The Greek Orthodox Archdiocese of America has announced new steps to clean up the way it safeguards the money it collects from faithful throughout the nation, in light of a multi-million dollar deficit and numerous improprieties, including the misuse of funds from various accounts to cover operating expenses.
The Archdiocese announced in a press release that “As a key part of the ongoing Archdiocesan effort to improve financial and internal controls, and in keeping with his commitment to proper governance and transparency, Archbishop Demetrios of America has announced the appointment of a new group of financial and legal professionals to serve as members of the Archdiocesan Council’s Standing Audit Committee.”
The press release emphasizes the Archbishop’s direct involvement and announcement, hoping to stave off growing national criticism about his own role in the years leading up to the revelations of the massive deficits and misappropriated funds.
Numerous individuals representing various Metropolises throughout the nation have been appointed to the audit committee and will implement new policies and procedures, according to the press release. Two individuals were also appointed to an “advisory” committee, separate from the audit committee, whose role will be to oversee the work being done.
The individuals are direct appointees of the Archbishop and all have expertise in various fields of auditing and financial services. All of the members of the new committee are members of the Archdiocese Council, which has raised some concerns.
The appointment of individuals from within the membership of the Archdiocesan Council directly contradicts the standards in place by the Archdiocese itself that it imposes on parishes. According to Archdiocese regulations, parish councils must appoint an audit committee from the general membership of the parish and not from within the parish council, itself.
Such distance between the audit committee and the “board” that governs the finances of the institution prevents potential conflicts of interest during audits.
One of the individuals appointed to the advisory committee, Jim Logothetis, a CPA and Senior Client Handling Partner at Ernst & Young.
His appointment has raised eyebrows in Chicago where he is currently embroiled in a number of lawsuits against Holy Trinity Greek Orthodox Church, where he once served as parish council president, while at the same time serving as president of the Hellenic American Academy, a local school. The two entities were onetime partners, both under Logothetis’ simultaneous leadership, during which financial agreements were signed by Logothetis, representing both entities. This has raised issues of possible conflict of interest.
The responsibilities of the Audit Committee will include assessing the reliability and accuracy of financial reporting; selecting external auditors; meeting with those auditors to review audit plans and results; reviewing internal controls and developing any necessary remediation plans; and monitoring compliance with applicable laws and regulations pertaining to financial controls.
The press release makes no mention of investigating and accounting for a deficit that has been reported to be more than $12 million and the misuse of various funds, as well as a major discrepancy that was reported in The Pappas Post last month when the Archdiocese announced that a “forensic audit was under way, while the Treasurer of the Archdiocese, Mr. Michael Psaros, told the finance committee of the Archdiocese Council that no such audit would take place.
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