Lutheran World Relief & IMA World Health

CharityWatch's rating of Lutheran World Relief & IMA World Health includes the financial activities of the entities consolidated in the Corus International & Affiliates audited financial statements for the fiscal year ended September 30, 2024. These entities include the 501(c)(3) public charities: Lutheran World Relief, Interchurch Medical Assistance (IMA World Health), Corus International, and Corus Solutions. (See below for more details.) All material intercompany transactions and balances have been eliminated in the audit consolidation.

[More information on CharityWatch's Treatment of Related Organizations can be found on the Our Process page.]

According to the Corus International & Affiliates consolidated audit of September 30, 2024 (Note 1, Corus International, Inc., Organization):

"On October 1, 2019, Corus International, Inc. ('Corus') was formed as the parent company of Lutheran World Relief ('LWR') and IMA World Health ('IMA') and their subsidiaries...

...Corus is an ensemble of faith-based organizations working in concert to deliver the holistic, lasting solutions needed to overcome these interrelated challenges. Together with local partners, Corus helps reduce poverty at the same time as improving communities' health...

...IMA (also d/b/a IMA World Health), is a Washington D.C. based international church membership non-profit organization that provides health services and build[s] healthy communities around the world...

...The joining of LWR and IMA was a natural fit of both organizations['] missions and values to work in partnership to reach more of the world's most vulnerable."

As part of our evaluation of Lutheran World Relief & IMA World Health (the Organization), CharityWatch analyzed the Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control over Compliance Required by the Uniform Guidance, and Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.

According to the Schedule of Findings and Questioned Costs, Section I - Summary of Auditor's Results of the Independent Auditor's Report for fiscal 2024, a Material Weakness was identified in relation to the Organization's Consolidated Financial Statements pertaining to its Financial Reporting Close Process:

According to Section II - Financial Statement Findings - Finding No. 2024-001 - Financial Reporting Close Process (Material Weakness):

"Criteria: Corus should implement financial management systems that provide effective controls over accountability for all funds, property and other assets. These controls should follow the internal control integrated framework. Additionally, the preparation of the consolidated financial statements is the responsibility of management, including management’s assertions that the consolidated financial statements are complete, accurate, relevant and timely, and that the information presented in the consolidated financial statements is presented in accordance with generally accepted accounting principles. Furthermore, these standards require the entity to take prompt action to address findings identified.

Condition: During the audit of Corus’ consolidated financial statements for the year ended September 30, 2024, BDO encountered significant delays in the receipt of the consolidated financial statements. BDO noted the financial reporting close process, and related reconciliations of underlying account balances, including intercompany balances, grants and contributions receivables, accounts payable and accrued expenses, and refundable advances for program expenses were significantly delayed, and ultimately resulted in a significant number of post-closing management adjustments. We believe this has resulted from significant turnover of the accounting staff from January 2023 forward and due to inherent system limitations. The issues surrounded the following:

a) certain adjustments made annually at the consolidated financial statement level and not periodically throughout the fiscal year on the general ledger, and analysis of detailed net asset rollforward particularly ensuring reconciliation of beginning balances, transactions during the year (including net assets released from restrictions) and final balances to the draft consolidated financial statements;

b) timely and accurate reporting of field finance activities;

c) full reconciliation of accounts particularly the intercompany, grants and contributions receivables, inventory of materials for distribution, other assets, refundable advances for program purposes, and accounts payable account to gain an in depth understanding of actual costs related to subsidiary activities;

d) review of long outstanding receivables and payables and proper-cut-off;

e) proper revenue recognition; f) analysis and allocation of functional expenses;

g) Corus’ failure to file debt covenant administrative requirements for the years ended September 30, 2024 and 2023.

We also noted during our walkthrough of information technology general controls that Corus did not have adequate controls in place to deactivate and remove terminated financial accounting system users. Additionally, there was no evidence of a periodic review of user access and administrative rights performed during 2024.

The limitations noted above, in aggregate, increase the risk for misstatement of the consolidated financial statements, as well as in producing, complete, accurate, timely and relevant consolidated financial statements to the users or decision-makers.

Cause: There has been significant activity at Corus over the past six years, including a significant business combination, multiple investments in entities, and significant turnover of key personnel throughout the finance and accounting department. This combination has resulted in the finance and accounting department struggling to maintain adequate books and records. Experienced personnel have continued to leave Corus resulting in ongoing challenges in performing day-to-day accounting activities given personnel changes and the underlying complexities of the operations. Additionally, there are certain system limitations that continue to impact Corus’ ability to produce timely consolidated financial statements given the overall operations of Corus.

Effect: The limitations noted above, in aggregate, increases the risk for misstatement of the consolidated financial statements.

Recommendation: We recommend assessing the ongoing reasons for personnel departing Corus to determine a root cause and address that identified cause. Furthermore, an assessment of ongoing system challenges should immediately be performed, and determination made of which challenges can be addressed in short, medium, and long-term. Finally, strict adherence to a monthly and annual close process should be instilled once the accounting and finance department is stabilized. We believe the combination of these three considerations will prospectively enhance the efficiency and timeliness of the financial reporting close process and thus providing accurate and timely consolidated financial statements.

We also recommend management address controls over their existing IT systems to ensure controls are in place to deactivate and remove terminated employees, as well as perform period review of user access and administrative rights of its employes..." 

To remedy the Material Weakness identified above in Section II, the Organization has implemented the following Corrective Action Plan:

"...Corus management concurs with this finding and is committed to hiring qualified personnel, developing appropriate systems and processes, and implementing effective controls to ensure accurate, complete and timely financial reporting. These improvements will be implemented to ensure compliance with donor obligations as well as providing timely and actionable financial information to Corus management. Action steps to be implemented during the Corus 2025 fiscal year include:

• In February 2025, Corus hired a Chief Financial and Administrative Office (CFAO), Robert Mooney. Rob brings expertise in financial management, organizational leadership and operational excellence spanning both nonprofits and for-profits. Prior to joining Corus, he served as a Senior Manager within a global accounting and advisory firm’s Nonprofit & Grantmaker Advisory practice, where he worked exclusively with nonprofits – both local and international, improving their performance and efficiency.

• In January 2025, Corus engaged the professionals from global consulting firm, CFGI, to critically evaluate the current state close process, make actionable and timely recommendations and oversee the implementations of close process and reporting interventions.

• In January 2025, Corus engaged an interim Global Controller and interim Director of General Accounting. These professionals have extensive technical knowledge and business transformation experience to stabilize the reporting function in partnership with the CFAO and critically evaluate processes, people and technology impacting the organization.

• Continued efforts to fill positions of Global Controller and Director of General Accounting, as well as other identified resource gaps.

• The finance department meets biweekly to discuss month end close progress to centralize communication, track progress, evaluate workloads and introduce an environment of personal accountability.

• Financial statements to be prepared monthly including statements of functional expenses and net asset reconciliations.

• Monthly reconciliations are prepared for all balance sheet accounts to support timely, accurate reporting and audit readiness.

• The international finance and revenue departments will perform quarterly pulse-checks to recalculate all project balances to test the reconciliation of accounts receivable and refundable advances for program expenses to source documents provided by the field offices and program directors.

• Management is performing internal audit reviews of revenue on a monthly basis and will engage an industry expert on revenue recognition in FY25 to assist in streamlining the process to ensure complete and accurate reporting.

• Critically assessing current ERP and integration capabilities across applications.

• Simplify and restructure chart of accounts for streamlined mapping and to reduce reporting inaccuracies due to program coding errors and ICR miscalculations.

• In June 2025, the interim director of IT implemented an organization-wide change management policy to formalize the organization's IT response to such access and termination requests..."

The above information represents only a sampling of the Independent Auditor's Report. A complete copy of the Organization's consolidated audited financial statements for the year ended September 30, 2024, along with a complete Independent Auditor's Report, is available on ProPublica’s Nonprofit Explorer website.

During a financial audit, auditors conduct various forms of sampling, which involves checking a portion of an organization's financial transactions to ensure that they are accurately recognized and recorded, that sufficient documentation exists to substantiate them, and that proper internal controls are being maintained by an organization's management. Samples are planned, selected, and evaluated for the purpose of providing an organization's auditors with statistically representative data adequate for inferring the overall accuracy of the reporting. An audit does not entail the auditors checking 100% of an organization's financial transactions to confirm the accuracy of the total of the reporting. For this reason, errors may exist in an organization's financial reporting that go undetected by its auditors.

According to the Corus International & Affiliates consolidated audit of September 30, 2024 (Note 13, Contributed Non-Financial Assets):

Corus International received non-financial assets during fiscal 2024 on which it placed a total value of $24,146,372. Of this amount, $14,554,040 was attributed to "school supply kits" and "baby carekits."

[Note: CharityWatch generally excludes the value of in-kind (non-cash) donations of goods and services from its calculations of Program % and Cost to Raise $100. More information on how grades are calculated and the treatment of in-kind donations can be found on the Our Process page.]

According to the Corus International & Affiliates consolidated audit of September 30, 2024 (Note 17, Subsequent Events):

"...On January 27, 2025, an Executive Order concerning the Reevaluation and Realignment of United States Foreign Assistance Programs initiated a 90-day “pause” on new funding obligations to facilitate a review by the new administration. Prior to the issuance of the consolidated financial statements, Corus received termination notices for six of its grants which includes four direct awards and two subawards. The unused funds from these six grants amount to approximately $5.7 million as of September 30, 2024 which was considered conditional revenues. As of April 30, 2025, the current accounts receivable balance for these terminated awards is $1.8 million which is in process for collection with termination settlement/final billings. Management is currently assessing the implications of these terminations on the projected decrease in grants and contracts revenue, as well as the corresponding program expenses for the year ending September 30, 2025. Management believes that the loss of federal grant revenue from these six grants does not pose a material risk to Corus’ financial position as of September 30, 2024."

According to the Lutheran World Relief (LWR) tax filing for the fiscal year ended September 30, 2024, LWR reports re: Compensation, Supplemental Information (IRS Form 990, Schedule J, Part III):

Regarding severance payments to officers, directors, trustees, key employees and highest compensated employees (Schedule J, Part I, Line 4a):