OCA Metropolitan Council members issue statement on finances, ongoing investigation

SYOSSET, NY [OCA Communications] — Members of the Metropolitan Council of The Orthodox Church in America, meeting under the chairmanship of His Beatitude, Metropolitan Herman, at the Chancery on June 13-14, 2006, issued the following statement concerning the status of audits and the ongoing investigation into the Church’s finances.

“The allegations of financial mismanagement leveled against the Church administration over the past year have provided a serious ‘wake-up’ call for the members of the Metropolitan Council of the Orthodox Church in America. Thus, we fully support the actions of His Beatitude, Metropolitan Herman, and the Holy Synod of Bishops in obtaining professional expertise to 1) determine the nature of our financial activities from a legal perspective, and 2) obtain clear and independent audits of our financial records, past and present.

“The Year 2004 Audit and the Year 2001 to 2005 Annual and Special Appeals Audit will be delivered on or before August 30, 2006.

“No date has been set for the completion of the investigation, since it is ongoing at this time. With a significant amount of work yet to be done, the completion date for the investigation cannot be determined at this time.

“While awaiting the full and final report from the auditor, members of the Metropolitan Council received an interim report, through which some clear trends were detected and on which we wish to comment at this time:

“1. The operating budget of The Orthodox Church in America has been in a deficit status for several years.

“2. As a result, money has been borrowed from earmarked funds to cover operating expenses.

“3. The lack of proper checks and balances on a financial administrative level has created an atmosphere inconsistent with best practices for a non-profit corporation.

“4. The lack of an independent audit since 1999 has prevented real scrutiny and oversight of our finances and financial practices for many years. (The reports completed since 1999 are not audits, but only compilations.)

“We are determined to take the steps that are necessary to restore good order, proper financial management, and trust. They are as follows:

“1. We are taking the necessary and difficult steps to have a balanced budget.

“2. We are implementing the standard protocol of ‘Best Practices’ for financial management for non-profits, which is posted on the OCA web site.

“3. We have approved a loan of $1.7 million to pay our creditors and to restore any and all monies borrowed from earmarked funds. This loan is being secured by the properties on Martin Drive and our headquarters in Syosset, and will be serviced out of operating funds.

“4. We have requested that His Beatitude, Metropolitan Herman create a special financial oversight committee to work with the treasurer and administration to assess and carefully manage all current funds, and to make the necessary interim decisions to assure a balanced budget for 2006.

“5. We pledge to take appropriate action relative to the findings and recommendations of the auditors.

“It is our commitment to the do our best to rectify the mistakes of the past, to be fiscally responsible in the present, and to create an atmosphere of trust that will ensure confidence among the faithful of the Church in the future.

“We also ask the following from you, the faithful of the Church:

“1. That you remain patient.

“2. That you pray for us and for all concerned in these matters.

“3. That you continue to support the Church.

“Most of us went to the Metropolitan Council meeting seeking answers to the financial and ethical questions that are facing our Church. It was also our desire to take responsibility for the duties entrusted to us by our respective dioceses and the Church at large.

“We also believe that you, the faithful, want and deserve the same answers, and that you want us to do all that is necessary to make things right.

“It is our commitment to you to do just that, and to communicate clearly with you as to how this is happening. We acknowledge your genuine love for the well being of the Church, and we feel assured of your prayers and support.”