Bega Kwa Bega Update

June 18, 2012

Dear Partners in Ministry:

Since 1990, the Bega Kwa Bega partnership between the Saint Paul Area Synod and the Iringa Diocese of the Evangelical Lutheran Church in Tanzania has enlivened our collective ministry and brought joy, purpose, and hope to all who have been a part of it. I write to you today to share developing information about Bega Kwa Bega (BKB), its increasing financial complexity, and some changes that are presently underway to ensure that this partnership continues to flourish.

The companion synod relationship between the Saint Paul Area Synod and the Iringa Diocese is by far the largest such partnership anywhere in the ELCA. When the partnership began in 1990, two congregations were involved; today the partnership includes 66 congregations and a variety of affiliated ministries that address urgent needs in Tanzania. To date, we have channeled more than $10 million to Iringa, and in recent years have directed more than $1 million annually. The vitality and integrity of this partnership have been strengthened by the Rev. Don and Eunice Fultz, who have served as volunteer companion synod coordinators—our synod’s “boots on the ground;” by the Rev. Gary Langness, who as chair of the Iringa task force, gives coordination and direction to our partnership; and by several  others who serve as associate companion coordinators and extend our work there.

In November 2011, Gary Langness, the Rev. Tom Hansen, who was the associate companion coordinator at the time, and Trish Blomquist, who has assisted the partnership with finance, accounting, and budgeting, expressed concern about the difference between the amount of money recorded on spreadsheets and the amount of money documented on bank statements. They reported these concerns to Greg Triplett, the synod financial administrator, Beth Helgen, assistant to the bishop for administration, and to me and began making plans about conducting an investigation of the funds when they returned to Iringa at the end of the year.

After several months of examining records and bank statements, Gary reported to me that approximately  two percent of the $10 million—$212.393.35—that has moved between the Saint Paul Area Synod and Iringa in the last ten years cannot be fully accounted for. If our congregations were to ask simultaneously that their money be provided to partner parishes and other designated projects, we would be unable to immediately fund all the requests. Before any further explanations, I want to assure you of several things:

• All scholarships have been awarded to support the students for whom they were given.
• All projects have been funded in a timely manner.
• In the close examination of records, there has been found no indication of any misappropriation or diversion of funds by any person for any reason.

The following is a description of the investigation that ensued:

In January 2012, Trish Blomquist supervised an investigation of all the financial records from 2000 through 2011. Trish was well equipped to lead this investigation, having served for more than 25 years as Finance, Risk and Liability Director for the University of Minnesota’s study abroad office, with responsibility for an annual budget of $20 million. She enlisted the assistance of Gary and Carol Langness, Eunice Fultz, and Dennis Ngede. (Dennis Ngede serves as the team leader for the volunteers who work in the BKB office and is compensated by the Saint Paul Area Synod. He has been involved in the BKB partnership since 2000 and provides a link between our synod and the Iringa Diocese.) This team spent four months examining every available financial document to look for accounting errors. During that time and after their return in April when Trish continued their work, Gary and Trish have been in frequent contact in person, by phone, and by email with me as well as with Greg Triplett and Beth Helgen to answer questions we have had and to update us on their findings.

The investigation team encountered significant challenges:

• Not all records from 2000-2005 were available for review because of inconsistent and inadequate recordkeeping.
• The older, archived records had sustained water damage caused by a leaking water heater.
• Many forms were not properly filled out, making it impossible to find and document the appropriate paper trail.
• The details of the funds wired from the Saint Paul Area Synod were not always clear, causing confusion about how the funds should be applied and where to find the wire transfer on a spreadsheet.
• The daily exchange rate was not consistently noted on the requests for funds.
• The banking system in Tanzania does not conform to the same standards as banks in the United States.
• A constant flow of pastors, guests, and visitors as well as frequent power interruptions in the BKB office sometimes meant that information that was thought to have been saved and recorded on a spreadsheet was not.

The team concluded that:

• Most importantly, nothing in the investigation suggested that the money was stolen.
• The discrepancy has accumulated over 12 years.
• Most of the shortfall could be attributed
  • to an accounting system that did not support the complexity of the tasks;
  • to inadequate bookkeeping, including recordkeeping and documentation that is incomplete, or missing;
  • to the absence of consistent training and supervision of those given oversight for the funds;
  • to the fluctuation of the exchange rate, which was not recorded on a daily basis, a critical factor, since money is received and deposited in US dollars and paid out in Tanzanian Tshillings;
  • to the absence of consistent business procedures; and
  • to the difficulties understanding the accounting principles of the Tanzanian banking system.

Prior to departing Iringa in April, Trish and Gary began to put in place additional controls to ensure that BKB funds are properly accounted for. These include:

• the use of written business procedures and forms that will be evaluated on an ongoing basis;
• the employment of a part-time bookkeeper in the BKB office who will relieve the coordinator and the associate companion coordinators of some of the day to day financial duties and provide continuity in how business procedures are implemented and documented on spreadsheets;
• the expectation that all sections on request forms be completed before any funds are released;
• the development of a new financial system which will be implemented this summer;

• the specification of various levels of permission to those working with the financial system, which will eliminate many of the errors and decrease the amount of work necessary to complete the entry;
• the exploration of using online banking through Barclays Bank to assist in overcoming some of the issues of the exchange rate;
• the identification of a part-time volunteer or paid financial coordinator based in the Saint Paul Area Synod who will provide consistent and ongoing financial review and oversight; and
• the quarterly review of financial records by the synod financial administrator or another staff person designated by the bishop.