From the Worldwide Faith News archives www.wfn.org
GAC and Foundation Reach Agreement on Handling of Restriced Funds
25 May 1996 05:33:22
23 May 1996
96197 GAC and Foundation Reach Agreement on Handling
of Restriced Funds
by Alexa Smith
LOUISVILLE, Ky.--An agreement hailed as the beginning of the end of the
feud between the Presbyterian Church (U.S.A.) Foundation and the General
Assembly Council (GAC) was unanimously approved this week by the executive
committees of both bodies.
Coming after months of highly publicized acrimony, the agreement
reaffirms the two entities' traditionally separate but related mission
funding responsibilites. It also puts more specific systems into place to
monitor management and disbursement of General Assembly restricted funds.
Such systems were only vaguely described in the documents that laid the
groundwork for Presbyterian reunion in 1983.
Members of the press were excluded from the approximately seven-hour
closed meeting in Chicago May 16 that led to compromises from both
negotiating teams. The Presbyterian News Service is protesting the
decision to close the meeting to the General Assembly Council Executive
The agreement reached in Chicago places enormous emphasis on joint
development of a data base to research, manage and monitor endowment and
other restricted funds held by the Foundation to pay for General Assembly
"It's not that somebody won or somebody lost ... We discussed how
things are supposed to be," Foundation President Larry Carr told the
Presbyterian News Service. He said it is now the two entities'
responsibility to "everyone and to the church to communicate as fully in
our agreement as we did in our disagreement."
The agreement specifies that:
the GAC is "the responsible body for mission allocation
decisions" and that when there
are questions or uncertainties about the "proper use or nature of
the [donor] restriction,"
the Foundation Gift Compliance Staff has the final say.
the Foundation has a "non-delegable fiduciary responsibility
regarding compliance with
donor instructions in the use of General Assembly restricted
funds." The Foundation is
also withdrawing its proposal to the Assembly to allow it to
restricted funds through middle governing bodies because the GAC
is "the responsible
body for mission allocation decisions."
"My sense is trust has been restored ... both personal and corporate,"
GAC Chair the Rev. D. William McIvor of Spokane, Wash., told the
Presbyterian News Service. McIvor said reaffirming "what we already know"
was part of that process and the other part was putting systems into place
allowing GAC and Foundation representatives to cooperate increasingly in
Those systems -- which still need refining -- are generally laid out
in a joint Foundation/GAC report to the General Assembly that came out of
the Chicago meeting. Both entities agreed to withdraw the more
confrontational recommendations each had earlier prepared for the General
The new agreement calls for:
validation by GAC financial staff that disbursements requested by
makers" are in compliance with donor restrictions before
disbursements are made. This
means, according to the denomination's chief financial officer
G.A. "Pat" Goff, revising
the process for documenting compliance and creating a process to
better link Corporate
and Administrative Services (CAS) and the Foundation.
required reporting of the actual use of restricted funds by
recipients, since, Goff said,
that is done less formally now.
creation of a joint Foundation/GAC team to computerize and code
each restricted fund
for its appropriate use (Comprehensive Analysis of Restricted
C.A.R.E.). The Foundation currently supplies the denomination
with what Carr
describes as "highly-summarized" statements.
consultation between the Foundation Gift Compliance staff and CAS
staff to define
parameters for proper use of the funds whenever there are
questions. According to Carr,
consultation now occurs most often when a gift is first received.
establishment of a joint process to review questions about prior
General Assembly restricted funds, rather than the current system
of two parallel but
isolated processes. If there is no joint determination, the
Foundation board of trustees
is to make the final decision; and, if funds need to be
replenished because of improper
use, a process will be put into place to do so.
"We've done our best in the past," said Carr, commenting on the
upcoming reliance on computer tracking and coding of funds. New computer
technologies, he said, are enabling staff to more quickly and efficiently
categorize and file information to better research, manage and monitor use
of restricted funds.
GAC Executive Director the Rev. James D. Brown told the Presbyterian
News Service that much of the dispute between the Foundation and the GAC
stems from documents written at reunion that were too vague to provide much
of a "pattern for daily living." In Chicago and in conversations between
himself and Carr prior to the Chicago meeting, Brown said, "We figured out
in some detail how to make it work.
"Its been a long time coming. And we are both humbled and grateful."
Carr agrees with that assessment. Speaking of the Chicago meeting, he
told the Presbyterian News Service, "We both came to -- for the first time
-- a real clear understanding of how our related but distinct roles can be
carried out in a constructive way."
Audits and overtures spawned by the dispute are still proceeding.
A GAC-commissioned audit -- requested by the Foundation -- to
determine if CAS is following appropriate internal procedures in the
disbursement of restricted funds is due May 30. The Foundation -- will
review a sampling of GAC disbursements to test compliance with donor
In the debate about accumulating reserves, Carr points out that both
the Synod of the Sun and the Synod of Living Waters are overturing the
General Assembly to allow the Foundation to make geographic-specific
endowments for administration by synods and presbyteries -- a stance the
Foundation took in its earlier report to the Assembly. The GAC has also
set up a plan, he added, to lower the accumulated balance by the year
When asked about damaged trust among givers in the wider church
because of bitterness expressed in this very public feud, McIvor answered,
"It's hard to measure what damage has been done. And it's hard to measure
how improvements are made. In general, we have to indicate that trust has
been restored and then act on that basis.
"It's already beginning to happen," McIvor said. "We have to begin
acting on the positive place we've reached. That may not solve it for
everyone out there. It's also incumbent upon individuals and governing
bodies [not] to harken back to the past .... If it is a new day, they have
to acknowledge it themselves."
For more information contact Presbyterian News Service
Presbyterian Church (U.S.A.), Louisville, KY 40202
phone 502-569-5504 fax 502-569-8073
E-mail PCUSA.NEWS@pcusa.org Web page: http://www.pcusa.org
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