wfn.org | Episcopalians: Berkeley at Yale criticized by Connecticut's attorney general

[dmack@episcopalchurch.org]

October 14, 2002

2002-234

Episcopalians: Berkeley at Yale criticized by Connecticut's 
attorney general

by James Solheim

(ENS) After a 10-month investigation into financial operations 
at Berkeley Divinity School (BDS) at Yale, Connecticut Attorney 
General Richard Blumenthal issued a report October 9 that 
criticized the Episcopal school for sloppy accountability. 
Officials at the Divinity School and Yale University, affiliated 
since 1971, pointed out that most of the problems cited had been 
identified and corrected earlier.

Blumenthal is demanding that the school implement reforms, 
restore more than $100,000 to a scholarship fund, and refund 
money used to pay tuition for the daughter of the former dean at 
Berkeley, Dr. William Franklin, who resigned in the face of 
criticism last December. "The message here is that we will be as 
exacting and rigorous in demanding accountability in the 
nonprofit sector as we are in the corporate sector," Blumenthal 
said.

Bishop Frederick Borsch, acting dean at Berkeley, said that 
the scholarship funds had been spent on student retreats and 
other services--and has been restored. "Nothing illegal or 
seriously unethical was done, but poor judgment was used, and 
poor standards were in place," he said.

An earlier audit by Deloitte & Touche concluded that the 
school's bookkeeping was sloppy but not necessarily negligent. A 
report of the audit and procedures committee at Berkeley, 
released October 14, concluded that "financial controls at BDS 
have been weak for a long time," pointing out that "there was no 
audit committee in place" and no finance and business manager 
accountable to the BDS board. (Both reports are available from 
BDS at 203-764-9359.) The board now has an outside auditor, an 
audit committee and is hiring a finance and business manager.

In addressing the complaint that the board was "more generous 
in compensation than the minimum required," the Berkeley 
committee's report said that "there can be differences in 
judgment as to what is appropriate compensation." The attorney 
general "recommended that board members make an offsetting 
personal donation" to cover tuition for Franklin's daughter--and 
that has been done. "There is no allegation of impropriety," the 
committee said.

On the use of scholarship funds, the committee said that the 
board's action "was a judgment call as to whether standards for 
the use of restricted funds are met" but promised "more 
discussion" on the use of those funds in the future.

"There can be no defense of poor record keeping and imprecise 
reporting," the committee's report conceded, promising 
improvements in the future. Yet the report argued that "Dean 
Franklin has acted with the highest standards of personal 
integrity and that any report to the contrary is inaccurate."

The original audit by Yale found records at Berkeley in 
disarray and criticized the school's oversight of spending and 
questionable expenditures. Yale President Richard Levin asked 
Berkeley's board to fire some administrators and Franklin but 
the board defended Franklin. Yale has subsequently renegotiated 
its affiliation agreement with Berkeley, including more 
financial oversight and a role in the selection of deans.

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--James Solheim is director of Episcopal News Service. This 
story drew on local newspaper reports.