OCA: Metropolitan Council Minutes of 6/12-13/07
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
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
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.]
5. FINANCIAL REPORT AND OCA AUDIT COMMITTEE REPORT. Fr. Paul
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
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.
6. 6. RE-ORGANIZATIONAL TASK FORCE/SEARCH COMMITTEE REPORT.
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.]
7. 7. OCA BEST PRACTICES/CONFORMITY TO NY STATE LAW REPORT.
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.
7. OCA BEST PRACTICES/CONFORMITY TO NY STATE LAW REPORT
[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
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
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
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.
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