The leaders of Harvest Bible Chapel (HBC) are seeking to get their financial house in order, so to speak. The church recently lost its seal of approval from the Evangelical Council for Financial Accountability (ECFA). On Sunday, April 27, 2019, church leaders announced they will be taking a deep dive into former Pastor James MacDonald’s discretionary account, and that they will ask him to pay the church back for “unreimbursed personal expenses.”
“The greatest area of failure to meet ECFA’s standards was in the management and control of the former Senior Pastor’s discretionary account,” a statement posted to Harvest’s website reads.
No One Was Keeping MacDonald’s Discretionary Account in Check
As the statement goes on to explain, this account was funded by money from HBC’s general fund and a smaller amount from Walk in the Word, MacDonald’s radio program. In 2018, the discretionary account received $315,000 from the general fund and $136,000 from Walk in the Word, for a total of $415,000. The problem, the statement explains, is that the account was managed by three people in 2018 who are “no longer employed” by HBC, and it was managed in a way that was “outside our standard accounting controls” with “no line-item accountability.” Meaning, only three people (one of which was MacDonald) in the church knew how that money was being spent, and those three people were apparently fiercely loyal to MacDonald and his agenda. Scott Milholland, the former COO of Harvest, was one of the three. He resigned in December, before MacDonald left, citing a desire to go serve elsewhere due to his role at Harvest no longer being “the best fit.”
Milholland’s departure would serve as a foreshadowing of the departures to take place within the leadership of HBC in the coming months. Members of the elder board as well as several staff members have left HBC this year.
The question arises why the ECFA deemed HBC fit in December of 2018. The organization had been tipped there was something suspicious going on with HBC’s finances and so made some inquiries regarding their seven standards for financially responsible organizations. The elder statement explains the “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, in January former employees started giving HBC information about how the money from the discretionary account had been spent and managed. HBC leaders shared their newfound information with the ECFA, who suspended their membership. On April 15, 2019, after a phone call during which the ECFA learned even more information about the account, HBC’s accreditation status was terminated.
What’s the Next Step for Harvest?
As far as moving forward is going, the leadership has taken a few steps. Namely, they have closed out the discretionary account and cut off the credit cards attached to it. That seems easy compared to the other, potentially monumental task they have undertaken: They are combing through the last four years of activity on the account. “If items were classified as expenses rather than taxable fringe benefits, we will adjust tax documentation to be accurate,” the statement explains. Additionally, the new elder board is tasked with changing the church’s bylaws “to ensure that something like this can never happen again.”
Church leaders have also hired an external law firm that has commissioned an “out-of-state account firm that specializes in not-for-profit organizations and forensic accounting” to conduct a review of the church. The findings from this review will then be presented by the law firm to the leadership of the church, the church’s auditor and the congregation.
Oh, and one more thing: “Harvest Bible Chapel will seek reimbursement from James MacDonald if any items are deemed by the accounting firm to be unreimbursed personal expenses.” That interaction may be interesting to follow, given MacDonald’s history of angry outbursts.
The statement concludes that once changes are implemented, the church is “eager to re-apply for membership with the ECFA.”