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7.23.09 First Reports from  Assembly


The General Assembly of the 49th Convention of the Antiochian Archdiocese began today at the JW Desert Springs Marriott Resort and Spa in Palm Desert, California with Archdiocesan security guards, posing as hotel security, checking the attendees, looking for “Mark Stookey”. The real problem, though, was not a phantom “Mark Stookey” but a 13-page Report entitled: “On the Necessity for an Ongoing Independent External Financial Audit of the Self-Ruled Antiochian Orthodox Christian Archdiocese of North America” that was being distributed by delegates to other delegates.

The unsigned report cites actual examples of “deficiencies, omissions, and inconsistencies” in the Archdiocese’s current financial reporting, as well as general problems such as “unaudited financial statements”; and “long-neglected legal requirements”. It advocates the inclusion of a complete set of financial statements and disclosures in the Archdiocese’s annual financial report, an annual independent external audit of the Archdiocesan financial statements, the establishment of a baseline for this annual audit through an audit of the three previous years ( 2006-2008) by one of the “Big Four” international accounting firms and the establishment of a truly independent Audit Committee by the Board of Trustees.

Hardly the things revolutions are made of - but Archdiocesan officials were quick to denounce the report as “not an official Archdiocesan document”, and physically manhandled at least one delegate who was attempting to pass them out. Archdiocesan security then confiscated as many of the documents as they could lay their hands on. This, of course, only made more attendees want their own copies to read for themselves...

An "Executive Summary "of the Report follows or you can the full document here.

Executive Summary

In a recent interview in The Word magazine, Metropolitan Philip commented on the financial scandal that has rocked the Orthodox Church in America (“OCA”) in recent years and praised the OCA for the steps it has taken to increase its financial transparency.

As faithful throughout the Self-Ruled Antiochian Orthodox Christian Archdiocese of North America (the “Archdiocese”) came to grips with the recent ecclesial crisis in our Archdiocese, they began to notice that the Archdiocesan financial statements are neither audited nor complete and to hear (and perhaps even believe) rumors of financial improprieties. As a result, a great many members of the Archdiocese are now beginning to echo our Metropolitan’s sentiments in calling for independent financial audits and enhanced financial accountability in the Archdiocese, so that shadows of rumors might be permanently chased away.

The fraudulent financial activity within the OCA went undetected for years and became deeply entrenched for many reasons, including:

• Strong and misplaced trust by the faithful in the honest handling of Church funds and assets by the hierarchy and governing council;

• Virtually nonexistent financial transparency; and

• The lack of regular, independent, external audits.

The OCA took a number of actions, all praised by our own Metropolitan, to cure its ills, including
(i) concerted efforts by the laity to “trust but verify” the statements of those in positions of authority,
(ii) the provision of more detailed, current, and frequent financial reports, and
(iii) engagement in regular, independent, external audits.

Engagement in regular, independent, external audits, now common in religious, as well as secular organizations, represents the most critical change in the OCA for a number of reasons. First, without such audits, true financial transparency is very difficult to achieve, as an auditor’s expertise and independence holds an organization to the highest standards and helps identify and correct, weaknesses in the financial reports and processes. Second, such audits create financial data in which the laity has confidence.

To be effective, an audit must be both (i) independent and (ii) external. An independent audit is conducted by a disinterested third party, not someone who belongs to the audited organization or who has a relationship with members of that organization. An external audit is conducted by an accounting firm, rather than by an auditor employed by the organization. Audits that are not independent and external will not contribute to peace, and it is with this in mind that this report sets forth the background rationale for an INDEPENDENT, EXTERNAL AUDIT of Archdiocesan financial activity:

Part I presents an overview of the many questions that are now being asked about financial matters within the Archdiocese, including questions regarding the incomplete financial reports, absence of independent audits, and failures by the Archdiocese to meet reporting requirements under New York Corporation law.

Part II analyzes a sample of the obvious deficiencies, omissions, and inconsistencies in the Archdiocese’s current financial reports, including

(i) the absence of a balance sheet,
(ii) the lack of standard reporting,
(iii) missing financial statements for designated and restricted funds, as well as subsidiary corporations of the Archdiocese (such as Conciliar Media Ministries, Inc.),
(iv) insufficient reporting on the performance and use of assets,
(v) shortfalls in contributions to the Order of St. Ignatius,
(vi) missing income from Archdiocesan sacramental fees and on honoraria paid to and gifts made by the Metropolitan, (vii) proper use of designated special collections, and
(viii) internal inconsistencies in financial reporting for the Antiochian Village, the Children’s Relief Fund, Food for Hungry People, and the Heritage and Learning Center.

Part III addresses the need for the Archdiocese to dispel a number of shameful rumors bandied about on the Internet.

Part IV concludes that, because of the foregoing, the following actions should be taken:

• Inclusion of a complete set of financial statements and disclosures in the Archdiocese’s annual financial report;

• Annual independent external audits of the Archdiocesan financial statements, with the first three years’ audits conducted by one of the “Big Four” international accounting firm.”

Update (11:45 AM PDST) The Assembly has just passed in a voice vote the following resolution:

“Resolved, that no person who has been an officer or director of a company which has been convicted of or a settled criminal charge or who has personally been convicted of or settled criminal charges may be a member of the Board of Trustees or the Local Synod.”

You can follow the Convention on multiple live blogs, from here or from the here .

- Mark Stokoe



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