On Apr. 18, 2004, the audited statements for the years 2001, (qualified for inadequacies in the plant fund), 2002, and 2003, (both receiving disclaimers), were presented to the Lake Region Conference Constituency Session in South Bend, Ind. One of the recommendations by General Conference (GC) Auditing Services, who conducted the yearly audits, was to implement an accounting practice to include in the statement properties held by the Lake Region Conference Association, along with scheduled depreciation, in order to provide a clearer picture of the financial worth of the conference. The conference property, although accounted for, had not been entered in this way since the conference was formed in 1946, nor is there any requirement or regulation to do so. The recommended accounting practice has now been implemented and appears in the 2004 year-end statement as $18 million in property assets under scheduled depreciation.

In response to concern over the status of the aforementioned audits, the Lake Region Conference administration, under the direction of Norman Miles, entered a request to the Lake Union administration for special assistance on Oct. 21, 2004, to further review the financial audits and records for the years 2001–2003. Union administration conveyed Miles’ request to the Lake Union Executive Committee at their Nov. 17, 2004, meeting.

At the recommendation of GC Auditing Services, Union administration secured the services of an independent auditor to begin a detailed financial review, pending the completion of the 2004 audited statement. The audited statement for 2004, which also carried a disclaimer, was presented at a special Lake Region Conference Executive Committee meeting Mar. 6, 2005.

The detailed financial review began in Apr. 2005. As the review continued, a number of anomalies were revealed and conveyed to conference administration. The conference administration then responded to the information and reported to the Lake Region Conference Executive Committee, who took official actions.

Following the guidelines of the working policy of the North American Division, Lake Region Conference administration, through the services of legal counsel, submitted the initial findings of alleged illegal activities to the authorities on July 26, 2005. Since that time, the Lake Region Conference has turned over additional evidence and will continue to do so during its ongoing detailed financial review.

Following is a statement released on Aug. 23, 2005, by the office of Barclay-Dixon, legal counsel for the Lake Region Conference:

“Currently, there is a detailed financial review being conducted relative to the employment and financial issues raised at the July 24, 2005, constituency meeting. Based upon the seriousness of the allegations, the Executive Committee has taken appropriate action to ensure the integrity of the Lake Region Conference. Due to the sensitive nature of certain matters, further investigation is warranted in order to safeguard and protect the rights of all parties involved. We solicit your prayers that God will continue to provide wisdom and strength during this challenging time.”

As with each organizational unit of the Seventh-day Adventist Church, the Lake Region Conference operates under its own jurisdiction. Conference offices in the Seventh-day Adventist Church are managed by officials, elected by local church delegates, operating under a constitution and by-laws of that particular conference. These elected officials, also known as the conference administration, report to the conference executive committee. The conference executive committee, made up of representatives from local churches and church employees who are elected under the provisions of the constitution and by-laws, is ultimately responsible for the operation of the conference.

Local conferences in North America are organized into nine union headquarters by geographic location. Five conferences (Illinois, Indiana, Lake Region, Michigan, and Wisconsin) are banded together to form the Lake Union Headquarters. These five conferences, though operating independently and accountable to their own constituents, form an administrative counsel under the direction of Lake Union officials to optimize effectiveness in accomplishing their missions.

In this capacity, the Lake Union administration, specifically the departments of treasury and Hispanic ministries, is giving additional support to the Lake Region Conference staff. During the ongoing detailed financial review, Lake Union administration will continue to report the findings of the review to conference administration. To date, all actions taken by the conference executive committee, as a result of the review, were taken under the chair of the acting conference president. The Lake Union Executive Committee is also being apprised of the progress and outcome of the review—the most recent meeting being Aug. 17, 2005.

“Our desire,” comments Walter Wright, Lake Union president, “is to provide requested assistance to help stabilize the Lake Region Conference so that it can get back to its mission to inform people of the love of Jesus Christ and His soon return.”

Gary Burns, Lake Union Conference communication director