Audit clears the Rev. Armstrong

An independent forensic audit requested by a breakaway Episcopal congregation found no wrongdoing by the Rev. Donald Armstrong, accused of stealing nearly $400,000 from Grace Church and St. Stephen’s Parish.

There was no theft or tax fraud found, according to a statement about the audit released Tuesday. The audit, conducted for Grace Church CANA vestry and Armstrong’s attorney Dennis Hartley, was done by Robert D. Johnson, a Colorado Springs certified public accountant.

His audit found that six counts against Armstrong presented by the Episcopal Diocese of Colorado in an ecclesiastical court had reasonable explanations and that financial transactions had been approved by parish officials.

“I am grateful for this report, for its clarity and completeness in addressing the false accusations against me and our vestry by the Diocese of Colorado, its Bishop, and their representatives,” Armstrong said in a statement.

In March, Armstrong and a majority of the Grace vestry, its directors, left the Episcopal Diocese and formed the congregation of Grace Church that is affiliated with the conservative Convocation of Anglicans in North America (CANA).

Grace CANA’s Senior Warden, Jon Wroblewski, said, “The vestry is delighted to see the good name of our rector and priest of twenty years cleared of the allegations of fraud and theft.”

Johnson’s audit of Grace Church is at odds with a 2006 audit by a Denver accountant commissioned by the Episcopal Diocese of Colorado that found financial irregularities. Because of that audit and a diocesan investigation, an ecclesiastical court in August convicted Armstrong of theft. The court recommended that Bishop Robert O’Neill defrock Armstrong.

The diocese stands by its audit, spokeswoman Beckett Stokes said Tuesday. “Bishop O’Neill today expressed his confidence that the criminal justice system will respond appropriately.”

The diocese filed a complaint in July with Colorado Springs police. Police said Tuesday that the investigation is ongoing.

At least one Grace Episcopal Church member is skeptical of Johnson’s audit. “If there was not sufficient evidence to indicate problems, police and IRS (Internal Revenue Service) investigations would not have proceeded,” said Clelia de-Moraes, Grace Episcopal senior warden.

The Ecclesiastical Court of the Diocese of Colorado, made up of clergy and lay church members, said Armstrong underreported his income to the IRS; received $392,410 from the church without authorization; received illegal loans totaling $122,479; and encumbered the church with deeds of trust totaling $2.5 million without approval from the bishop of the Standing Committee of the Colorado diocese.

Alan R. Crippen II, a Grace CANA ordained deacon and spokesman, said the Grace CANA audit results were given to CANA Bishop Martyn Minns, who had requested Grace CANA address the allegations brought against Armstrong.

The audit for Grace CANA comes a week before O’Neill is set to pronounce sentence as the final step in the disciplinary process outlined in the canons of the Episcopal Church.

The bishop can either concur or lessen the ecclesiastical court’s sentence, although it’s a symbolic action because Armstrong left the diocese.

The Grace CANA congregation meets in the historic church on Tejon Street, and Grace Episcopal Church meets elsewhere while a lawsuit is pending to determine who owns the $17 million property.

Grace CANA Church says it has spent $400,000 to $500,000 this year on legal fees and updating its accounting practices.

In the past decade, the ordination of gay clergy and other theological issues have prompted hundreds of congregations to break away from Episcopal parishes nationwide, including several in the Diocese of Colorado. Armstrong has maintained he was targeted by the diocese because of his conservative views.

“I am sorry that this theological conflict in the larger Episcopal Church has reached its hand down into our own parish and played itself out in such a destructive and divisive end,” Armstrong stated.

He also apologized to the congregation for the turmoil.

The diocese has said theology had nothing to do with its audit and financial allegations against Armstrong.

CONTACT THE WRITER: 636-0371 or carol.mcgraw@gazette.com