WAKE FOREST, N.C. (BP)–Southeastern Baptist Theological Seminary trustees, meeting in conjunction with the inauguration of the school’s sixth president, heard a positive report from an independent auditing firm about the “high degree of integrity” with which Southeastern handles its budget and finances.
President Daniel Akin told trustees he is pleased with the results of the recent audit by independent accounting firm McGladrey and Pullen, LLP, of Raleigh, N.C. The audit included an exhaustive look at Southeastern’s financial practices that Akin said is necessary in America’s post-Enron corporate culture.
“Our simple goal was to make sure that this institution has a reputation for doing what it does with the highest degree of integrity,” Akin told the board.
During their meeting, trustees also approved a revision of Southeastern’s master plan for campus expansion and renovation, and they heard of the growth taking place in all of the school’s degree programs.
Ryan Hutchinson, vice president for administration, presented a creative plan to the board that will overhaul much of the seminary’s historic campus for $15-20 million over the next few years.
Akin said the revised master plan, which is the seminary’s long-range strategy for campus growth, will now include an extensive renovation to the existing library, rather than the construction of a new one. Whereas a new library building -– called for under the old master plan -– would cost the seminary $15-20 million, the new plan estimates that the seminary can complete seven projects for just under $21 million.
The result, Akin said, will be good financial stewardship and campus facilities that can accommodate the burgeoning student population.
“From where I sit, I’m very excited about this,” Akin said. “I think it’s a wise plan, and I think it’s a responsible plan. I believe renovating this library is a much wiser interim step than building an entirely new one. What’s remarkable to me is that for the same amount of money, we can accomplish almost all of our goals. I’m very pleased about this, and it has my very enthusiastic support.”
Much of Southeastern’s planning has been influenced by the record increases it has experienced in student enrollment, with 2,407 students this fall. Akin mentioned that the school’s number of new students is at an all-time high, including record highs in enrollment in both its D.Min. and Ph.D. programs.
The first step of the master plan is construction of a new facilities management building, which will contain Southeastern’s facilities management and housing departments, a shop area for storage and work space and a place to house the Sunshine Seniors volunteer food ministry, which gave almost a half million dollars in food to students last year.
Trustees also voted in the meeting to promote the following professors: Ken Coley, from associate professor of Christian education to professor of Christian education; Greg Lawson, from associate professor of Christian education to professor of Christian education; and Ned Matthews, from associate professor of pastoral ministries to professor of pastoral ministries.
AUDIT FINDS INTEGRITY
In reporting to the board about the audit’s findings, trustee Philip Mercer, an investment consultant from Columbia, Md., and chairman of the board’s audit and investment committee, pointed to several reasons why an extensive audit was necessary for Southeastern.
One was the much stronger accounting standards that have become the norm in corporate America in the wake of major scandals involving Fortune 500 companies like Enron and MCI-Worldcom.
Now, instead of pointing out fraud when they find it, auditors may now assume the existence of fraud until they find evidence otherwise. In Southeastern’s case, the auditors found no evidence, Mercer said.
“This is an unqualified opinion, the highest you can receive,” he said. “They absolutely said there is a high degree of integrity in what is happening here.”
Southeastern also saw the need for extending the scope of its annual audit because a new president has come on board, and the growth in the number of students and staff raised the need for more efficient accounting procedures.
During the audit process, Akin noted, questions were raised about a car that was transferred to a former staff member more than a year ago, and the taxable status of such a transaction. Because he wanted to make sure all the seminary’s dealings were open and honest, Akin directed the officials from McGladrey and Pullen, including senior partner C. Colby Daughtry, to extend their audit as far as necessary to reach the truth behind these questions.
“The auditors were offered documentation of alleged wrongdoing from a former employee,” Akin said. “I asked them to accept that offer, which they did, and to thoroughly review the business practices from my administration, the previous administration and during the interim. And they did.”
In a draft letter from the firm summarizing the results of the audit, the auditors noted that they made some “constructive suggestions” to the seminary for improving procedures but found nothing that suggested impropriety by administrators.
“We made some mistakes and we corrected them,” Akin said. “We asked the auditors to review our actions, and they found no concerns. We have instituted some new procedures to guard against making the same mistakes again.”
Mercer agreed. “There were some issues in procedures but there was no criminality whatsoever,” he said. “There were no signs of anything fraudulent or illegal. Our procedures need to be tightened up and we need to be more thorough. We have to do a better job of tracking acquisition of fixed assets, like a car.”
David Armstrong, the seminary’s comptroller, said he felt confident in the thoroughness of the audit and the administration’s attitude toward making procedural changes.
“I really appreciate Dr. Akin’s willingness to approach this head-on,” Armstrong said. “I have complete confidence in the integrity of Southeastern and in the integrity of its administration.”
Though charges of fraud and mismanagement have been directed at seminary administrators because of the gift of the car, trustee chairman Tim Lewis said he hopes this audit report can put such notions to rest.
“It is our conviction that this independent report, in its clear and unequivocal language, will expose these unfounded accusations for exactly what they are,” Lewis said.
Members of the trustee board said that after reviewing the audit, they are firmly convinced that Southeastern officials have acted with complete discretion.
“Everything was out in the open,” said trustee Terrence Collier of Pound, Va. “We had good discussions on the matter. Everything was transparent. Southeastern took all the right steps in this matter. I have complete confidence in President Akin and the seminary that they have done nothing wrong in this matter.”
James Goldston III of Raleigh, a member of the board’s executive committee, said he has no concerns about how the seminary has, or will, conduct its business affairs.
“Everything has been under a totally exhaustive audit,” Goldston said. “We spent a lot of extra time and money to have this done correctly. Everything is in the proper order. I am totally satisfied by the results of the audit.”