ERD-backed tsunami aid funds misused in India; two arrested so far

UPDATE: Statement by Episcopal Relief and Development

Update on the Church of South India

Today, Episcopal Relief & Development has learned about the arrests of two former Church of South India (CSI) employees in Chennai, India, regarding the alleged misuse of funds related to tsunami relief efforts. The arrests were part of an ongoing local police investigation initiated by CSI, a United Church and a member of the Anglican Communion.

We are in the process of filing a separate legal action in accordance with our pledge of transparency and accountability to faithfully administer the funds that are received to assist vulnerable people. Two years ago, Episcopal Relief & Development raised concerns with the Church authorities when CSI failed to complete the financial reporting and required audits outlined in our agreement. Since then, we have suspended programs with CSI as we work to appropriately account for funds allocated in the aftermath of the 2004 Indian Ocean tsunami.

In keeping with board policy, we routinely hire international accounting and auditing firms to assess multi-year and long-term program partnerships. This audit process ensures the proper use of donated funds. In the case of CSI, we did not receive the required audits and as is our policy, we suspended programs immediately in order to gain clarity about the work completed. After two years, we were forced to pursue legal action. We expect our lawsuit to be filed in India within the next few days.

This situation is highly unusual in our work. By and large, our global partners are extremely diligent in providing required reports and conducting audits. Our partnership with CSI was only a portion of our tsunami response efforts. As per standard plans and agreements, clean audits were completed with our church partners in both North India and Sri Lanka.

We hope that the Indian authorities will work quickly to resolve this matter. Episcopal Relief & Development’s sole desire is that this money be used to benefit the people who were impacted by the tsunami, as originally intended. As this is a judicial and legal matter in India, we cannot comment further about the current situation.

Episcopal Relief & Development is committed to complete transparency on behalf of those we seek to serve and our faithful donors. We are deeply grateful for their support and prayers at this time.

Episcopal Relief & Development is the international relief and development agency of the Episcopal Church of the United States. As an independent 501(c) (3) organization, Episcopal Relief & Development takes its mandate from Jesus’ words found in Matthew 25. Its programs work towards achieving the Millennium Development Goals. Together with the worldwide Church and ecumenical partners, Episcopal Relief & Development strengthens communities today to meet tomorrow’s challenges. We rebuild after disasters and empower people by offering lasting solutions that fight poverty, hunger and disease, including HIV/AIDS and malaria.

Two have been arrested in India and the search is on for others after an audit of funds donated by Episcopal Relief and Development (ERD) revealed misuse at the local level, news services there report.

ERD had apparently donated funds to the Church of South India for tsunami rehabilitation work at some point in the past. (In terms of amounts given, local news sources are at odds.) Project money in this case went to development work in the coastal city of Chennai, targeting 22 dioceses.

According to a senior police officer with the Central Crime Branch,

Recently new office-bearers assumed responsibility of administering the church and approached the US funding agency for more money to complete the ongoing rehabilitation work. However, officials at the ERD sought the account summary for the money allotted earlier and the work done till date. The [CSI’s] church secretary Moses Jayakumar asked his predecessor [former CSI General Secretary Dr. Pauline Sathiamurthy] to submit the accounts, but she refused claiming that the ERD funds were allotted to her in individual capacity and argued that she was not accountable to the church office bearers. This led to a tussle and an internal audit carried out by the new office bearers revealed a mismatch in funds allotted and the rehabilitation work completed.

According to Express News Service, the fund had been intended

…for rehabilitating victims by constructing houses, buying them boats, fishing nets and medical facilities in 2005.

The fund was allocated to 22 dioceses of the CSI in Tamil Nadu, Kerala, Puducherry and Andhra Pradesh.

In the aftermath of Secretary Jayakumar’s investigation, two persons were remanded to police custody and are currently in prison. Benatikta, daughter of Dr. Pauline Sathiamurthy, and a relative, Robert Sunil, have both been detained, while police are still looking for Dr. Sathiamurthy and her husband.

Police further report that both Benedicta and Sunil drew significant salaries off donated monies which were apparently used to purchase luxury automobiles.

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