Big shakeup at Moody!

In this article, Julie (“Up for Debate”) Roys revealed she has been terminated by the Board after she brought the results of her own investigation to them. She wrote:

I sent an email to Ken Heulitt, MBI chief financial officer, and Brian Regnerus MBI director of strategic communications, asking for details of this investigation and clarification about Jenkins’ use of the suite, but received no response. I also asked Trustee Emeritus Paul Johnson, who reportedly knew about the MBI investigation, if he would be willing to talk to me about it, but he did not respond.

Then yesterday at noon, I received an email from Greg Thornton, MBI senior vice president of media, informing me that “after consulting with the Executive Committee of the Moody Board, leadership is terminating your employment.” No reason was given and I was informed that my boss, Program Manager Dan Craig would be at my house in two-and-a-half hours to pick up my laptop..

She summarized:

From maintaining a luxury suite for a famous board member to questionable loans to officers and targeting whistleblowers, MBI leadership has overseen a system of perks, privileges, and punishment that’s an affront to the gospel. And sadly, this web of influence and corruption has not only hampered the board’s ability to deal with the current crisisfacing the institute, but contributed to it.

See also Robert Gagnon’s comments …

Moody has some amazing profs, supporters, and radio stations. But Moody has some serious problems and compromises. Please join me in praying that the board of Directors will be burdened to address Moody’s compromises and, with God’s help, set it on a better track.

I am a Moody Alumni, and I was very pleased with the solid education I received then, graduating in 1979. But things have changed, but much of the “old Moody” remains and has the potential to be rekindled. My prayer is that the doctrinal/ethical issues are front and center, and not just administrative or financial decisions.

First of all, if the wiki page is indicative, Moody went off its intended course of training “gap men” between pastors and laity a long time ago—the predominant product of the school seems to have become pastors and missionaries a long time ago.

There is a lesson there, but I don’t know enough to do much more than guess about what this means.

The nasty warning sign here, however, is that an institution whose budget must be in the tens of millions of dollars is apparently not hiring a competent accountant to check their books, and they’ve also hired a bunch of guys who are apparently not up to speed on nonprofit law. It reminds me a lot of the brouhaha about five years back at Harvest Bible Chapel when James MacDonald decided that it was grounds for excommunication when a few elders decided they’d like to actually look at the church budget before approving it.

Wanna guess where MacDonald’s radio show originated? So I would guess this could well be the tip of an iceberg. Hopefully, people at Moody not only figure out what was wrong with their culture and how to fix it, but also encourage those contributing to them to do the same.

Since my wife graduated with a degree in urban ministries at MBI back in 1995, we have a vested interest in what goes on at her alma mater, especially with those who teach courses and oversee the urban ministries major, which has received some negative attention and some have accused of espousing liberation theology, social gospel and a progressive political bent, while neglecting a gospel-centered approach. At least from the letter, I can cross out the liberation theology accusation, but not necessarily the social gospel and progressive political bent (encouraging students to publicly hold protests on campus by walking out of chapel shouting HANDS-UP, DON’T SHOOT) Here is the link from a former student that graduated from the urban ministries major.

I am attempting to connect with a few people from Chicago and a few that I know who recently graduated from Moody to get their views about what’s been going on.

For the fiscal year ended 6/30/2017, Moody’s revenue was $111,272,000 per their Form 990.

Of that amount, only $21,571,000 was from tuition & student fees.

$42,254,000 was from contributions, $33,117,000 was from the sale of literature and auxiliary services. The balance was from investment income, other public services, and miscellaneous.

MBI would’ve been audited by an independent accounting firm. Whether MBI had competent accountants and financial managers, I cannot say. If the auditors were any good, they would’ve commented on it in their management letter to the board, which we are unlikely to see since it is private. At the end of the day, if there were any comments by the auditors about strange or illegal financial practices, it is up to the board to implement change - unless the board is involved. If there were illegal financial practices, the auditors would’ve disclosed it to the proper authorities. So far, I’ve yet to see where MBI is being investigated for illegalities.

Seems to me this is more of a governance issue than a legal problem. Either way, it is a sad situation.

Mmartin, keep in mind that the audits are only as good as those doing and receiving them, no? Recipients might also include the IRS and EFCA, and my take here is that when you have abrupt resignations and firings without clear explanation, something more interesting is going on.

I notice as well that part of the reason for ignoring Roys’ feedback was that she hadn’t followed proper protocols. Reminds me a bit of this conversation at SI (among others); it’s at least believable that she would have heard this, in my view. And if there’s something very significant going on here—again, those abrupt resignations—it’s another reason that we need to ask ourselves whether our protocols are really Biblical or necessary.

She had also posted this the day before the meeting:

http://julieroys.com/luxury-suite-questionable-loans-officers-gambling-…

For the fiscal year ended 6/30/2017, Moody’s revenue was $111,272,000 per their Form 990.

Of that amount, only $21,571,000 was from tuition & student fees. $42,254,000 was from contributions, $33,117,000 was from the sale of literature and auxiliary services. The balance was from investment income, other public services, and miscellaneous.

MBI would’ve been audited by an independent accounting firm. Whether MBI had competent accountants and financial managers, I cannot say. If the auditors were any good, they would’ve commented on it in their management letter to the board, which we are unlikely to see since it is private. At the end of the day, if there were any comments by the auditors about strange or illegal financial practices, it is up to the board to implement change - unless the board is involved. If there were illegal financial practices, the auditors would’ve disclosed it to the proper authorities.

I’d actually argue that the relatively small amount that comes in via tuition and student fees is a good thing. After all, if the enrollment drops even modestly *cough*Northland*cough*, MBI has other financial revenue streams to help offset the hit. If the people at MBI are running their finances wisely, there should be some amount of money in an endowment for situations like that. This is all part of having a good, strong, wise Board to oversee…which, of course, seems to be an issue here.

I’d also note that as someone who has been closely involved with financial audits for nonprofits, any audit report has a standard letter about the audited reports being as accurate and correct to the best of their ability based on the provided forms, which protects the reputation of the auditors. After all, if there is broad embezzlement going on, they may not have caught it yet and that would distort the findings/result of the audit.

In my opinion - and I agree with MMartin on this - the really pertinent information is buried in the management letter, which specifically details issues deemed to be critical or significant to the client by the auditors. Furthermore, MBI is required to respond back to the auditors’ findings in writing. There are two categories that are used in the audit - Material Weakness [which designates that the company’s internal controls are dysfunctional or non-existent to the extent that it jeopardizes the financial statements prepared by the auditors] , and another term which I can’t remember right now - structural something, I think…maybe structural deficiency? I’m sure Tyler can fill us in on that.

edit - Significant Deficiency is the term. You can read a little more about the differences at this website.

As for the allegations - this entire story is just sad. I really hope that MBI is able to recover its footing and return to Biblical orthodoxy and spiritual health. It sounds like there is a lot of work to do, though.

Jay is correct about a “Material Weakness,” which are not always fun to receive or address. I agree with Jay that an organization having multiple streams of income as a means of risk mitigation.

Bert, than you for your reminder about audits being as good as those doing and receiving them. I thought I had more less said the same thing, but … Got it! ;-)!

Mmartin, yes, I did repeat about an audit being only as good as those who do and receive it, but the major thrust of my comment is that the personnel shake-up that we’ve seen lately doesn’t happen, as a rule, simply because of significant or material findings in the audit. It happened because either a quorum on the board got really mad about something, or the board was informed an investigation was occurring into their finances.

Hint; penthouse suite at Jenkins Hall, just three blocks from Chicago’s Waldorf-Astoria hotel. I don’t care whether it was devoted to Jenkins at all, though apparently it was, but what a colossal waste of money.