Harvest Bible reviewing former pastor's spending from discretionary account

The relationship between Harvest Bible Chapel and its founding pastor, James S. MacDonald, may grow even thornier, as the church announced Saturday that it may reclassify some things he spent church money on as taxable fringe benefits.

And it will seek reimbursement from MacDonald if any of the items are deemed by outside accountants to be personal expenses for which he should have repaid the church.

The news was posted on the church's website late Saturday afternoon.

The email explained why the church lost its accreditation from the Evangelical Council for Financial Accountability this month.

The "greatest area of failure" was in the management and control of a discretionary account, the statement says.

The discretionary account, with a budget of $450,000 in 2018, was part of the church's compensation budget. About 75% of its funding came from the church; the rest came from the "Walk In the Word" radio and television programs.

No line-item accountability for the account was presented to the church elders. Documentation of expenses was insufficient and inconsistent, according to the statement.

MacDonald, a former chief operating officer and MacDonald's former senior administrator controlled the account. None works for Harvest now. MacDonald, who started the church in 1988, was fired in February.

For several years, critics, including former members, have said that MacDonald had a secret account.

Christianity-oriented websites, blogs and journalists have said that MacDonald used the money for items that donors probably never expected, such as buying motorcycles that were given to other pastors, a vintage Volkswagen Beetle given to a Wheaton College professor, and personal expenses.

The ECFA suspended Harvest's membership March 11 and terminated it April 17. It said Harvest had "significant violations" of four of the council's seven standards, including complying with laws. No specifics were given.

Harvest members have asked how the church could have received approval in December after an ECFA review. Saturday's statement says information was withheld from accreditor. It does not say who withheld the information.

In mid-January, information from former employees "began to uncover" more details about the spending from and oversight of the discretionary account, the statement says.

The statement reiterated that the church has eliminated the discretionary account and closed the bank account associated with it. Credit cards used for its expenses have been eliminated.

Church leaders are reviewing every expense paid by the account for the past four years, according to the statement, to determine whether some should be reclassified as fringe benefits on which MacDonald could have to pay income tax.

A law firm is overseeing a financial review of the church, using an accounting firm that specializes in nonprofits and forensic accounting.

Under MacDonald's leadership, Harvest grew from about 28 members in 1988 in Rolling Meadows to a weekly worship attendance of more than 12,000. Besides its seven Chicago-area campuses, it had one in Naples, Florida. It also started Harvest Bible Fellowship, an organization that planted churches worldwide. It also opened Harvest Christian Academy, a day school for children in kindergarten through 12th grade, in Elgin.

The church borrowed approximately $69 million in the 2000s. It currently owes about $39 million, according to a statement posted on its website.