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OCA: Metropolitan Council Minutes of 6/12-13/07

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  • Nina Tkachuk Dimas
    http://www.oca.org/NewsPrintable.asp?ID=1284 Minutes of June 12-13 Metropolitan Council meeting posted Article posted: 7/12/2007 11:48 AM Orthodox Church in
    Message 1 of 1 , Jul 12, 2007
      Minutes of June 12-13 Metropolitan Council meeting posted

      Article posted: 7/12/2007 11:48 AM
      Orthodox Church in America Metropolitan Council Meeting
      June 12-13, 2007

      Following an agenda distributed by the OCA secretary:
      1. OPENING PRAYER. At 10:00 a.m., His Beatitude, Metropolitan
      Herman, led a Service of Prayer in the Chancery's St. Sergius of
      Radonezh Chapel, Oyster Bay Cove, NY.

      2. ROLL CALL.
      Present: Chairman: His Beatitude, Metropolitan Herman.
      Officers of the Church: The Very Rev. Paul Kucynda, secretary and
      acting treasurer.

      Representatives elected by the All-American Council: The Very Rev.
      Theodore Boback, the Very Rev. Gregory Safchuk, Eleana Silk, Dr.
      Faith Skordinski, Dr. Alice Woog.

      Diocesan Representatives: Albanian Archdiocese, L. William Peters;
      Archdiocese of Canada, the Very Rev. John Tkachuk, Richard
      Schneider; Diocese of Eastern Pennsylvania, the Very Rev. John
      Onofrey, Peter Bohlender; Diocese of the Midwest, the Very Rev.
      Vladimir Berzonsky, Dr. Richard West; Diocese of New England, the
      Very Rev. Mark Sherman, Deacon John Zarras; Diocese of the South,
      the Very Rev. Philip Reese, George Popovich; Diocese of Washington
      and New York, the Very Rev. George Hasenecz; Diocese of the West,
      the Very Rev. Matthew Tate, Mary Caetta; Diocese of Western
      Pennsylvania, the Very Rev. John Reeves, Gregory Nescott.
      Absent: Member Elected by the All-American Council, the Very Rev.
      Constantine White; Diocese of Alaska, Archmandrite Isadore
      (Brittain), Minadora Jacobs; Albanian Archdiocese, the Very Rev.
      Sergei Bouteneff; Diocese of Washington and New York, Robert

      Following the roll call, Dr. Woog questioned Mr. Nescott's presence,
      citing her understanding that His Beatitude, Metropolitan Herman,
      had removed Mr. Nescott from the Metropolitan Council. His Beatitude
      replied that he had not removed Mr. Nescott, rather, Mr. Nescott's
      bishop had done so, and his bishop had also restored him to the

      Guests: Present for indicated portions of the meeting: the Very Rev.
      Alexander Garklavs, chancellor appointee (entire meeting); Mr.
      Robert Taylor, CPA, and Ms. Valerie Jones, CPA (Financial Report);
      the Rev. Jonathan Ivanoff (Computer Upgrade Project), the Very Rev.
      Paul Suda, (OCA Audit Committee), the Very Rev. Eugene Vansuch
      (FOS/Development), Al Wetmore (Organizational Task Force), Carol
      Wetmore (recorder).

      3. MINUTES of March 2007 Metropolitan Council Meeting. Mr.
      Nescott pointed out a missing phrase from the Special Committee
      section; Recorder will delete confusing and apparently erroneous
      notations of early member departures. Fr. Onofrey moved to accept
      the minutes as amended; Mr. Bohlender seconded; motion passed

      4. ADDRESS OF METROPOLITAN HERMAN. His Beatitude's delivered a
      message, which was later provided in written form to all Council
      members and posted on the OCA website. [The complete text of the is
      may be found at http://www.oca.org/news.asp?ID=1258&SID=19 on the
      OCA web site.]

      Suda, chairman of the OCA audit committee reported orally and in
      writing on review of January?March 2007 transactions. In summary, he
      noted: the Chancery presently has no credit card, so no credit card
      transactions were reviewed; allocations to expense categories were
      appropriate for expense reimbursements; transportation expenses were
      properly documented; and all but "a few" transactions had proper
      receipt documentation. He presented six recommendations, one of
      which, he reported, was already accomplished:

      i. that a response be prepared to the audit report completed by
      Lambrides, Lamos, and Moulthrop, LLP, in September 2006;

      ii. that a quarterly budget review be completed by a CPA
      to "confirm the new administration is following best practices"

      iii. that the OCA audit committee chair serve on the MC audit

      iv. that specific documentation practices be put in place for
      travel expenses;

      v. that no expenses be reimbursed without receipt unless
      approved "by the appropriate party with a reason for the exception";

      vi. that the new financial software by used to identify ways to
      enhance audit capabilities.

      Robert Taylor, CPA, from Lambrides, Lamos, Moulthrop, LLP, presented
      a draft audit of OCA funds for the year ending December 31, 2006. He
      reviewed the salient features of the draft report and, while noting
      two significant outstanding issues, said the financial statements
      present fairly, in all material respects, the financial position of
      the Church as of December 31, 2006, and the changes in its net
      assets and its cash flows for the year, in conformity with
      accounting principles generally accepted in the United States of
      America. The two open issues are the ownership of certain Alaskan
      lands and the inadequacy of accounting records regarding the use of
      temporarily restricted net assets for the years prior to 2006. He
      answered questions from the Council, as did his associate, Valerie
      Jones, concerning details of the report. He recommended that the
      Church hire a fully qualified full-time accountant. In response to
      questions regarding restricted funds, he recommended ?due diligence'
      to determine utilization of funds in the absence of adequate
      documentation. He cited his intention to conference with the audit
      committee(s) and other principals regularly in the future, to
      interact and make recommendations.

      The Council adjourned for lunch from 12:55 - 1:55 p.m.

      Peter Bohlender reported for the Task Force that Fr. Garklavs will
      assume the position of chancellor on July 1, and the Rev. Andrew
      Jarmus will report on August 1 as director of ministries and
      communications. Both have accepted salaries within the ranges
      approved in November 2006 and benefits consistent with those
      presently in effect. Regarding the treasurer position, Mr. Bohlender
      reported that the previously approved candidate, Kevin Kovalczyk,
      declined the position. A second candidate underwent interview but
      ultimately declined, based on inability to relocate. The Task Force
      recommends seeking to recruit a full-time accountant and a part-time
      treasurer (who must be an OCA member in good standing). Reporting
      for the Secretary Selection Team, Dn. John Zarras presented Paul
      Bodnar as the recommended candidate. He outlined Mr. Bodnar's
      background and qualifications as well as the objective process used
      to review all applicants. Mr. Bohlender outlined other personnel
      changes within the Chancery, including two separations. He reported
      that a severance policy was in effect whereby employees received one
      week's pay for each year's service, as well as health benefits
      during the severance pay period. He sketched future Task Force
      plans, including policy development and continued support to the
      transition officer. He asked the Council to recommend Mr. Bodnar to
      the Holy Synod and to endorse recruiting a part-time treasurer and a
      full-time accountant. In discussion, Council members suggested it
      would be more appropriate to hire a full-time treasurer than a part-
      time treasurer. Fr. Reeves moved to ask the Task Force to continue
      to seek a full-time treasurer with emphasis on accounting skills.
      Fr. Reese seconded. Motion passed on a vote of 11 to 10. Dn. Zarras
      moved to recommend Paul Bodnar to the Holy Synod; Fr. Sherman
      seconded; the motion passed unanimously. [A summary of the Task
      Force report is posted at http://www.oca.org/news.asp?ID=1266&SID=19
      on the OCA web site.]

      Peter Bohlender moved, and Fr. Reese seconded, that the subject be
      taken off the table; the motion passed unanimously. Fr. Reeves made
      a motion, seconded by Mr. Nescott, to divide the question and take
      each section separately. The motion passed with 11 for and 6
      against. The Council as a body then reviewed each section of the
      Best Practices document in detail, with Mary Caetta recording
      changes to be incorporated overnight and presented to the Council on
      the morning of June 13.

      Section I Establish Clear and Decisive Governance: Motion to accept
      as amended: Fr. Tkachuk, second, Fr. Safchuk, approved unanimously.

      Section II Adopt Ethics and Conflict of Interest Policies: Motion to
      accept as amended: Dn. Zarras, second, Fr. Onofrey, approved on a
      vote of 20 to 1.

      Section III Design and Implement Appropriate Financial Controls:
      Motion to accept as amended: Mr. Bohlender, second, Dn. Zarras,
      approved on a vote of 20 to 1.

      Section IV Conduct Regular Independent Financial Audits: Motion to
      accept as amended: Dr. West, second, Dn. Zarras, approved

      Section V Ensure Transparency of Financial Data and Performance:
      Motion to accept as amended: Dr. Woog, second, Fr. Safchuk, approved

      Section VI Maintain Knowledge on Emerging Non-Profit Issues: Motion
      to accept as amended: Mr. Bohlender, second, Dn. Zarras.
      In discussion Council members debated the concept of a "principles"
      versus a "procedures" document. They concluded the Best Practices
      policy is a principles document, which the Church needs. It also
      needs clear understanding of those principles and enforcement as
      well as punishment for non-compliance. The motion passed unanimously.
      Ethics Policy: Motion to accept as amended (chiefly to establish an
      ethics committee) by Fr. Reeves, seconded by Mr. Schneider.
      Conflict of Interest Policy: Motion to accept as amended: Dn.
      Zarras, second, Mr. Popovich, approved unanimously.

      Whistleblower Policy: Comments made that each section should be able
      to stand alone. Changes proposed to effect that end. Motion to table
      until tomorrow morning by Mr. Nescott, second by Fr. Tate, passed

      Donor Bill of Rights: Motion to accept by Fr. Sherman, second, Dn.
      Zarras, approved unanimously.

      Document Retention Policy: Motion to accept as amended: Fr. Reese,
      second, Mr. Nescott, approved unanimously.

      The Council adjourned for the day at 6:20pm.

      JUNE 13, 2007

      The Metropolitan Council session opened with prayer at 9:00 a.m.
      ROLL CALL. Unchanged from June 12, except for addition of member
      elected by the All-American Council, the Very Rev. Constantine White.

      [continued]. Ms. Caetta presented and reviewed the edited version of
      the document resulting from the Council's efforts on June 12. She
      suggested a review one year hence. She emphasized that this is a
      living document and will need regular review and revision. In
      discussion the Council agreed to rename the MC audit committee the
      internal audit committee throughout the document. Fr. Reeves moved
      to approve the Whistleblower Policy as amended; Dr. Woog seconded,
      and the motion passed unanimously. Further changes in terminology
      and format were discussed, agreed upon, and recorded by Ms. Caetta.
      Fr. Sherman moved to accept the whole document; Mr. Popovich
      seconded, and the motion passed unanimously.

      8. INVESTIGATION COMMITTEE REPORT. Fr. Berzonsky orally
      reported actions of the committee. He reported on the committee's
      process and said they perceived insufficient cooperation from
      Proskauer Rose in providing records. He said plans for further
      investigation were cut short by the suspension of their activities.
      Discussion followed regarding bills from and payments to Proskauer
      Rose as well as processes to assure all bills are fully
      substantiated before payment. Fr. Kucynda stated that Attorney
      Alexandra Makosky is presently scrutinizing all current open bills
      from Proskauer Rose prior to payment.

      Fr. Sherman presented a resolution: "As also previously authorized
      and directed by the Metropolitan Council and the Holy Synod, the
      Special Commission is directed to continue, without delay, its
      investigation of financial malfeasance affecting the Church, without
      any hindrance or limit, and to reports its findings and
      recommendations no less often than monthly to the Metropolitan
      Council and Holy Synod. Such reports shall include, once available,
      the identification of what has happened and recommendations as to
      any possible means of the recovery of Church assets lost or
      misappropriated. All parties having relevant information, including
      any legal counsel representing the Church, are authorized and
      directed to cooperate fully with the Special Commission in such
      investigation." Mr. Popovich seconded. Mr. Nescott asked if all
      Special Commission recommendations went to the Holy Synod and were
      approved. His Beatitude replied that he would need to check on the
      recommendation about releasing the report, but the other
      recommendations were accepted.

      His Beatitude said he does not object to the motion because the
      suspension of the Special Commission has been misinterpreted. We
      appointed the Special Commission to bring a close to the
      investigation into the Proskauer Rose findings. The commission's
      activities were stopped temporarily when they went into a whole new
      direction, because of numerous other concerns.

      The Council discussed the benefit of passing the motion and agreed
      the objective is to prevent recurrence of the malfeasance, not to
      engage in muckraking, which is contrary to canon law. On the other
      hand, a good outcome of the investigation would be to support Best
      Practices. Mr. Nescott made the point that the Special Commission
      should be operating now, pursuant to the charter passed by the
      Council in March. It is a conflict of interest for His Beatitude to
      suspend the Special Commission since he held the office of
      treasurer, as did Fr. Kucynda. Dn. Zarras made the point that the
      Church has no general counsel, no attorney specifically charged to
      represent the Church's interests. Ms. Caetta, as chair of the
      internal audit committee, expressed her interest in continuing the
      Special Commission in the interest of finding out "why things went
      wrong." She added that the Commission's report needs to be to the
      Metropolitan Council, not to the Metropolitan alone, in order for
      the results to be followed up by the internal audit committee.

      Dr. West presented a written message from the Diocese of the
      Midwest, where there is dissatisfaction with the Honesdale loan, the
      removal of Mr. Nescott from the Council, and the discontinuation of
      the Special Commission. There is a perception of lack of
      communication and lack of transparency. He characterized his written
      message as a "compromise." Discussion followed about assumptions
      made in the absence of facts, angry priests, and refusal to listen
      to messages from Council members.

      Fr. Sherman amended his motion to add "including possible IRS
      implications," after "what has happened." Mr. Popovich, who had
      seconded the motion, agreed with the amendment. The motion passed by
      a vote of 20 to 1.

      The Council adjourned for lunch from 12:30 - 1:30 p.m.

      9. LEGAL MATTERS. Pursuant to earlier discussions, Fr. Kucynda
      presented a report on Proskauer Rose billing, which has totaled
      $350,679.18, the largest portion of which resulted from their
      investigation into financial malfeasance. Outstanding bills from
      Proskauer Rose are subject to some negotiation. He emphasized that
      all payments made to Proskauer Rose to date, as well as the
      repayment of a $50,000 no-interest loan accepted from a member of
      the Church for initial funding of the investigation, have been made
      exclusively from 2006 general funds. Dr. Woog moved that, through
      the Metropolitan's office, contacts be made to five attorneys
      qualified and willing to work with the OCA as general counsel, for
      the purpose of obtaining their bids. Dr. Skordinski seconded and the
      motion passed unanimously.

      Dn. Zarras reported his investigation into the loss of one Special
      Committee report. Since his investigation, all 44 copies of the
      report are under lock and key except those in the hands of Special
      Committee members. The Council discussed and affirmed the need to
      acquire fireproof file cabinets or to obtain the services of an off-
      site archival company. The secretary of the Church holds this
      responsibility, as well as responsibility for putting in place a
      security plan.

      Fr. Kucynda presented an advisory paper concerning IRS implications
      of excess benefits. The Council noted various aspects of the report
      and confirmed that the Church has taken numerous good faith steps
      with regard to this matter and must continue to do so.

      Fr. Kucynda reported the sale of Martin Drive property is complete.
      The sale price of $600,000. netted the Church $540,817.10. The net
      profits are being transmitted directly to Honesdale Bank to reduce
      the $1.7 million loan.

      10. FIFTEENTH ALL-AMERICAN COUNCIL. The Council reviewed a
      memorandum from the Very Rev. Myron Manzuk, council manager. He has
      made arrangements with a convention planner and is starting meetings
      with him. The Council discussed the pros and cons of St. Tikhon's
      Monastery as a Council site.

      11. INTERNAL AUDIT COMMITTEE REPORT. Ms. Caetta presented a
      written report with five recommendations. She will rethink her
      committee role in view of the Best Practices document adopted at
      this session.

      12. ETHICS COMMITTEE. The Council elected three ethics committee
      members. Dr. Skordinski nominated Mr. Peters and Fr. Sherman; Fr.
      Tate nominated Mr. Nescott. Fr. Reeves moved to close nominations;
      Fr. Boback seconded; motion passed unanimously. Committee members
      are directed to select a chair from among their members.

      13. COMPUTER UPGRADE REPORT. Fr. Ivanoff provided a written and
      oral report.
      Accounting System and Information Systems Upgrade. A major milestone
      was the production of an income/expense financial report for the
      first quarter of 2007 via the new financial software system. The
      Chancery will switch over to an upgraded server this week. Remaining
      tasks include additional training for affected personnel, planned
      for the next two months. Target date for full implementation of the
      Blackbaud software is the third quarter, affected in part by
      difficulties in recruiting a treasurer/accountant.

      14. FOS/DEVELOPMENT REPORT. Fr. Vansuch, director of development
      and stewardship, summarized his written report and discussed recent
      activities. Income is on target with 2007 budget projections:
      $25,680 in donations to date, with an additional $21,000 coming to
      FOS since April.

      15. FINANCE COMMITTEE REPORT. Fr. Tate reported Church
      expenditures vs. budget. Generally, assessments are on target with
      budgeted income. Expenditures for legal expenses warrant a budget
      increase to $190,000.
      Additional Metropolitan Council expenses this year also indicate
      need for a $25,000 increase in that line item. Making those changes,
      and all else being equal, will create a $100,000 deficit at the end
      of the year. Fr. Reeves moved to make the cited budget changes and
      also to reimburse Dr. Skordinski for her reasonable travel expenses
      incident to the ongoing Church Court activities; Mr. Popovich
      seconded; the motion passed unanimously.

      16. CHARITY COMMITTEE REPORT. Fr. Reeves summarized his written
      report. On a motion by Fr. Tate, seconded by Mr. Popovich, the
      Council unanimously approved distributing $90,000 in 9/11 Funds to
      the New York Disaster Interfaith Service (NYDIS). Mr. Bohlender
      moved to approve $67,000 to be directed to Bibles for Russia, with
      the understanding that the Finance Committee will work out the
      mechanics. Fr. Sherman seconded, and the motion passed unanimously.
      17. INVESTMENT COMMITTEE REPORT. Mr. Popovich presented a
      written report for committee chairman Fr. Reese, showing funding in
      OCA investment accounts. He said that the fourth and final team
      member, Charles Webb, has been added and that the committee will now
      begin to meet and work as a team.

      18. DATE FOR NEXT MEETING. Fr. Kucynda announced the meeting
      dates: October 16-17, 2007.

      Adjournment: Fr. Reeves moved to adjourn; Fr. Tate seconded. The
      motion carried. The meeting closed with the singing of "It Is Truly
      Meet" at 3.35pm.

      Respectfully Submitted,
      Carol Wetmore

      --- End forwarded message ---

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