K.P. Yohannan – Page 36 – Warren Throckmorton

An Auditor Raises Questions About Gospel for Asia's Promises, Spending and Unaccounted For Donations

I have been raising concerns for weeks about Gospel for Asia’s use of students to carry undeclared cash to India and unreported donations in India. GFA remains silent and the Evangelical Council for Financial Accountability appears to be disinterested in the evidence submitted. Neither organization responded to my request for comment and information about this post.
On the other hand, I regularly receive emails from former GFA donors and supporters who have taken the information very seriously and have contacted GFA. Thus far, no donor who has contacted me has expressed satisfaction with GFA’s answers. Also, I was recently contacted by Jason Watkins, a former auditor with a Big 4 accounting firm who did a detailed analysis of GFA’s finances using information publicly available from around the world. I will post more of his material in coming days, but for today, I want to post an image depicting Watkins’ analysis of where GFA funds were spent in 2012. See below:

I have posted information which addresses some of these issues, but this image brings 2012 together in one place.*
Jason had this to say about the chart:

The data from the FC-6 Forms for the 4 GFA NGO’s (Gospel For Asia-India, Believers Church, Love India, and Last Hope) were obtained and converted to US dollars. The amounts reported as received from foreign (non-Indian) countries were reconciled to the amounts reported as sent by Gospel For Asia, Inc. (US), Gospel For Asia-Canada, Gospel For Asia-UK, et al. This reconciliation shows that nearly half of the money sent from the west was not reported as received by GFA in India. That money is not accounted for. That is, of the $95 million that was spent by all entities, $45 million was not reported and $50 million was reported in India.
Further, of the foreign $50 million that was reported as received in India, an analysis of the ways that money was spent was performed. This analysis segregated and identified the specific expense categories (water wells, children, women, disaster relief, missionaries, administrative expenses, et al) to show how much was actually spent for the purposes indicated.
The amounts on the pie chart are a sum of the spending categories [called ‘utilised’ on the FC-6] reported in India on the 4 GFA NGO’s FC-6 forms, and then dividing each spending category by the sum of the spending of all GFA entities ($95 million).

The Indian government requires completion of the FC-6 form by registered charities. GFA has completed those forms but, as Watkins points out, the GFA affiliates around the world report sending more funds than the FC-6 forms show as received.
Watkins found reason to question several of GFA’s signature claims:

Gospel For Asia (GFA) solicits and collects over $90 million per year from trusting donors by using the following claims:

“Since the ministry began, we have sent 100% of what you give toward sponsoring a missionary or child to the field”

“100% of what you give toward sponsorship goes to the field”

“100% of your assistance for missionaries goes to the field”

“100% of what you give goes to the field!”

“100% of what your donation will go to provide on the mission field. Nothing is taken out for administrative expenses”

“100% of what you give will go to help those in need”

A detailed analysis of the actual spending by Gospel For Asia in 2012 reveals

47% of the money ($45 million) is missing and unaccounted for. This was money donated by citizens of the US, Canada, UK, and other western countries. This money has not been recorded as received by the four Indian NGO’s (Gospel For Asia-India, Believers Church, Love India, and Last Hope) according to the FC-6 forms filed with the Indian Ministry of Home Affairs. If there are other NGOs directed by GFA, then GFA should reveal this.
21% of the money ($20 million) was spent on administrative overhead in the west (12%) and administrative overhead in the field (9%).
Only 31% went towards charitable expenses, and only 12% actually reached the needy. These are the items that are highly promoted as uses for your donations (water wells, disaster relief, humanitarian outreach, women, children, and missionaries).
GFA spent $0 on adult literacy and poverty and yet this is a huge promotional item.

I have asked GFA several times for information regarding these matters. However, GFA told me that the organization would answer no more questions. Regarding the claims of 100% going to the field, I have indicated before that much of the money is on the field, but it is sitting in banks.
Perhaps this is case of bad reporting on the part of GFA. Maybe there is some other explanation. I have acknowledged in the past that I am not an auditor and have been open from the beginning of my research to any information provided by GFA. However, when an experienced auditor examines the publicly available documents and comes away with these findings, I think it is past time for GFA to address these matters.
I have additional analyses to report and plan to do so in the coming days.

*Sources: Forms FC-6 filed by Gospel For Asia-India, Believers Church, Love India, and Last Hope with Indian Ministry of Home Affairs; Audited Financial Statements of Gospel For Asia, Inc. (TX Corp); Gospel For Asia-Canada, Forms T-3010 filed by Gospel For Asia with Canada Revenue Agency (CRA); Unaudited Financial Statements of Gospel For Asia (Australia) Inc. filed with Australia Charities Regulation Commission (ACNC); Audited Financial Statements of Gospel For Asia (UK) Ltd. filed with the UK Charity Commission; and other online inquiries. Local currencies were converted to USD using exchange rates at oanda.com for the relevant reporting periods.

Gospel for Asia's Leader K.P. Yohannan to Speak at Calvary Chapel Missions Conference

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.

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 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.