PC(USA) Fires Internal Financial Controller for Questionable Judgments

The Presbyterian Church USA fired its longtime controller for his ''errors in judgment'' surrounding the open bidding process for the external auditing of the church’s financial books; Tawfik to chall
( [email protected] ) Sep 08, 2004 03:06 PM EDT

The Presbyterian Church USA (PCUSA) fired its long-time corporate controller for “errors in judgment” surrounding the open bidding process for the external auditing of the church’s financial books. Nagy Tawfik, the Egypt-born Presbyterian who had served the church for more than 25 years, was first placed on “administrative leave” on Sept 2, and discharged this week. Tawfik, who said he was made a scapegoat in a larger church-wide scandal, said he would challenge his dismissal.

The PCUSA fired Tawfik from his job as controller, saying he mishandled the bidding process for the church’s upcoming financial audit. According to the executive director of the denomination’s General Assembly Council, Tawfik inflated the number of hours needed to conduct an audit, thereby potentially tampering with the result of the bid.

"In providing data to several accounting firms bidding to perform the annual external audit, Tawfik gave inflated estimates of the hours needed to do the work,” explained John Detterick. “These errors in judgment, which could have influenced the selection of the firm that would conduct the audit, jeopardized a fair and complete bidding process, and therefore could not be tolerated.”

However, Tawfik said he did not know how many hours the job took, and therefore his estimate was not too high or too low. He explained that the number of hours was just a guess.

"One cannot exaggerate a number he does not know," added Tawfik's lawyer, Garry Adams.

However, the denomination’s chief financial officer explained that such “errors in judgment” puts the integrity of the financial audits at stake; it is not a matter of wrong or right, good intention or bad intention, but a matter of fiduciary accountability.

“Independent audits are the hallmarks of sound financial disclosure,” said financial officer Joey Baily. "We must ensure the process of selecting an external auditor is above question.”

Audit Committee chair Karen Dimon agreed, saying: “The church’s audit process must be above reproach not only to meet our fiduciary responsibility to the General Assembly and donors, but also as a demonstration of our practice of stewardship for the resources entrusted to the church. Any interference with a full and completely fair process of accountability puts at risk the church’s ability to be transparent with donors.”

Detterick meanwhile explained that there was “no evidence that PCUSA funds have been misused” and no “reason to suspect further wrongdoing” beyond an “error in judgment.” Therefore, Detterick said a special review must be undertaken for the sake of both the church and Tawfik, so the two parties can get a “clear analysis of the situation.”

Tawfik, however, said he was fired, not for the “error in judgement,” but because he recently raised questions about the bidding procedure of the denomination itself. He took note in July that one of the firms’ estimates to audit the denomination’s various agencies was almost identical to previous payments.

“I never claimed that anybody did anything wrong, only that the numbers do not make sense." Tawfik said. "I was retaliated against because I questioned the numbers."

Tawfik also said he was singled out on the basis of his race.

"All these individuals (involved with the audit bidding process) were white," he said. "I am the only racial-ethnic individual in this group."

Tawfik, 53, said he has worked for the denomination for 25 years, including the past 16 or 17 years as controller. Tawfik said he would try to resolve the issue through internal grievance procedures.

On the part of the PCUSA, Detterick took time to praise Tawfik’s decades of service to the PCUSA.

Said Detterick: “Nagy’s concise explanations of intricate financial matters have helped those involved in the church’s budgetary process understand more clearly our complex system of funds and funding streams. Our prayers are with Nagy and his family at this time.”