THOMASVILLE, N.C. – Michael C. Blackwell, longtime president and CEO of the Baptist Children’s Homes (BCH) of North Carolina, is retiring from his post effective immediately following an independent financial review that revealed multiple instances of misuse of the organization’s funds.

An announcement from BCH on Tuesday, Sept. 19, said its board of trustees reached an agreement with Blackwell earlier in the day for Blackwell to retire effective immediately. Blackwell has been on a leave of absence since May 26.   

The announcement said, “Both parties have agreed that moving in the direction of new leadership is in the best interest of the organization and its mission of  ‘sharing hope…changing lives.’”

“While the outcome of this review was disappointing, the action taken by the trustees clearly prioritizes that the integrity of the BCH mission and, most importantly, our commitment to the children and families we serve comes first,” Gayla Freeman, chair of the BCH executive committee, said in a statement. “It is our hope that this is the first step in rebuilding trust with our supporters, partners and NC Baptists who have faithfully stood with us to minister to the needs of the most vulnerable while showing them God’s unconditional love.”

Freeman added that the misuse of funds was “not systemic.”

“We have concluded from the review that the misuse of funds was isolated to the former President/CEO and was not systemic,” Freeman said.

The announcement said the independent financial review involved a forensic accountant’s assessment of specific organizational expenditures by Blackwell and “the findings substantiated multiple instances of misuse directly conflicting with both BCH policies and Blackwell’s fiduciary duties.” 

BCH officials also released a detailed summary of the financial review, which was conducted by the Schell Bray law practice. The summary’s findings focus on three primary areas: the use of a special fund established in 2004 for Blackwell’s “personal and professional” use, credit card expenses charged to BCH operational expenses, and vehicle purchases for Blackwell and his wife.

In an email statement sent to some Baptist State Convention of North Carolina leaders as well as the Biblical Recorder about three hours after BCH’s announcement was made public, Blackwell said that he “had never deliberately done anything to bring harm to this ministry that is so deeply personal to me.”

Blackwell said he shared that sentiment with members of the BCH board of trustees when he was invited to meet with them during a special called meeting that was held in closed session on Thursday, Sept. 13.

In his statement, Blackwell acknowledged the existence of a “special Discretionary Fund” and said he “never stepped outside the original, established parameters and purpose of the Fund.”

Blackwell added that at some point he “did determine that some charges were, indeed, personal. I made note of those and reimbursed BCH for those charges.”

He added: “There was no intentional misuse of funds.”

In a follow-up interview with the Recorder, Blackwell reiterated the claims he made in his statement.

“There were some misunderstandings, [but] there certainly was no deliberate misuse of anything, ever on my part,” Blackwell told the Recorder. “I love BCH, and I always will.”

Blackwell said he saw a copy of the financial review summary through communication that was sent to his attorney before the summary was made public. Blackwell also said he did not address the BCH board during a meeting held Tuesday, Sept. 19, prior to the release of the announcement related to his retirement.

Blackwell also said the decision to retire was his.

“I retired on my own,” Blackwell said. “That was my decision.”

Under terms of the separation, Blackwell has agreed to reimburse BCH in full for the funds that were identified. Additionally, he will pay the appropriate amount of applicable taxes. Blackwell’s final compensation will only consist of that which is required by law, and BCH policy regarding accrued vacation and sick time, the statement said.

The review also determined that BCH’s bylaws, as currently written, give the president/CEO position too wide a margin of financial authority.

Freeman said the BCH board is in the process of developing a plan for updating and strengthening governing structures to establish the degree of oversight that is essential for an organization of the BCH’s size and scope.

The BCH’s announcement also said a search committee would be formed “in the coming weeks” to identify a new executive leader for the organization.

BCH Chief Operating Officer Keith Henry and Executive Vice President for Development Brenda Gray, who have shared presidential responsibilities since Blackwell’s leave began in May, will continue to lead the organization in the interim.

“The ministry of Baptist Children’s Homes of North Carolina is bigger than any one individual – it is God’s ministry,” Freeman said in the release. “We know that He is already going before us. We humbly ask for your prayers and for you to continue to stand alongside us as we minister to those we serve now and to those who will turn to us in the season ahead.”

Blackwell, 81, is the longest-tenured president in BCH history, having led the organization for nearly 40 years. A native of Gastonia, Blackwell became BCH’s eighth president on July 1, 1983.

After the BCH announced on May 26 that Blackwell was taking a “voluntary leave of absence”, BCH officials released a statement one week later on June 2 saying that its executive committee had recently commissioned an independent financial review and Blackwell’s leave was “to support the integrity of the review process.”

The summary of the financial review states that the BCH executive committee decided to pursue a financial investigation on May 26. At that time, Blackwell was given the option of taking a leave of absence with pay during the investigation, and if he refused, he would be suspended with pay, the summary states.

Days prior to the BCH launching the financial investigation, the executive committee of the Baptist State Convention of North Carolina’s board of directors passed a motion during a meeting held May 23 encouraging the BCH executive committee to conduct an independent financial review. The motion came after N.C. Baptist Executive Director-Treasurer Todd Unzicker shared with the committee that he had been presented with allegations of financial mismanagement involving Blackwell during the week of May 15.

The motion passed by the N.C. Baptist executive committee was not binding upon the children’s homes. The Baptist Children’s Homes of North Carolina is a separate but related entity of the Baptist State Convention of North Carolina. A portion of BCH’s funding is provided by financial gifts from N.C. Baptist churches that are given through the Cooperative Program of the state convention.

In a statement to the Biblical Recorder, Unzicker praised BCH trustees for commissioning the financial review and commended them for “taking swift action upon receiving the audit’s results.”

“It was disheartening and appalling to read a summary of actions that occurred under Dr. Blackwell’s leadership,” Unzicker said. “Transparency is the currency of trust for N.C. Baptist churches and this report clearly demonstrates that the actions of Dr. Blackwell not only represent a lack of transparency but also a misappropriation of cherished missions dollars. As heartbreaking as these actions are, it encourages me to see BCH trustees move toward a change in executive leadership and seek full restitution.”

Unzicker pledged assistance to the Baptist Children’s Homes in the days ahead and called on N.C. Baptists to join him in praying for the BCH’s ongoing ministry. 

“N.C. Baptists stand ready to assist BCH in the days ahead as they work to change their policies and set a new direction,” Unzicker said. “Please join me in praying for wisdom for them in the days ahead.”

The Baptist Children’s Homes of North Carolina was established in 1885 as a single orphanage in Thomasville. BCH has grown from its inaugural location into one of the southeast’s largest child care organizations, located in 35 communities in North Carolina, South Carolina and Guatemala.

The nonprofit organization, which is fueled by charitable funding provided by churches and donors, offers help and hope to children, families, single mothers, expectant mothers, adoptive families, college students, intellectually and developmentally disabled adults, and aging adults.

(EDITOR’S NOTE – This article has been corrected to indicate that Michael C. Blackwell saw a copy of the financial review summary before it was made public. An earlier version of this article indicated that Blackwell did not see the summary before it was made public. The BR regrets the error. This article was also updated on Wednesday, Sept. 20, to include statements and comments by Blackwell, other updates and additional background information. This is a developing story. Check back for future updates.)