World church Undertreasurer Juan Prestol addresses the chair at Spring Meeting on April 10 during a discussion of auditing issues left unresolved.
World leaders of the Seventh-day Adventist world church stressed a continuing need for transparency and accountability in financial reporting during an April 10 business session of the denomination's Spring Meeting.
"We need to be united and set the right tone as officers ... we must work together as a team, all the way through the system," said Adventist world church President Ted N.C. Wilson, responding to a report presented by world church Treasurer Robert E. Lemon and General Conference Auditing Services (GCAS) director Paul H. Douglas.
The 12-page document on transparency -- the product of a task force composed of Lemon, Douglas, North American Division Treasurer Tom Evans and GCAS associate director Robyn W. Kajiura -- stressed concerns raised by the GCAS Board and its chairman, Jack L. Krogstad. Krogstad, a layman who holds the Union Pacific Endowed Chair in Accountancy at Creighton University in Omaha, Nebraska, was recently an Academic Fellow in the Office of the Chief Accountant at the United States Securities and Exchange Commission. Those concerns followed a GCAS report "which included the frequency of certain audit findings and the recurring unresolved nature of those findings," as stated in the document.
The document, "Transparency and Accountability in Financial Reporting," suggested a need to improve church leadership culture at all organizational levels, that better controls result from a better culture, that "communication is at the core of effective governance," and that the result would be greater confidence from all church stakeholders, or constituents.
"It's not an auditing issue; it's a character issue," said Juan Prestol, Adventist world church undertreasurer, during discussion of the matter. "An audit is too late," he explained to Adventist Review after his remarks, since audits only discover issues after the fact.
What is needed, he added, are "changes in the DNA of Adventist leadership."
Wilson said board members should be unafraid to question items presented to them. "On committees, ask questions. Don't assume somebody else is going to take care of it," he said.
Added North American Division President Dan Jackson, "There ought not to be friends in boardrooms ... if I sit on that board and respond to issues on that board because I'm a friend, I really have no business being on that board. You need to challenge me and do it with a smile."
Ella Simmons, a world church general vice president, stressed the need for an even higher approach. "I would challenge us to total commitment to holistic stewardship. Of course we focus on financial operations; but how can we operate [with] integrity and [in] ethical ways if we do not value ethical behavior in every area of our work, of our being, our relationships, our quality in performance. It must be holistic," she said.
Wilson promised further discussions on the subject at the 2011 Annual Council, to be held in October in Silver Spring, Maryland.
In an earlier address, Lemon said the church's finances showed improvement in 2010.
"Worldwide tithe passed the US$2 billion mark in 2010," Lemon said. "In spite of the recession and slow recovery of the economy in the U.S., the economies of most of the countries of the world have continued to be strong," he said.
That strength is reflected in tithe and offering figures, he added. Worldwide tithe rose 8.2 percent, totaling U.S. $2.002 billion. Tithe in the North American Division increased 1.1 percent over 2009, totaling U.S. $887 million in 2010 compared to U.S. $877 million the previous year. Tithe from divisions outside of North America rose 14.6 percent and totaled U.S. $1.114 billion compared to U.S. $972 million.
The exchange rate to the U.S. dollar explains some of the increase, but "much of it was from increases in local currencies," Lemon said.
"It is inspiring to see the faithfulness of God's children in returning their tithes and giving offerings for the support of His work even in tough times," Lemon added.
Lemon also noted that costs to the world headquarters for the 2010 General Conference Session in Atlanta, George, though budgeted at US$6.2 million came in under budget at US$5.5 million.
Independent auditors for the General Conference, as well as the various pension plan funds associated with the world headquarters and the North American Division, gave all accounts unqualified positive opinions that generally accepted accounting principles were met across the board.
Undertreasurer Prestol added that the General Conference's balance sheet, for the first three months of 2011, "is $2.6 million to the good," which he said means the organization is "doing very well" so far.
Click here to read the full treasurer's report.