OCA Transition Officer issues Financial Summary Report

On August 25, 2007, OCA Transition Officer, Deacon John Zarras issued a report supplementing the report of the Organizational Task Force dated August 13, 2007.

Deacon Zarras’ report is as follows.

Financial Summary Report

2006 External Auditors’ Final Report: Auditors from Lamos, Lambrides, and Moulthrop, LLP have committed to delivering the 2006 Audit Report no later than September 4. The Acting Treasurer will provide it to members of the Holy Synod and the Metropolitan Council promptly thereafter. There are no significant changes from the Draft Report presented at the June Metropolitan Council meeting.

Temporary Accounting Assistance: As the Metropolitan Council instructed, we have recruited temporary professional accounting assistance.

We contacted and received proposals from two accounting firms recommended to us. The Acting Treasurer and the Transition Officer conducted interviews to discuss our needs and requirements. The firm of Satty, Levine & Ciacco, CPAs, P.C., from Jericho, New York, best meets our needs and has contracted to provide services. The partner directly responsible for our account will be Mr. Frank Sluter.

Satty, Levine & Ciacco provides services to numerous non-profit groups, including religious organizations, and is experienced with modern accounting software, including Blackbaud.

The anticipated cost for their services is approximately $5,000 per month. If these temporary services are required for the remainder of 2007, the total cost will be approximately $20,000. Billing for services is on an hourly basis.

Staff from Satty, Levine & Ciacco will be at the Chancery immediately after Labor Day. Their initial assignments will include production and release of the six-month income-expense budget comparison report. I have requested a detailed schedule of their activities to that end, and will share this with the Finance Committee Chair upon receipt.

When we decided to remove Fr. Strikis from the Comptroller position we expected a new qualified Treasurer on board early in the first quarter. Since this did not happen, accounting functions that only Fr. Stavros performed in the areas of endowments and trusts require additional work by our temporary accounting firm to assure that the books will be in order for a 2007 audit.

Six-month budget comparison report: Transition from the old accounting methods (cash basis) to the new accounting software (accrual basis) has taken longer than anticipated, owing in part to initial training issues, now resolved. The first and second quarter reports came from the new accounting software with assistance from external auditors and our Systems Information specialist to migrate data from the old to the new system. Effective July 1 only the new software is used for all accounting functions.

External auditors have examined our first-half-2007 budget comparison income-expense report. They recommend a series of standardized analytical tests to verify the accuracy of the first half data before publishing the report and using it for draft projections. The test will take up to three weeks, enabling the report to be published by the end of September.

Draft Projections and Tasks Going Forward: Three important tasks have been identified for accomplishment by the Finance Committee prior to the October Metropolitan Council meeting.

  1. Preparation of a Contingency Plan to account for the income shortfall caused by assessment withholding by the Midwest Diocese. Father Matthew Tate and his Committee have the preliminary six-month income-expense report to assist them with this work.
  2. Preparation of a full-year revised budget projection based on the actual results of the first six months and anticipated future events.
  3. Preparation of a 2008 Budget.

With the addition of a full time Treasurer in the fourth quarter, we expect to enter the New Year with further improved financial management and controls.

-Rev. Dn. John Zarras, Transition Officer