors.
There are other questions and more issues to be raised, but these would be a good start.
Category: K.P. Yohannan
Why Doesn't Gospel for Asia Report All Related Party Transactions?
The only audited financial statement Gospel for Asia makes available is from 2012 and 2013. In that statement, Note H reports Related Party Transactions. Generally, organizations are expected to disclose transactions with other groups where there are common board members or other common elements. In Note H, GFA reports contributions of cash to five related parties, all GFA affiliates in Asia. However, GFA failed to report other related party transactions to Believers’ Church, Love India Ministry, and Last Hour Ministries. I assume that the $58 million GFA claims that it sent to GFA – India includes money sent to Believers’ Church, Love India Ministry, and Last Hour Ministries. It would be good for GFA to clarify this, especially considering the discrepancy between U.S. and Indian reports. Give notice to the first paragraph of Note H:
Believers’ Church, Love India Ministry and Last Hour Ministries are related parties, so why were donations to those organizations not reported? All are controlled by K.P. Yohannan which makes these resources under his control in India. More troubling is the fact that the American and Indian reports do not match up. Just looking at calendar year 2013 receipts (from GFA’s FC-6 reports to the Indian government), only $28.6 million in contributions to the four organizations controlled by K.P. Yohannan show up. This is a nearly $30 million discrepancy.
If one just takes this audited statement as written (GFA – U.S. gave $58.5 million to GFA – India in 2013), then the problem is much worse. In the reports filed with the Indian government for GFA – India, just over $6.5 million is reported as received from GFA -U.S, a discrepancy of $52 million. I assume that $22 million of that went to Believers’ Church, Last Hour Ministry and Love India Ministry but the audited statement omits those facts.
The practical matter is that donors dollars intended for GFA may be paying the salaries of bishops and clergy within Believers’ Church, or ordination services such as the one where those ordained were expected to kiss the ring of K.P. Yohannan. Some dollars indeed going to GFA affiliates in Asian nations but other dollars are going to a denomination with K.P Yohannan as Metropolitan with all the administrative, personnel, and other costs associated with it. Another practical matter is the millions of dollars which GFA claims were sent to GFA – India but don’t show up on Indian reports.
Legally, failure to report related party transactions can be a big deal in the for profit world, but not so much in the non-profit sector. The issue is about why GFA and/or Bland Garvey failed to report it. Is there some reason GFA doesn’t want donors to know the largest share of contributions go to Believers’ Church? Did GFA tell Bland Garvey about the other three related party transactions. Or did Bland Garvey omit that information? And where is the $30-52 million which doesn’t show up on Indian reports?
As always, if GFA has information which are relevant to this post, I invite them to present them. I will always present their side or information the organizational leaders believe to be relevant.
Phoenix Preacher Raises Red Flags Over Gospel for Asia
Last week, the Phoenix Preacher blog ran a post titled Red Flags over Gospel for Asia. The post describes a GFA donor’s attempt to get answers to questions which have come up in recent weeks. It is good to see donors asking questions but not so good to see the responses. The blog author raised some of the issues I have covered with this assessment.
GFA has felt that Throckmorton has been unfair to them and takes them out of context and so they have chosen to stop communicating with him in any efforts to clarify the concerns he raises. In my phone conversation with the GFA rep, he did give me explanations to some of the concerns raised by Throckmorton. However, some of the explanations seemed to me more like trying to put a positive spin on things rather than giving good solid evidence and rationale. Meanwhile, Throckmorton continues to raise more concerns as he uncovers more and more suspicious looking information. Here is a link to all his GFA articles: /category/gospel-for-asia/
I plead not guilty to this charge. Up to and including the last email from David Carroll, I included the information Carroll sent on behalf of GFA. Here is what he said in his final email:
No, Gospel for Asia has not violated the law.
When you first contacted us, I mentioned that we would not be able to respond to every question you put before us. Now, with the increased volume and frequency of your questions, it has become clear that this back and forth has become a distraction from our mission work. For this reason, this will be my final response. We understand that you will continue to explore issues around Gospel for Asia and continue to be fed accusations from former employees, and we accept that.
We continue to remain accountable to all applicable laws and regulations, to the Evangelical Council for Financial Accountability and to independent auditors.
In his email, Carroll doesn’t accuse me of being unfair or taking him out of context. He said I asked too many questions and for that reason, he was not going to reply. This reason should be of grave concern to donors.
As we now know, GFA did violate the law when they sent groups of students to India each with $4500 in cash in envelopes without declaring the cash to U.S. customs.
The Phoenix Preacher post shows that the questions have only multiplied.
Gospel for Asia, and the $9 Million Interest Play
In note H of GFA’s 2013 audited financial statement, GFA describes a $9 million transfer to India to take advantage of what is described as “favorable interest rates” (see the last paragraph in the image below).
The Indian FC-6 forms requires NGOs to report the amount of foreign contributions received and the amount of interest made on those contributions. It appears that GFA in India made about 6% on contributions in 2011-2012. According to the Bank of India, the benchmark interest rate peaked at 8.5% during the period.
source: tradingeconomics.com
While 6-8.5% sounds high compared to U.S. rates, the unfortunate thing about the move is the fact that Indian rupee continued to weaken. On August 15, 2011, one rupee was worth .02177 cents. By December, the rupee had declined to .01816. By August of 2012, the decline continued to .01796. The financial statement doesn’t say when the money was returned but even if it was January 2012 (.01889), GFA lost just over 13% due to currency devaluation.
Gospel for Asia Gives Non-Answer to Question About Massive Cash Reserves in India
In a Christian Today article from yesterday, Mark Woods was able to secure some answers to questions I have been posing on this blog. In response to massive cash reserves being held in Indian banks, COO David Carroll said bank balances change as money is spent and deposited.
GFA’s Chief Operating Officer David Carroll told Christian Today that it was important to understand that GFA India and Believers Church were separate entities from Gospel for Asia USA. While he did not provide detailed figures, when asked about the cash reserves apparently held in Indian accounts, he said: “Like any nonprofit organisation or ministry, money in these bank accounts ebbs and flows throughout the year. It does not just sit there. The account balance will swell and then decline as the money is spent according to donor designations.”
In other news, water is wet.
Of course, the balances change but GFA’s surplus has been swelling for years. One nice feature of the Indian FC-6 forms is that balances at the beginning and end of the fiscal years are reported. Looking at just GFA’s balances (remember, GFA in the U.S. sends donor money to at least four Indian NGOs – GFA-India, Believers’ Church, Love India Ministries, and Last Hour Ministries), the balances have been doing more flowing than ebbing.
The above figures do not include money sent from GFA in the U.S. to the other three Indian NGOs. However, the rate of increase is about the same to the point where now all four organizations have more than $150 million just sitting in bank accounts.
Looking the growth of the balances, GFA in the U.S. continues to tell donors that so much could be done if only there was enough money. GFA has money stored away and that has been growing steadily.
I will end this post by previewing a future one. As I have done these calculations, I have noticed that the value of the rupee has declined over this period. By sending so much American money to India and letting it sit in banks, millions have been lost to currency devaluation. In my conversations with those knowledgeable currency exchange rates, they tell me it is better to keep money in the U.S. until it is actually needed on the field. It is easy to see why this is true. The minute you send money to India, you lose some of it. And the longer it sits there, the less it is worth. This method of management of the funds has lost millions of dollars over the years.