Questions & Answers

to Gordon Gordey

Dear Father Baxter et al,

Here are my questions on the 2023 Financial Statements asked at the UOCC AGM on Saturday, March 30. I asked these questions in the spirit of contributing to outcomes that lead to the continued sustainability of our Orthodox Church.

Question 1 - Note 9 – Accounts Receivable

Part a.

I have a question about the disproportionately large Accounts Receivable amount of $623,760, adjusted to $596,274. I am concerned that this amount represents approximately 60% of annual expected revenue. My understanding is that industry standards allow for receivables to be at a maximum of 5%. Being that UOCC receivables have been above $450,000 for three of the last four years this line item seems to simply roll over

Answer provided by Jennifer Parks

I, nor our auditor Larson Hogberg is aware of any industry standard for accounts receivable. 5% is a very low amount for a business, but it may be realistic for an individual parish.

Further, please see my response above to Question # 1 from Section 1: Questions from Email from Donna Reed via Chancellor 4/2/24.

Part b.

Is there a recommendation from the Internal Audit Committee on adjusting the receivables to an acceptable expectation of collection so the 2024 budget, and in reality the budgets for the next three years, can be determined with realistic revenue expectations?

Answer provided by Fr. Baxter.

The Audit Committee is a body that is independent from the Consistory Board, Chancellor and all other UOCC Administration. These questions should be submitted to the committee in writing, and they will respond accordingly.

Part c.

Although the External Auditor states they respond to information with which they are presented, my decades of experience in the not-for-profit sector have always had an External Auditor provide a strongly worded caution in their notes to the financial statements when the receivables are so out of line with their professional audit experiences. This is part of their duty of professional “heads up” conveyance. Has there been a discussion as to why they choose to remain silent on this item?

Answer provided by Jennifer Parks

Larson Hogberg, please direct me in response.

Part d.

Others at this AGM have addressed that the Accounts Payables are at a similar 60% of Revenues which, together with the Accounts Receivable, raises serious concerns about our Church being solvent within two years. I’ll leave this question to someone else.

No question, no answer.

Question 2. Contingent Liability

The “former Bonnyville pastor” lawsuit has been on the financial statement for some time. The External Auditor states: “The Church has provided its insurance carrier with correspondence and documentation related to this matter.” Have either the Internal Auditors or the External Auditors provided guidance on whether or not the UOCC should set aside a contingency dollar amount for a settlement $1 million plus outcome?

Is there clarity to UOCC members on:

Who is carrying the liability for the legal outcome? Is it wholly the Insurance company? Is it shared?
What year was the lawsuit brought?
Can the Insurance company provide a letter as to the status of the lawsuit? In industry no one would touch UOCC to invest in or purchase with this outstanding Contingent Liability?
What is the UOCC cost with the Insurer handling this? Have our premiums increased? Is there a legal retainer UOCC is paying outside of the Insurer’s involvement?

Response provided by Fr Baxter.

The “Contingent Liability” that the UOCC faces from the lawsuit brought by Fr. John Lipinsky over a decade ago is an action item for the current Chancellor. He is seeking resolution both in court and to find a way towards settlement with a claim from Fr. Lipinsky with the Insurance Company that had a policy with the UOCC at the time of the lawsuit.

I cannot comment further on this matter, as there is activity with our Attorney in Edmonton and with the Insurance Company.