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OCANews: Canadian MC Report Offers Robust Defense of Syosset

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  • Nina Tkachuk Dimas
    http://www.ocanews.org/news/SchneidersMCReport8.2.07.html 8.2.07 Canadian MC Report Offers Robust Defense of Syosset Dr. Richard Schneider, lay delegate from
    Message 1 of 1 , Aug 2, 2007
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      http://www.ocanews.org/news/SchneidersMCReport8.2.07.html

      8.2.07

      Canadian MC Report Offers Robust Defense of Syosset

      Dr. Richard Schneider, lay delegate from the Archdiocese of Canada to
      the Metropolitan Council, submitted the following report to the
      Canadian Assembly, which met in Ottawa, Canada, in early July.
      Schneider, an Associate Professor of History at York University
      (Toronto), and a past President of the Canadian Council of Churches,
      offers a very different perspective on the Council and the ongoing
      scandal from that given by Fr. Vladimir Berzonsky in his recent report to the
      Archdiocese of the Midwest. (Read that report here.) Schneider's
      report follows:

      "Archdiocese of Canada,
      Ottawa Assembly, July 2, 2007

      From: Richard Schneider

      Metropolitan Council Report, 2004-7
      Rationale of this report:

      Normally, a report from the Metropolitan Council is a simple list of
      accomplishments and activities. However, as all know, during the last
      three years widespread turmoil and emotional opinion -- partly fueled
      by the increasingly hostile rhetoric of a website intending to be
      critical -- about management by the OCA and the Metropolitan Council
      have spread. Therefore, the present report needs to be both more
      detailed and more explanatory than usual, to provide a clear and open
      record of the present situation of the OCA, and an informed and
      balanced view of the situation.
      Overall theme of this report:

      For a number of years � especially from around 1998 �2003 � financial
      and administrative scrupulosity in the O.C.A. were both carelessly
      and selfishly handled, and responsible oversight (by all parties) was
      either lazy or over-trusting. However, during the last triennium,
      through very hard work on the part of the Metropolitan Council and
      good co-operation from the Syosset offices, the OCA central
      governance has undergone a serious project of restoration of "due-
      diligence" control, of administrative restructuring and re-
      organization, of proper, open and appropriate financial management,
      and of a "high-ethical" culture through the adoption of a Best
      Practices Policy designed for not-for-profit organizations. It can be
      said (with some relief and with thanks to God) that, as an outcome of
      all this work, the present on-going running of the O.C.A. has been
      placed on a sound and reliable basis and that the "communal-
      responsibility" mentality of our uniquely conciliar church has been
      restored (at least among members of the Metropolitan Council, Holy
      Synod, and Syosset officers). The approach and style used at present
      by these three bodies for running the day-to-day central management
      can be trusted; if it is maintained and furthered in its present
      spirit, the future looks promising.

      The question of what went wrong in the past is still not entirely
      clear, and not all is known; the process of untangling the mess is
      laborious and slow, and will require a great deal of patience from
      everyone. It is, however, very important that we keep firmly in mind
      that the sole useful purpose of unveiling the past is to learn from
      our mistakes, to know how things went wrong so that it cannot happen
      again, and to make restitution of any harms that may have been done,
      so that the O.C.A. can play its role of responsible steward and
      guardian with full clarity. Our efforts in regard to the past must
      never be carried on in a "prosecutorial" spirit of seeking revenge,
      or even worse, of just "digging up the dirt." To do so would be un-
      Christian, un-Scriptural, and absolutely counter-productive.

      Background

      For nearly a decade before the past triennium, but most intensely in
      the years leading up to 2004, an atmosphere of loose management �
      both administrative and fiscal -- and lack of ethics (again both
      administrative and fiscal) prevailed in Syosset. This was made
      possible by several causes: an undeclared administrative structure
      which caused all business to run through the office of the
      Chancellor, terrible accountancy practices (made worse by an
      antiquated and idiosyncratic financial software) which made
      scrupulous record-keeping and tracking of funds impossible � one of
      the consequences was lack of clean external audits during these
      years � and little detailed oversight by the Metropolitan Council
      (which for several of those years was not called to meet, and when it
      did meet acted in an over-trusting acquiescent spirit). To add to the
      difficulty, those in the Syosset offices who tried to bring this
      chaos to attention and scrutiny were silenced; an over-cautious and
      timid ethic of protection of the good name of the church and
      avoidance of scandal motivated much that was said and done, which �
      as always happens in matters of truth � made the latter scandal even
      worse when it did become public knowledge.

      During the past triennium, a strong and awakened Metropolitan Council
      has worked long and hard in cooperation with the central offices and
      officers to restore regularity, scrupulosity, and order to the
      working of the O.C.A. central governance. A lot of this establishment
      of order has in fact required "re-ordering," not only of structures
      and jobs, but also of policies and guidelines. The following report
      identifies in detail these accomplishments during the three years and
      their present outcome.

      Administrative re-organization

      After more than a year's hard work by an Organization Task Force,
      with the careful scrutiny and approval step-by-step of the
      Metropolitan Council, the flaws in the unregulated old administrative
      practice (in which the Chancellor's office had nearly sole control
      over decisions and actions) were finally explicitly clarified, and it
      has been replaced by a new explicit and accountable system of mutual
      group responsibility among the directors of four new offices:
      Chancellor, Treasurer, Secretary, and Director of Ministries and
      Communications. Once this structure was approved an open job search
      was made for each office � again, with oversight by both the
      Metropolitan Council and the Holy Synod � and the directorships are
      gradually being filled: the new Chancellor is Very Rev. Alexander
      Garklavs, and the new Director of Ministries is Fr. Andrew Jarmus
      (from our Canadian Archdiocese); applications for Secretary were
      slower in coming, but at the time of reporting a good candidate is
      far advanced in the approval process. Treasurer has unexpectedly been
      hard to fill, because an outstanding candidate who was approved
      couldn't move to Syosset for personal reasons; the position is still
      open and applications are welcome. (One important point that has
      emerged from the process is that while the Treasurer needs to have a
      good degree of C.F.O. grasp of the "big picture," he/she must also �
      and for the most part � be able to manage the day-to-day accounting
      like a CPA, because the office of comptroller has been declared
      redundant in the plan. By Statute, the Treasurer must be an Orthodox
      Christian).

      During all of this transition to the new system and search for
      candidates has been preceding, the Metropolitan Council appointed
      Deacon John Zarras as interim manager; he has done an outstanding
      job. The structure of permanent staffing at Syosset has been reworked
      for greater efficiency, with redundant (duplication of
      responsibility) jobs eliminated and other jobs outsourced, both
      changes resulting in considerable annual savings (about $65,000).
      Committee management of Metropolitan Council oversight

      To assist in the very hard work of re-asserting and maintaining its
      statutory responsibility of oversight of legal and financial
      management of the OCA � and to assure the directorial responsibility
      of "due diligence" to which all governing boards are bound by law �
      the Metropolitan Council has established a number of standing
      committees to ensure that all needed information is publicly known,
      that policy is being adhered to, and that management, budgeting, and
      every other aspect of operation, expenditure, and planning are under
      control. The new standing committees have been effectively at work
      for the past year: (a) finance committee oversees budgeting and
      validity of expenditures, and checks on accounting (b) investments
      committee keeps track of investment funds (c) charity committee
      oversees proper use of dedicated donations and also, in cooperation
      with finance, encourages ongoing expenditure on charity, (d)
      Metropolitan Council audit committee oversees the work of the OCA
      audit committee (elected at All-American Councils) and also works in
      liaison with the independent auditor to obtain quarterly reports and,
      eventually, clean audits (see below). Finally, at the June 2007
      meeting we added (e) ethics committee as a resource to ensure proper
      functioning of Best Practice (see next).

      The creation of these committees � staffed entirely by hard-working
      volunteers from among the Councilors � not only keeps the supervisory
      work of the Council functioning at an ongoing level of detail, but
      also guarantees that the Metropolitan Council is fully meeting the
      legal requirements expected of a Board of Governors (about which we
      have had considerable professional instruction during the past
      year): "due diligence" in oversight, loyalty to the best interests of
      the "corporation" rather than personal interests, obedience to
      charter (i.e., to the Statute of the OCA) and bylaws, and prompt and
      thorough correction when anything goes awry. (Note: the Holy Synod is
      equally accountable for these legal responsibilities of governors)
      "Best practice" principle as the universal guideline for governance

      One of the key elements in the establishment of a "new style" of
      governance in the OCA has been the writing, editing, and adoption of
      a set of "Best Practices" Guidelines. After legal review to be sure
      that these guidelines conform to all legal requirements of New York
      State not-for-profit corporations, followed by yet more word-by-word
      scrutiny for absolute clarity, these Guidelines have been adopted as
      the normative principles by which all governing bodies in the OCA �
      including Metropolitan Council, Syosset officers and staff, and the
      Holy Synod � will be ruled from now on. (The process took two years
      of very hard work, begun by an excellent drafting committee under the
      experienced guidance of Protodeacon Peter Danilchick, and continued
      by the Metropolitan Council).

      The full text is an 18-page document available on the OCA website; it
      bears careful reading. In summary, the topics covered apply to
      financial governance, controls on expenditure, accountability and
      audits, transparency and mutually shared responsibility, good
      practice with documentation, and protection of "whistleblowers."
      Included in the principles and practices which support these aims are
      an ethics policy, a document retention policy, a "donor bill of
      rights," and a conflict of interest policy.

      Audits

      In the all-important � for a non-profit organization -- area of
      auditing considerable regularization has been necessary; independent
      audits were not made from 1999-2005, and while our independent
      auditing firm (Lambrides, Lamos, Moulthrop, who have special
      experience in not-for-profit auditing) has been making Herculean
      efforts with the past, the paper records are in a real mess and the
      computer software has proven to be both antiquated and idiosyncratic,
      and incapable of delivering the kind of records an auditor needs (see
      below re: new hardware and software).

      However, progress in catching-up is proceeding, and the present is in
      very sound shape. We have a full draft audit for 2006 and for the
      first quarter of 2007. Note: these are not what auditors call "clean
      audits" because of two long-standing issues which must be resolved
      clearly before that is possible, viz., the ownership of the lands in
      Alaska, and the "carry-forward" of restricted donated funds which
      have not yet been distributed (in the latter case, the audit problem
      is created by the confusion of the old paperwork).

      We now have triple oversight to assure the accuracy of audits: the
      OCA AAC-elected audit committee, the Metropolitan Council's own audit
      committee, and the external auditors. On this basis, we expect in
      future to be able to obtain regular quarterly reports, monthly
      balance sheets, and an annual independent audit. As the external
      auditor put it in his most recent report: "Financial normalcy has
      returned to the church; good steps forward have been made, but there
      are many to go." It is the auditor's recommendation that the
      Treasurer must have excellent accountancy skills and see accounting
      as a major part of the job (see above).

      Finances

      Apart from the accounting difficulties just described, financial
      regularity in regard to both budgeting and income-expenditure
      coordination needed to be firmly established; this is now largely in
      place. For the present and future, we are operating with a soundly-
      based balanced budget under the supervision of the Finance Committee.
      For restoration of the past mess, a year ago the OCA secured a
      $1.7million "open" loan which was used to restore all internal
      accounts � departmental, restricted funds, etc. etc. � to exactly the
      levels corresponding to budgeted expenses and received donations, to
      pay all outstanding bills, and to provide monies for vitally
      necessary (but expensive) improvements such as the upgrade of the
      computer systems and financial software (see below).
      Since then, finances have been going well and the loan is being
      reduced. The most substantial reduction came from the sale of a
      redundant house, which netted $540,000.

      We are for a brief while in a period of extraordinary expenses --
      heavy legal costs associated with correcting the problems of the
      past, extra meeting and travel expenses because both the Metropolitan
      Council and Holy Synod are meeting much more frequently (4 times a
      year in the case of the Council) and the committees are incurring
      ongoing expenses in the conduct of their work; the re-organization
      process has had its costs (travel for interviewees, etc.), and the
      purchase of a new computer system and software has been very
      expensive (see below). But the general picture is very good and can
      be expected to become better, as extraordinary costs diminish and as
      confidence returns in regard to stewardship institutions like FOS.
      A very good press release summarizing the details of financial
      management by the OCA was recently posted by Fr. Paul Kucynda on the
      official OCA website, q.v.
      Charity management

      Using the monies from the loan, every effort is being made to assure
      that every "dedicated" fund is fully restored to the levels
      represented by donations for the purpose; this work � made very
      difficult by the accountancy mess -- is not yet fully complete, but
      is very well-advanced, and is regarded as the highest priority. At
      the same time, the Charity committee is overseeing restricted
      expenditure of these funds for their intended purpose, and is
      facilitating � under the guidance of the Council � the distribution
      of the funds; good works are finally happening. As well, the
      committee works with Finance to establish "Charity" as a normal line
      in the operating budget.

      Upgrade of computer and financial software; other IT matters

      One of the most hampering factors in dealing with the past was that
      Syosset not only had ancient and rather feeble computers, but was
      using an idiosyncratic accountancy software incapable even of the
      simplest bookbalancing. We have invested in the installation of a
      modern hardware system, with a new server capable of handling an
      important accountancy software (from Blackbaud) designed for not-for-
      profits. It is expected that all the new administrators will become
      trained and competent in the use of this information technology,
      which will make possible regular financial management and audits. Web-
      site management is being reworked as well, and other IT matters are
      bring brought into the 21st century.

      Joint meetings with the Holy Synod

      One of the most exciting developments of the past triennium has been
      the decision to hold annual meetings of the joint Metropolitan
      Council and Holy Synod, to share mutual concerns, balance
      governmental decision-making to promote the spirit of conciliarism,
      and maximize direct communication. The first of these, in Dec. 2006,
      was a major success even though it had to deal with "hard" material;
      the next will be in October 2007. The joint meeting was as important
      for its positive spirit and dialogue as for deeds.

      All-American Council

      Heeding the widespread request of the faithful � which, inter alia,
      included a resolution by the Archdiocesan Council of Canada � that
      the All-American Council should meet sooner than 2010 -- the long
      interval was planned as an attempt at cost-saving. The next AAC is
      now scheduled for Summer or Fall of 2008. This is the minimum amount
      of time possible to make the complex arrangements for such a large
      gathering. It will be a simpler affair, dedicated entirely to church
      business.

      Investigation of what went wrong in the past

      This process has been exceedingly difficult, and has been the source
      of considerable pain and soul-searching. Before reading the
      particulars which follow, everyone is urged to re-read the second
      paragraph under "overall theme of this report" above, and to approach
      this topic in the spirit outlined there.

      It must also be emphasized that the work of investigation is still
      incomplete, that important actions with regard to individuals are in
      process and not yet complete � and in a Christian community like
      ours, such corrective action also entails striving to maximize
      repentance and healing, which is something more than mere justice �
      and that significant issues of potential liability are involved.
      Hence, much of the detail which has been discovered in the
      investigation cannot now be made public, and some of it probably
      shouldn't ever become fodder for public tale-telling; we have all
      seen how OCANews has shifted tone throughout the process from earlier
      whistle-blowing fact-publishing to an unrelenting rhetoric of
      innuendo, attribution of motives, and universal suspicion. The one
      issue which should count when probing the past is to determine where
      our practice became faulty and why this happened, so that such
      incidents will not recur; as well, we seek to maximize the
      possibility of restitution of anything which has gone awry.

      For almost two years, investigative fact-finding was placed with the
      specialized law firm of Proskauer, Rose; they uncovered evidence of
      considerable financial mismanagement and misdirection, some of it
      willful and deliberate. During the past year, the Metropolitan
      Council has had its own Special Commission, created at the direction
      of Metropolitan Herman, to act as liaison with Proskauer, Rose;
      recently, this Commission returned a comprehensive summary report
      outlining as much as was known at the time about wrongful practices
      and lack of sufficient controls. The Council has asked that the
      Commission continue its work, which is ongoing, to get to the bottom
      of certain as-yet unclear matters, and this work is in process; as
      Metropolitan Herman has promised, "this process is tedious and time-
      consuming, but we will be thorough." The results will be announced as
      appropriate when the task is complete, and until then, patience is
      required, most particularly because the subjects are sensitive and
      contain the potential for much harm if used pruriently.

      Attitudes and patience

      Certainly, in these days of electronic communication, everyone in the
      OCA is aware of the level of angry judgments and demand for immediate
      sweeping changes, restorations, and also retributions. The theme of
      this report is that during the past three years of very hard work the
      demands for change and restoration are, in fact, almost completely
      met, but this required deliberation, planning, care, and caution, and
      a primary urge to be fair, and it is being accompanied by deep
      structural re-adjustment which should prevent such grave difficulties
      from ever happening again. To do such work well and faithfully and
      thoughtfully is a long and complex task; what is needed from all the
      faithful everywhere at this time, in order for the work to proceed,
      is patience and understanding, and even more, prayer: prayers for
      wisdom in discernment, fairness in judgment, compassion and mutual
      sympathy. If we can find such an attitude in all of our hearts, we
      will certainly see a restoration of trust taking the place of
      inflammatory rhetoric. And once the needed changes in management
      structure, working processes, and ethics are firmly established, and
      the investigation of the past is ended, we will be able to build on
      what is in our hearts to establish the next and most critical step,
      finding the true means for deep repentance and healing.

      In all of this action, decision-making, and work the Metropolitan
      Council has experienced cooperation and support from Metropolitan
      Herman and all others working currently at Syosset, and the spirit at
      meetings has been one of lively debate, respectful acknowledgement
      and evaluation of all positions, and final decision-making on the
      basis of a common mind; we are all working together and all have the
      good of the church at heart. The faithful are urged to see two very
      full and excellent assessments of the process by Metropolitan Herman,
      which are posted on the official OCA website: (a) his interview on
      Sept. 8 2006 with Protodeacon Peter Danilchick (in the Q & A section,
      #5), and (b) his Address to the most recent Metropolitan Council,
      June 12-13 2008

      Questions, Comments or responses:
      Prof. Richard Schneider,
      rschneid@... "
      --- End forwarded message ---



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