Gospel For Asia (GFA) is fending off accusations of financial impropriety and putting students at risk following revelations about its way of transferring money from the US to India.

The widely respected US-based mission organisation, which works in evangelism, education and community development in countries across South Asia, was found to have been sending large amounts of cash with students and staff members on mission trips. The money – as much as $135,000 – was divided between group members in packages each containing less than $5,000, the limit above which money brought into India has to be declared at customs.

US law says that sums greater than $10,000 either entering or leaving the country have to be declared and cannot be split among fellow travellers.

GFA sources told blogger Warren Throckmorton that they all "felt odd about taking the money. One person said fear of losing it or having it stolen was a constant preoccupation. They worried they were doing something that didn't sound right. Even though the leaders assured them that the practice was fine, it still didn't seem right."

Following his report, GFA leaders including David Carroll, KP Yohannan and Danny Yohannan acknowledged in a staff meeting that cash had been carried but that the practice was being discontinued. In an audio report of the meeting posted on Throckmorton's website and transcribed by him, Carroll defends GFA against allegations that it put students at risk, saying he was "truly sorry that we've given you the impression that we were endangering students" and that GFA would "never endanger students or anyone else". He also said the practice had been signed off by auditors as long as receipts were provided and was adamant that there was no attempt to avoid paying appropriate taxes.

GFA founder KP Yohannan said that all the money was accounted for and "it's not trying to be under the radar, or illegal smuggling money into the country, nothing like that".

It is not clear what benefit GFA might have gained from transferring money in this way. There are no limits to the amount of cash that can be brought into India from outside as long as it is declared and the penalty for taking more than $10,000 undeclared out of the US can be severe: according to US Customs and Border Protection, "If travelers have someone else carry the currency or monetary instrument for them, they must file a currency report for the entire amount with CBP. Failure to report may result in seizure of the currency and/or arrest." Furthermore, GFA already has substantial funds in India.

Throckmorton commented: "It is hard to understand the reason that GFA needs to get money to India. GFA sends millions to India through established channels. It seems hard to understand why donor funds have been risked in this manner."

David Carroll was asked for clarification but has not yet responded.