Budget Woes Still Plague Archdiocese

The National Herald - October 4-5, 2003

It faces debt of more than $6 million

By Theodore Kalmoukos

BOSTON – The [Greek] Archdiocese of America faces a debt of more than $6 million, according to a presentation made at a meeting of the Archdiocesan Council last weekend in New York.

Out of the $6 million, $4,086,731 is pre-existing debt, while the other $2 million is the current debt that includes part of accounts payable.

In addition, the Archdiocese is unable to fulfill its monthly financial obligation of $100,000 to the Hellenic College and Holy Cross School of Theology, to which it owes a sum total of $400,000.

According to confidential reports obtained by the National Herald, the Archdiocese owes $691,379 to the Ecumenical Patriarchate for this current year and part of 2002. The Archdiocese has been giving the Patriarchate $500,000 a year since the early 1990s.

The meeting was attended by 57 of the 90 members of the Archdiocesan Council. Many members raised questions about overspending by the central administration, which is under the control of the Archdiocese in New York.

The budget overruns for the eight-month period from January 1st to August 31st 2003 amount to more than $600,000 dollars.

According to the Director of Finance, John Barbagallo, some of the budget-breaking items include the Ionian Village, which went over budget by $84,000; Communications, which exceeded its budget by $112,000; and Internet, which went over by $74,000.

Leading the pack, however, was the Orthodox Observer, which went over budget by $157,000.

Mr. Barbagallo said that a new department created in January 2003, the Department of Parish Renewal, Outreach and Evangelism, had amassed expenses of $74,000 as of August 31.

“However,” said Mr. Barbagallo, “the Archdiocese received $20,000 in donations to offset expenses for that department.”

Another new department, the Department of Correspondence, has appeared on the financial report beside the existing Office of the Secretariat. No information was given about its role within the Archdiocese. However, more than a year ago, The National Herald reported that the Archdiocese employed a secretary who works out of her home in Greece. She prepares letters and other projects for the Archdiocese headquarters in New York, where another secretary finishes them.

According to Mr. Barbagallo’s report, “the Total Commitment collections for the eight-month period ending August 31, 2003 are ahead of budget by more than $275,000. The Archdiocese received a record $1.6 million in the month of August.” “Furthermore,” he said, “the Parishes have paid the Archdiocese more than $1.2 million more in 2003.”

The report explains that the increase is due to two initiatives the Archdiocese launched in July. First, the Archdiocese gave a 5 percent discount to those parishes that sent in their entire yearly obligation by August 31st. The second initiative was the 50-percent return to the Metropolis whose parishes paid all their delinquent obligations within one or two years.

Mr. Barbagallo said that out of the $1.6 million collected in August, $1 million is attributable to the 5 percent Discount Program.”

Mr. Barbagallo expressed concerns that those two summer incentives may negatively impact collections for the 4th quarter: “Our recent projections indicate that we may fall short on cash in the month of November. Also, the month of December, which normally produces collections of $1 million, may only produce $800,000 to $900,000. We will need a second source of income in December to make up for the shortfall.” Mr. Barbagallo expressed the hope that “the additional revenue needed in December may come from the new endowment fund.”

However, the new endowment fund which will be headed by Rev. Alex Karloutsos has not yet been established officially.

The National Archdiocesan Philoptochos Society has donated $100,000 to the Ecumenical Patriarchate.

In another meeting last week, The Holy Eparchial Synod, under the presidency of Archbishop Demetrios, convened for two days in New York to deal with the issues surrounding the Church’s ailing financial health. Many hierarchs recommended a more disciplined financial policy to ensure that Church operations remain within budget.

They discussed a letter that was sent by Jerry Dimitriou, director of administration and finances, which asks the Metropolises and Metropolitans to step up their efforts to collect more money from the faithful.

The hierarchs found Mr. Dimitriou’s letter offensive and said that the Metropolises do an adequate job of promoting the economic advancement of the Church. They attributed the problem to the Finance Department.

The Herald has learned that many hierarchs are not happy with Dimitriou’s entire approach.

Mr. Dimitriou attempted to place the blame of the overruns of the budget on the three new auxiliary Bishops by saying that they were not included in the initial budget, but Archbishop Demetrios was quick to dismiss his claim.

[ The National Herald - October 4-5, 2003 ]