Harvest Bible Chapel in greater Chicago says it will seek reimbursement from the megachurch’s founder James MacDonald for any personal expenses he charged to a controversial discretionary fund which were not repaid during his tenure at the church.
“As communicated before, we have hired a law firm to oversee the financial review of our church. This law firm has secured an out-of-state accounting firm that specializes in not-for-profit organizations and forensic accounting to assist in this review. The final report will be presented by the law firm to the elders, Church Leadership Team, Capin Crouse (our auditor), and the congregation at the completion of the investigation,” the church said in a statement released Saturday. “The length and scope of this investigation will be determined by the law firm. Harvest Bible Chapel will seek reimbursement from James MacDonald if any items are deemed by the accounting firm to be unreimbursed personal expenses.”
The announcement comes as the church undertakes a massive external audit of MacDonald’s use of church finances and a report that he was being paid nearly a million dollars per year in regular salary, while having access to approximately a million more in discretionary spending.
Just over a week ago, The Evangelical Council for Financial Accountability also announced that they had terminated HBC’s membership based on further investigation into the megachurch’s operation.
While an earlier report said MacDonald had access to between $800,000 to $1.2 million in discretionary funds, on top of his nearly $1 million annual salary, the church confirmed in their weekend statement that he was only given $451,000 in discretionary funds in 2018. The church also revealed that the discretionary spending account was at the crux of the ECFA’s termination of their membership.
“The greatest area of failure to meet ECFA’s standards was in the management and control of the former Senior Pastor’s discretionary account. This account was a portion of the general compensation budget and was managed and controlled exclusively by a combination of three people in 2018: the former Senior Pastor, the former Chief Operating Officer, and the former Senior Administrator to the Senior Pastor. These three people are no longer employed by Harvest Bible Chapel,” the church said.
“Expenses of this account were handled outside of our standard accounting controls, and there was no line-item accountability presented to the elders by those people. After further review, we have found the documentation of these expenses to be insufficient and inconsistent. The funding of this discretionary account for 2018 was for the amount of $451,000. That was comprised of $315,000 from HBC’s general fund and $136,000 from Walk in the Word,” leaders explained.
Church leaders said they are currently taking steps internally to ensure that financial abuse on this scale doesn’t happen again including a review of four years of expenditure by MacDonald.
“We have closed the [discretionary] bank account and eliminated any use of the credit cards that were used for expenses incurred under the former Senior Pastor’s office. This discretionary account no longer exists. Furthermore, we have begun the process of identifying every expense of this account for the past four years. If items were classified as expenses rather than taxable fringe benefits, we will adjust tax documentation to be accurate. Finally, our new elder board will be responsible for amending the by-laws to ensure that something like this can never happen again,” HBC said.
The church also said even though the ECFA found them to be in full compliance with the organization’s standards despite the financial abuse uncovered, officials did not provide the organization with sufficient details to “accurately assess” their standing.
“On December 10, 2018, ECFA requested information regarding their seven standards. ECFA did not receive the necessary information in order to accurately assess our standing as members because the detail of the usage of this discretionary account was not known. However, beginning in mid-January, information was brought forward from former employees of HBC that began to uncover more details regarding the spending and oversight of this discretionary account,” the church said.
“On March 11, 2019, during a conference call, these new details were shared with ECFA leaders leading to the suspension of HBC’s membership pending further review. On a follow up call on April 15, 2019, a clearer view of the spending and lack of oversight of this discretionary account led to the termination of HBC’s membership. The Church Leadership Team agrees this membership termination was rightful and necessary,” officials said.
The church says it is now working to regain the ECFA's seal of approval.