World magazine’s Warren Smith has an article out today which provides some additional information regarding the Evangelical Council for Financial Accountability’s termination of Gospel for Asia’s ECFA membership.
According to Smith’s reporting, the lack of disclosure surrounding the $40+ million headquarters was key. As I first reported here, GFA failed to disclose the $19.8 million transfer of cash from Believers’ Church to help complete GFA’s new Wills Point, TX headquarters. This cash was not reported as a related party transaction but as an anonymous donation. GFA’s leaders told staff that the organization would not borrow money for the construction but in fact did borrow money from a U.S. bank in 2014 and then took money which Believers’ Church borrowed from an undisclosed source in India.
GFA’s CFO David Carroll said ECFA changes had been made and hopes to regain membership. I will have more to say about this in coming posts.
According to World, Ministry Watch’s Rusty Leonard has advised donors to halt all donations to GFA due to the extent of the problems.
Look for another article on this news from Christianity Today. Spokespeople for the magazine disclosed via multiple channels that an article is coming.
Tag: David Carroll
What Termination from ECFA Means for Gospel for Asia
Word out of Wills Point, TX (GFA’s HQ) is that GFA’s leadership is hoping to find a friendly reporter to bring forth a puff piece which will minimize the importance of losing membership in the Evangelical Council for Financial Accountability.
That may be a hard sell.
In the past, GFA has relied on ECFA membership as a means of proving their financial integrity. To illustrate, consider these prior statements:
As members of the @ecfa you can trust us when we say 100% of what you give goes to the field! http://t.co/M0OlOzrFna
— Gospel for Asia (@GospelforAsia) June 7, 2014
When GFA’s CFO David Carroll last wrote to me on May 7, 2015, he defended GFA by claiming that GFA adhered to ECFA’s guidelines:
Warren,
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.
Sincerely,
David
Apparently, ECFA now disagrees that GFA was accountable.
Prior to Friday, the GFA website proclaimed:
What does it say about GFA that the seal may no longer be displayed?
By the way, I don’t look for the other seal to be there much longer.
For all articles on Gospel for Asia, click here.
Evangelical Council for Financial Accountability Terminates Gospel for Asia's Membership
Just today the Evangelical Council for Financial Accountability posted notice that they have terminated Gospel for Asia from ECFA membership due to failure to comply with multiple ECFA standards. GFA was a charter member of the ECFA, having joined in 1982.
The reasons for termination are listed on the ECFA former member page:
This is a major development in this story and represents enforcement action one rarely sees from the ECFA.
GFA told Mark Woods at Christian Today that the ECFA review of GFA would be done sometime in October and that GFA would then answer all outstanding questions.
The lack of compliance involves the following ECFA standards:
Standard 2 – Governance
Every organization shall be governed by a responsible board of not less than five individuals, a majority of whom shall be independent, who shall meet at least semiannually to establish policy and review its accomplishments.
Standard 3 – Financial Oversight
Every organization shall prepare complete and accurate financial statements. The board or a committee consisting of a majority of independent members shall approve the engagement of an independent certified public accountant, review the annual financial statements, and maintain appropriate communication with the independent certified public accountant. The board shall be apprised of any material weaknesses in internal control or other significant risks.
Standard 4 – Use of Resources and Compliance with Laws
Every organization shall exercise the appropriate management and controls necessary to provide reasonable assurance that all of the organization’s operations are carried out and resources are used in a responsible manner and in conformity with applicable laws and regulations, such conformity taking into account biblical mandates.
Standard 7 – Stewardship of Charitable Gifts
7.1 Truthfulness in Communications
In securing charitable gifts, all representations of fact, descriptions of the financial condition of the organization, or narratives about events must be current, complete, and accurate. References to past activities or events must be appropriately dated. There must be no material omissions or exaggerations of fact, use of misleading photographs, or any other communication which would tend to create a false impression or misunderstanding.
VIEW COMMENTARY
7.2 Giver Expectations and Intent
Statements made about the use of gifts by an organization in its charitable gift appeals must be honored. A giver’s intent relates both to what was communicated in the appeal and to any instructions accompanying the gift, if accepted by the organization. Appeals for charitable gifts must not create unrealistic expectations of what a gift will actually accomplish.
VIEW COMMENTARY
I am surprised that Standard 5 was not also mentioned since GFA has not produced an audited financial statement for 2014.
Additional Information:
GFA’s charter member profile on ECFA’s website (Google cache)
GFA’s characterization of the meaning of ECFA membership (Google cache):
The ECFA seal is tangible evidence to donors that a ministry is complying with the highest standards of Christian ethics in its governance, fundraising and financial accounting and reporting.
K.P. Yohannan Told Gospel for Asia Staff He Didn’t Allow Ring Kissing, Video Appears to Contradict His Story
In May of this year, I posted a video of a Believers’ Church ordination service which appeared to show ministers kissing the ring of Gospel for Asia Founder and CEO K.P. Yohannan. Yohannan has denied allowing anyone to kiss his ring during rituals of the Believers’ Church. The following video makes it clear that those being ordained are doing something in the vicinity of Yohannan’s hand. If they aren’t kissing his ring, I think any observer could be excused for believing they are.
In an over two hour staff mega-meeting held on May 14, 2015, Yohannan again denied that ring kissing has any place in the church. This meeting took place before the video became available but the audio where K.P. offers a full-throated denial of the practice has not been made available before.
Here is the audio followed by the transcript.
(Listen on the website hosted by former staff of GFA)
Transcript:
David Carroll: There is one question that I think is on many of your minds and has been I think batted around a bit among us and that is, it’s asked a lot of ways but I’ll just ask it from this question plainly: Has ring kissing ever been a part of the Believers’ Church clergy ordination ceremony? Or I’ll just add: or any, is ring kissing is it required anywhere or is it still part of any of those things? Has it ever happened and if it has, if it used to be something that we did in some ceremony, are we still doing that? Kissing the ring?
K.P. Yohannan: What’s wrong with you? (Laughter) I kill you! (more laughter) Danny, I asked you, what is the meaning of kissing the ring? I thought about finding out what it actually means and obviously there’s submission to you or whatever. Now, if somebody said, ‘I saw somebody kissing the ring of our bishop or my ring, I would not tell that person, you are a liar. But if somebody asks me in your conscience and knowledge, you had taught or asked or has anybody kissed your ring, I would say as God almighty is my witness, it never happened, I never allowed it.
As a matter of fact, the most common, when this rumor started spreading, some Calvary Chapel pastors supposed to go to India and met some disgruntled person who left our ministry and started telling, you know, they’re teaching about kissing the ring. I remember that story came to me and immediately I contacted the field and said, ‘please, you know, we don’t want to be seen as belonging to some other church teaching, please don’t do it, if there is any like that.’ They said, ‘no, we never teach or practice that.’ But then I started wondering why somebody think this. So my thinking is you know the most common thing in China, India, all these countries when you see elders, especially spiritual leaders, what they do basically is they touch the feet, you can see that. And then I basically walk away from that. It has nothing to do with Christianity. It’s just culture. But then what the answer is, no, we don’t practice that, we don’t teach that, we teach against it so that we don’t get labeled by some other denomination but even today when you go to the mission field (unclear), what happens is when you meet the Metropolitan or the bishops and what they do is basically and they start doing this, they take the hand and do like that, and it’s not typically everywhere be like that, in most places, the actually touch the feet and express their honor, their respect.
When people are ordained, this the standard thing and by the way, let me say this to you. I fortunately, unfortunately, I like or not, I’m two human beings. I’m brother K.P., hi, K.P., yo, dude, all that here, people call me by all kinds of strange names. But you know when I bought the flight and land overseas, many have seen me a million times, I don’t look like this, I have a cassock, and I’m the Metropolitan of the church and the spiritual father of 2.7 million baptized believers right now. And when you ordain people you whether I like it or not I just submit to the church; that is, there’s a chair, the Bishop’s Chair, that I sit on. If it’s not me then it’s Bishop _______ or Bishop ____________ and then people are ordained they come and they kneel to get the blessing, and they’re anointed by oil and make the sign of the Cross, and I tell them in the name of the Father, Son, and Holy Spirit now you are ordained minister of the church and that is done, that always be done. There’s not going to be any change in that; all cultures do that, I don’t know how it is done here, but they don’t fall prostrate before anyone or anything like that.
There is an odd near admission at the beginning (“I wouldn’t tell that person, you are a liar”), but then he clearly denies it and provides a narrative that makes the idea seem very far from the church. Given his description of the ordination at the end, I wonder why he didn’t explain what the newly minted minister was doing with Yohannan’s hand. In any case, no explanation has been given for the video.
It is hard for me to imagine how staff at GFA can watch the video in light of this denial. Clearly, some explanation is needed for this.
Details of Gospel for Asia's 2014 Loan K.P. Yohannan Said Wouldn't Happen
Recently, I posted audio of Gospel for Asia founder and CEO K.P. Yohannan promising staff that GFA would not take out a loan in order to build the new Wills Point, TX headquarters and living compound. Eventually, Believers’ Church in India (K.P. Yohannan was managing trustee at the time and he is also the Metropolitan Bishop and spiritual leader of the church) gave GFA in the U.S. $19.8 million toward the project. The church had to borrow money to make this donation. Furthermore, I asserted that an $11.5 million loan was taken in 2014 with the money used for the project.
Today, I post evidence for the 2014 loan. Below are images from the 46 page Deed of Trust.
GFA borrowed $11.5 million.
GFA May Have Kept Some Information Back
The agreement was based on the use of Generally Accepted Accounting Principles (GAAP) and pledges that all material statements are correct. This pledge may be in conflict with the audited financial statement for 2013 which failed to disclose that GFA made related party transactions to Believers’ Church, Love India Ministry and Last Hour Ministry.
Furthermore, the bank (City Bank) was not informed that $19.8 million toward the building project came from a loan taken in India by a related party (Believers’ Church). Speaking as a non-accountant, this seems to be a significant and material omission. City Bank did not know that an entity related to GFA had taken a loan in order to provide GFA with funds. If City Bank took the audit at face value, they would have considered that $19.8 million to be a gift with no relationship to GFA anywhere in the world. City Bank might have reconsidered if they knew that an affiliate of GFA (and recipient of millions in U.S. donations) had to take a loan in order to keep the construction project going.
The Bland Garvey 12/31/13 audit was completed in June 2014 and the Deed of Trust signed in July 2014. It is difficult, if not impossible, to imagine City Bank, an FDIC-regulated institution, making a $11.5 million loan in July 2014 without relying on the Bland Garvey audit report on the 12/31/13 GFA financial statements. That audit report included the misinformation on the source and nature of the $19.8 million previously raised and spent on the project.