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OCA 2007 Six-Month Financial Report

SYOSSET, NY [OCA Communications]—On Tuesday, December 18, 2007, OCA Treasurer, Priest Michael Tassos, published the Church’s 2007 six-month financial report on the OCA.org web site. On Monday, December 17, Fr. Michael sent a second memorandum to the Holy Synod and Metropolitan Council regarding the financial state of the Church.

The 2007 six-month financial report can be downloaded in PDF format here. The text of Fr. Michael’s memorandum is as follows.

“I would like to provide you with another update regarding various financial and accounting activities since my last report. As there are a number of items to cover I will break them down into separate issues:

Interim Financial Report as of June 30, 2007

“Attached is a copy of the Balance Sheet, Statement of Activities, Statement of Activities of Unrestricted Funds versus the budget and a Statement of Cash Flows as of June 30, 2007. These reports were compiled by me based upon information that was input into the Blackbaud software program. This information was also reviewed by an independent CPA firm, Satty, Levine & Ciacco, CPAs, P.C. however their review consisted only of an examination of the Unrestricted Funds. These reports were prepared on the accrual basis of accounting.

“I would like to report however that not all of the realized and unrealized gains and losses on the investment accounts were adjusted as of June 30, 2007. We are also endeavoring to go back through each fund and identify their intended purposes.

“Due to the fact that we started this examination so late in the year, it is simply not practical to try and provide a report for September 30, 2007. We have hired a temporary staff accountant who is continuing to help us get up to speed with the accounting software and put our books and records in order. Beginning in the first quarter of 2008, we will release the complete 2007 financial report.

Charitable Appeals

“We have examined the charitable appeals with balances that remained as of December 31, 2006 as well as the amounts that have been received throughout 2007. A number of the appeals such as the Christmas Stocking, Seminary Appeals, and Missions have been expended. We do, however, have several that we are still working on, such as some amounts collected for specific orphanages and other programs. We will release these funds as soon as we have properly identified the recipient and have a proper bank account or address to send the funds. In some cases this information is not readily available, particularly with some of the orphanages in Russia

“The largest amount outstanding is the Charitable Appeal. There is approximately $80,000 that needs to be expended. The chair of the Charity Committee is the Very Reverend John Reeves. Fr. Reeves and I have spoken and he informed me that the committee has proposed establishing specific criteria for determining who is to receive Charity funds. The basic plan would be to portion out the funds that have been raised for Charity into such categories as immediate needs, ecumenical charities, clergy and spouse needs, and grant requests. The idea of actually establishing criteria makes perfect sense rather than simply expending the funds piecemeal. The Charity Committee is going to meet in the early part of 2008 and will develop the plan for distribution at that time.

Mission Appeals

“Historically the mission grants for the upcoming year have been based upon the amounts collected in the prior year. For the year 2007 the Mission Appeals have taken a very dramatic decline. We have only raised a net of approximately $35,000. Given that each grant is $15,000 per year we could only realistically offer two grants for the upcoming year. It is indeed very sad that we can only offer such a limited number this coming year since there are quite a number of missions that have made requests. I hope and pray that we will find additional donors who would be willing to help us increase the number of grants for the year 2008. One additional point that I would like to make about the Mission Appeal funds and for that matter all appeals is that the money collected is separate and distinct. We are keeping a written record of each deposit and we are not commingling funds or “borrowing from Peter to pay Paul.”

Audit Committee

“This past week members of the Metropolitan Council audit committee met here at the Chancery and examined the books and records of both the Central Administration as well as the Pension Plan (which, as you know, is completely separate). Along with looking at the books and records, I discussed with them the fact that an audit firm needs to be picked for the upcoming year. We agreed that in the interest of obtaining an independent Certified Public Accounting firm, the audit committee will meet in the next couple of weeks to pick a firm. Members of the Audit Committee will meet personally with representatives of various accounting firms and make a decision on which firm to go with.

Fellowship of Orthodox Stewards (FOS)

“FOS has been a vital part of the life the Orthodox Church in America now for many years and it is important to acknowledge this importance and to keep it alive. Due to the financial difficulties in the Church over the past couple of years, the contributions from FOS members reached an all-time low. Beginning with the new year, it is my intention to start visiting as many parishes and deaneries as possible and explain first hand what we are doing to correct the internal control deficiencies that existed in the past and to hopefully try to reestablish some level of trust.

Internal Controls

“It is no secret that the internal controls necessary for the Orthodox Church in America were seriously lacking however we are continuing to address these deficiencies. In the past month and a half we have taken some very concrete steps forward:

  • Two signature system . All invoices are now reviewed by both the Chancellor and the Treasurer and both signatures are required on all disbursements. Prior to this only the Treasurer reviewed invoices for approval.
  • Temporarily Restricted Checking account. We recently opened a checking account specifically for temporarily restricted funds such as all Appeals. Prior to this all funds were deposited into an Unrestricted Checking account and someone would periodically move the temporarily restricted funds out of the Unrestricted Checking account and move them to a money market fund. This simple revision in procedures ensures that Temporarily Restricted Funds are never commingled with Unrestricted Funds.
  • Vendor files for anyone or any organization paid during the year . We recently set up vendor files for all vendors. Prior to this all invoices and payment information was batched in a single folder which made tracing down how much had been paid to a particular vendor throughout the year extremely difficult.
  • Bank Reconciliations. We recently transferred the bank reconciliation process to the Treasurer. Prior to this the person responsible for accounts payable also handled the bank reconciliation function.

“There is still more work to be done in this area. I would like to see a complete set of policies and procedures drafted as well a complete employee handbook.

“Once again, I ask for your patience and support. There are many challenges but little by little we continue, with God’s help, we are making progress.”