For the third year running, financial reports from the Southern Baptist Convention’s Executive Committee are missing from the annual SBC Ministry Reports website.
An introductory paragraph to the website says: “The 2024 Ministry Report is the compilation of SBC entity responses to questions, and related reports, presented in separate groupings. These groupings are: President’s Letter, Ministry Inquiries, Ministry Goals and Accomplishments, and Financial Statements. Each seminary includes an additional report: Seminary Formula and ATS Report.”
Yet under the menu for the Executive Committee’s report there is no tab for financial statements this year. For the previous two years — 2022 and 2023 — the tabs are present but carry this note: “The current SBC Executive Committee audit was not available at the time of posting but will be posted once received.”
Two and three years later, the financial information has not been posted as promised.
The last time the Executive Committee posted its financial audit on the SBC Ministry Reports site was in 2021, which was for the combined years ended Sept. 30, 2019 and 2020.
The media spokesman for the Executive Committee did not respond to BNG’s request for an explanation.
However, the Executive Committee did include its audited financial statements for the year ended Sept. 30, 2022, in the 2023 SBC Annual that was published online Jan. 9. That audit shows a net decrease in assets of $6.22 million from 2021 to 2022. A nearly equivalent amount is listed under income as “proceeds from sales of investments.”
“A continued decline in liquidity of this magnitude in subsequent years is not sustainable.”
Regarding liquidity as measured by “net financial assets available within one year,” available resources declined in one year from $12.1 million to $5.9 million.
The auditor’s note offers a stark assessment: “This decline in liquidity and financial position is largely due to the legal and other costs incurred in connection with the matters described in Notes 3 and 4. A continued decline in liquidity of this magnitude in subsequent years is not sustainable. To mitigate against future similar declines in liquidity, management intends to carefully monitor costs and reduce operating expenses; consider selling significant assets (such as real estate); and seek additional funding from the Southern Baptist Convention and its cooperating ministries.”
The fine print of the auditor’s report gives further explanation to the financial distress placed upon the SBC Committee due to the Guidepost Solutions independent investigation of sexual abuse cases and subsequent legal fees, including defending against an investigation by the U.S. Department of Justice.
In total, for the two-year period ended Sept. 30, 2022, the Executive Committee had expended the following in “costs and expenses”:
- $2,050,000 for the Guidepost investigation
- $2,570,000 for other legal services related to these matters
The note continues: “Management is unable to estimate the total costs and expenses to be incurred for legal services related to these matters subsequent to September 30, 2022.”
The next section is titled “Federal Investigation” and explains: “The United States Attorney’s Office for the Southern District of New York commenced a grand jury investigation into the Southern Baptist Convention, including into the Executive Committee, during the year ended September 30, 2022. SDNY has expressed interest in publicly reported allegations of sexual abuse linked to SBC entities and any possible cover-ups, concealment, and/or mistreatment of sexual abuse survivors and how any of those issues might have impacted financial giving to the SBC Cooperative Program. … The Executive Committee is cooperating with SDNY in an effort to reach an efficient and favorable outcome. The investigation remains ongoing and, given the subject matter and time span, management is unable to estimate an end date.”
In addition to the expenses outlined above, the auditors say the Executive Committee spent about $130,000 related to the federal investigation prior to Sept. 30, 2022, and another $1.2 million “for legal services in connection with this matter” after that date.
That means, all told, the Executive Committee spent at least $5.95 million on sexual abuse-related matters through the end of 2022. No information is publicly available about what additional expenses may have been incurred in 2023 and thus far in 2024.
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