OCA Treasurer issues 2008 Six-Month Financial Report
The financial report of OCA Treasurer, Priest Michael Tassos, presented at the meeting of the Metropolitan Council on September 4, 2008, is now posted on the OCA.org web site.
The financial data may be read in PDF format here. Fr. Michael’s introduction to the report is as follows.
Orthodox Church in America
Treasurer’s Report
For the period January 1, 2008 through June 30, 2008
Your Eminences, Your Graces, Reverend Fathers, and members of the Metropolitan Council:
I would like to provide you with an update on various financial matters through June 30, 2008. Attached are the following reports for your review:
- Detailed Balance sheet - 12/31/07 and 6/30/08
- Statement of Activities through 6/30/08
- Statement of Cash Flows as of 6/30/08
- Statement of Unrestricted Net assets - Actual vs. Budget through 6/30/08
- Schedule of all Temporarily Restricted Net Assets as of 6/30/08
- Reconciliation of Weiser, LLP adjustments to the balance sheet as of 12/31/07
- Schedule of the Central Administration - Actual vs. Budget through 6/30/08.
Some of these reports were revised or expanded upon based on questions and suggestions from several members of the Metropolitan Council at our meeting just a few weeks ago. I do not believe that there were any material changes from what I reported to you recently. Since some of the members of the Holy Synod were not present for my report I would like to highlight just a few items from my earlier presentation.
I am pleased to say that we continued to operate with a surplus of $77,925 for the six month period ending June 30, 2008, despite overages in Legal, Accounting, and Outside Contractors. As of June 30th, our operating checking account had a balance of $94,646.39, there was $177,984 in checking set aside for the 15th All American Council, the accounts payable and accrued expenses were $79,265, compared with a balance of $276,529 a year ago, and in the first week of July, 2008 we were able to distribute $25,000 NYDIS for the victims of 9/11. Following are specific highlights of what has transpired since our last meeting.
Weiser, LLP audit of the year 2007
The accounting firm of Weiser, LLP began field work for the 2007 audit approximately one month ago and they are at the tail end of their initial testing. In examining the books and records there were two significant adjustments that they have proposed and that I concur with:
- adjustment of the gain on the sale of the Martin Drive property,
- reclass of $20,000 paid to Proskauer Rose in March 2008 back to 2007.
The first adjustment will effectively reduce the gain on the sale of the property to approximately $158,000. This adjustment is due to the fact that we did not have complete fixed asset records when the books were closed for 2007. We were able to obtain some additional information from the Lambrides accounting firm which resulted in additional write-offs of fixed assets related to the property.
The second adjustment is related to one of the final payments to Proskauer Rose in March 2008. While the payment was made in 2008, it was actually for services rendered in 2007 and thus must be reclassed back to 2007.
Despite these adjustments, the Orthodox Church in America still maintained a surplus in 2007.
Two additional items remain to be resolved: (1) the presentation of the pension plan in the financial report of the Orthodox Church in America. Despite statements by a number of individuals that the pension plan is separate from the OCA, the pension plan is a part of the OCA and no other church. I am sympathetic to not consolidating the figures within the OCA’s financial report and we are currently working to simply add additional language in the footnotes of the report to better explain the relationship of the pension plan to the OCA. (2) the complete accounting for all of the past permanently restricted net assets.
The second issue is simply not something we can resolve prior to the All American Council. The task of tracking down each and every fund with a name on it, researching its history, and making sure that we have accounted for it properly is something we simply can not accomplish at this time due to the condition of the books and records. It is something that we are working towards but it will not be completed for the year 2007 report.
Department Expenses
I am pleased to report that almost all of the departments were under budget through June 30th. The work of the Preconciliar Commission has been moving well and it appears that they will be within their budget of $50,000 even with the additional town hall meetings.
Staff changes at the chancery
After a rather considerable search, it is a pleasure to announce that we were fortunate to retain the services of the Very Reverend Dennis Swencki. Fr. Dennis comes with a considerable amount of financial experience with Ceasars Resorts and a large law firm. Due to the fact that I am still in California and the work of the chancery must continue, Fr. Dennis has agreed to accept the position of Comptroller and will be assisting me Monday through Thursday. Additionally, we were able to hire Ms. Jessica Linke. Ms. Linke is studying accounting and finance and has been hired to assist the chancery staff with a variety of duties, including assisting with accounting, maintaining the Orthodox Church magazine database, receptionist, and choir director for the chapel.
15th All American Council
While not all of the parishes have paid for the council, we are rapidly moving forward to covering our budget of $198,000. Through June 30th we had received approx. $178,000. Through August this figure has risen to approx. $186,656 or 94% of the budgeted amount. The members of the Preconciliar Commission have been working to get more hard numbers for the council and it appears that our initial budget of $198,000 is still reasonable.
9/11 and Bibles for Russia
As reported at the last meeting of the Metropolitan Council, the council voted to send an additional $25,000 per year until the issues surrounding the missing 9/11 funds were resolved. I am pleased to say that a check went to NYDIS in the amount of $25,000 in the first week of July. As to the $65,000 allotted for the Bibles for Russia, we have been in contact with Archimandrite Zacchaeus Wood in Moscow and it looks like we will be able to transfer the funds in the coming week.
2009 budget
It is no secret that there are a number of very strong opinions regarding the budget for 2009 and beyond. Some individuals have advocated a $50.00 per head assessment; others have advocated that the amounts remain frozen at their current levels. I have been working with the chancery staff as well as Fr. Matthew Tate, chair of the Metropolitan Council Finance Committee to offer up several proposals.
I would, however, like to make just a couple of general remarks. No matter how the budget plays out, it is incumbent upon everyone who is a stakeholder in this to understand that there are some amounts which I would characterize as “non-negotiable.” These include repayment of debt obligations to OCA creditors, obligations to the city of Oyster Bay, payroll and health insurance obligations, prior commitments for events such as the All American Council and other obligations which we have already previously committed to such payments for legal and accounting fees already provided.
The second large issue that must be considered is what will be the long-lasting result of cuts to the current infrastructure? Another way to phrase this is, what does the OCA actually need on a Church-wide level? Does it serve us to have a structure dedicated to serving the common needs and interests of the Church as a whole, or does it serve us better to let each diocese take care of their own needs and interests? Clearly, if the majority feels that a structure that serves the Church at large is not worth very much, then there is no need to support such a structure. However, as the expression goes “you can’t have your cake and eat it too.” It is simply unrealistic to think that if budget cuts are severe that anyone worth anything will want to continue or that the OCA will ever be able to effectively recruit individuals to take on leadership roles. While much still needs to improve, it is clear that we are moving forward; however a lack of funding could lead to other unanticipated problems or issues.
Chancery Estate
Fr. Eric Tosi and Dn. John Zarras have been instrumental in examining the chancery estate as mandated by the last Metropolitan Council meeting. I simply wish to echo their sentiments that for the foreseeable future it would seem to be the best use of money if the chancery were to remain in its present location and that the Metropolitan Council and the Holy Synod consider selling some of the acreage in the rear of the estate and use the proceeds from the sale to retire the existing debt to Honesdale National Bank.
Additional Goals and Objectives for 2008
As I mentioned in my report back in March, things are still fragile however they are improving. There are still a number of moving parts that we must continue to work on:
- Examining each and every endowment back to its original sources,
- Continue to make payments on the 9/11 obligation,
- Move forward with a transfer of the securities portfolio where it can be managed more effectively,
- Seriously examine the overall OCA operating budget in anticipation of the 15th All American Council,
- Move forward with an effective strategic plan for the Fellowship of Orthodox Stewards
- Move forward with training on Blackbaud and begin to prepare to properly utilize the software beginning in January, 2009.
Once again, I wish to thank all of you for your patience and understanding, especially my brother clergy at the chancery who have worked very hard to help make this work.
Respectfully submitted in Christ,
Priest Michael Tassos