Failure of Oversight: Finance Manager Steals $1.6 Million from Fellowship Church

The Crime

After pleading guilty to embezzling church funds, Lara Ford, former business manager and staff services manager at Fellowship Church in Grapevine, Texas, has been sentenced to ten years in prison with the opportunity for early release after serving six months.

An August 26, 2019 updated police report indicated a “total loss of $1,377,14.76” … but the total continued to grow as the investigation continued. Ford’s attorney Lex Johnson told The Roys Report that more than $1.6 million was stolen.

According to the police report, Ford “made transfers to her own checking accounts once or twice a month for the past 7 to 8 years. The amounts were reportedly between $1500 and $1700.”

Ford used Automated Clearing House to transfer at least $363,834 from the church’s Allaso Ranch account and $324,313 from another church account to her personal bank accounts. The thefts were disguised as payments to vendors and refunds for children unable to attend the church camp.

Ford also stole cash from offerings and embezzled money from the church’s housing allowance account, which raises additional questions. According to the police report, Fellowship Church used Automatic Data Processing LLC (ADP) to manage “some of the church’s payroll, mainly the housing allowance about 30 employees receive.”

Is the clergy housing allowance being abused? Are non-clergy employees receiving housing allowances?

A Failure of Church Leadership

Churches should have safeguards to prevent or minimize this kind of massive institutional theft and should hold church leaders accountable that failed to catch this embezzlement earlier.

If the problems start at the top, we should start with the pastor, his closest associates and the church board of directors.

Fellowship Church is one of America’s largest multisite megachurches. Its senior pastor is Ed Young Jr., a televangelist infamous for staging publicity stunts. In 2012, to promote his book Sexperiment, Ed and his wife Lisa spent a day in a bed located on their church roof.

Are there conflicts of interest in Young filling staff or board positions with friends or associates?

Fellowship Church’s Chief Financial Officer (CFO) Dennis Brewer Jr. is an attorney, not an accountant, following the path his father paved. A 2020 obituary recognizes Brewer Sr. as “a pioneer in the practice of Church Law.”

Brewer Jr. serves as Young’s personal attorney. Young’s company Creative Pastors is based at Brewer’s law office.

Is Brewer qualified to serve as the church CFO? Would the church be better served with an accountant in this role?

MinistryWatch president Warren Cole Smith writes in the book Faith-Based Fraud, “Accountants are trained to pay special attention to the anomalies.” It is very likely an accountant serving as CFO would have discovered Ford’s theft years earlier.

To better understand the failure in auditing and church accounting at Fellowship Church, Trinity Foundation contacted former church accountant Neil Cox for insight.

Cox faulted the church audit committee for not providing a robust system of checks and balances. So what is an audit committee?

Wikipedia explains, “An audit committee is a committee of an organization’s board of directors which is responsible for oversight of the financial reporting process, selection of the independent auditor, and receipt of audit results both internal and external.”

Church board members have fiduciary responsibility to provide financial oversight.

The Foundation Group reports, “One of the primary responsibilities of any nonprofit board member is to maintain the financial integrity of the organization they serve. Board members act as trustees of the organization’s assets and must exercise due diligence and oversight to ensure that the nonprofit is well-managed and that its financial status remains sound.”

According to the Texas Secretary of State website, Fellowship Church’s board of directors is composed of the following men:

Ed Young Jr. – Senior Pastor, President and Board Member

Mac Richard – Board Member (pastor of Lake Hills Church in Austin, Texas)

John Cross – Board Member (pastor of First Baptist Church in Sarasota, Florida)

Richard White – Board Member (pastor of The Gathering Church at Tampa Bay)

Dennis Brewer Jr. – Secretary and Chief Financial Officer (attorney at Brewer, Lang & Veach)

Besides Brewer mentioned earlier, Mac Richard also has a working relationship with Young. Together Richard and Young co-authored the book Beauty Full: Becoming More Than Just Pretty.

Now should be a time for reflection. Each church board member should consider their role in this church scandal and whether they should resign from the board.

Were the Auditors Asleep?

Ford’s attorney told the Roys Report that Stanfield + O’Dell, P.C. performed an independent audit for the church.

Stanfield + O’Dell, P.C. provides accounting services to many churches and religious organizations. Some of their better known clients are Oral Roberts Evangelistic Association, Mark Driscoll Ministries and LeSEA Global Feed the Hungry.

Because of ties to televangelists, Stanfield + O’Dell, P.C. has been on Trinity Foundation’s radar for a long time.

In a 2019 article Trinity Foundation asked the question, “Is it possible ministry auditors such as Stanfield and O’Dell or Chitwood & Chitwood also fail to properly audit ‘high risk areas ‘ “?

Stanfield + O’Dell, P.C.’s failure to uncover Ford’s theft should serve as a red flag for the accounting firm’s many clients. Is the auditing failure at Fellowship Church the tip of the iceberg?

Two different CPAs commenting on the Roys Report article suggested that Stanfield + O’Dell, P.C. could be sued for “malpractice” and reported to the Texas State Board of Public Accountancy.

Fellowship Church’s donors wishing to change church policies are left with few options. The church’s amended articles of incorporation vest decision making power in the board of directors. Donors can look for another church or withhold donations until their concerns are addressed.

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