Issues of alleged mismanagement at The Master’s University continue to be reported. According to three anonymous inside sources who are familiar with the situation, dozens of university students were reportedly given preferential financial aid due to their parents either being donors or personal friends with the university president’s family.

Previously, KHTS has been exploring the various claims of financial impropriety at Master’s University and other nonprofit organizations affiliated with Dr. John MacArthur and his son-in-law, Kory Welch.

KHTS has learned through various conversations with officials that have experience working at the Master’s University, and were privy to discussions on the financial aid allotment process, that auditors from CapinCrouse LLP — an independent CPA and consulting firm hired by the school — reportedly found over 25 separate student files that demonstrated a “conflict of interest.”

These files belonged to students receiving financial aid that the committee had been told were the children of a “buddy or donor,” according to the KHTS sources.

Related: Master’s University President Pays Son-In-Law Millions Of Dollars Through Nonprofits

Two of the sources confirmed to KHTS that a number of people within the Master’s University financial aid office had objected to this alleged practice of preferential disbursement, stating that these students did not meet the base criteria established for financial aid.

Some of these students had families making “hundreds of thousands of dollars a year,” but that they “technically” met the criteria because the prospective student would not attend Master’s University unless they received preferential financial aid.

The financial aid committee making these decisions was a four-person body with Luke Cherry, the current vice president of development at Master’s University, and Welch, the president’s son-in-law who was hired as a consultant to oversee the marketing department, as the two most influential seat-holders.

The funneling of financial aid money to the donor families or the friends of the school’s president was reportedly orchestrated in large part by MacArthur, Welch and Cherry, according to KHTS sources.

“Luke Cherry worked with a donor who was giving us several hundreds of thousands of dollars a year to ‘help students who can’t afford to attend,’” stated a KHTS source whose story was corroborated by another source. “Luke is the vice president of development but he put himself … on the committee to decide who got the funds.”

Related: More Allegations Against Master’s University Surface

Through this relationship, the financial aid department was told to give thousands and, at times, tens of thousands of dollars to donor families and personal friends of MacArthur.

This set-up allegedly eventually expanded to the children and grandchildren of board members, according to one KHTS source.

However, after the university hired CapinCrouse to conduct an independent audit of the school, their CPAs found out about this practice. The independent auditors then asked Master’s administers to hand over every file of someone receiving these funds who was a donor, related to an executive or board member, or friend of Welch.

They were given approximately 25 names and files of students who fell into those categories.

“The auditors reported to the board that … they had found a ‘conflict of interest’ and that (the board members) were told to fix it immediately,” said one of the anonymous sources, which was then corroborated by another source.

Related: Master’s University President Calls Allegations Against School ‘Untrue,’ ‘Persecution’

And while the committee reportedly underwent a changeup, with new members coming on the board to determine financial aid allocation, KHTS sources have said that the true power dynamic was never altered — Welch and Cherry continued to have a “strong influence” over financial aid decisions.

“They ignored them and though they changed who was on the committee, Kory and Luke still had approval and say of who got what,” said a KHTS source. “They just shuffled cards but still maintained control.”

These findings are consistent with what the WASC Senior College and University Commission (WSCUC) letter said was an issue of operational integrity:

“The institution’s 2017 financial audit contains a specific finding on appearance of conflicts of interest with the president’s son-in-law supervising a contract from which he benefits, as well as institutional aid that exceeds typical aid awards being awarded to friends and relatives. Of particular concern to the commission is that the auditor first identified these practices as ‘significant findings’ more than six months prior to the accreditation team’s visit and there was not sufficient evidence that solutions had been fully implemented by the institution.”

Related: Master’s University Officials Hope To ‘Mitigate Findings,’ Do Not Believe ‘Every Assertion’ In Commission’s Report

And while at least one of the sources said that they do not believe that these actions were malicious and that all financial aid grants given to students by the committee were done solely to “please” donor families or friends of the school president, it still stands to reason that there was enough concern over these student files that both WASC and the independent auditors felt the need to confront school administrators about them.

Master’s University officials did not return a request for comment by the time of publication for this story.

Ed. Note: All three sources were given the option to either confirm the information in this article or state that they were not 100 percent confident they could confirm. However, no source denied or disputed any of the information presented in this article.

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