Feed My Lambs
by Bishop
William K. Weigand
January 5, 2008
Diocesan finances: The rebuilding begins
I call your attention to pages 15-17 (in the Jan. 5 issue of The Catholic Herald) where the financial statements are printed for the Central Administrative Offices of the Diocese of Sacramento, as of June 30, 2007. An independent audit has found them to be free of material misstatement. Although these statements do not include our four supporting corporations, the parishes, and Catholic institutions (which are separately prepared and audited), they do include the major financial funds of the diocese.
The annual audit is a key component of an extensive financial infrastructure that ensures funds entrusted to the church at the diocesan level are used in an effective and efficient manner to further the mission of the local church. Other elements are: a blue ribbon Diocesan Finance Council, chaired by Lon Burford, whose volunteer members represent some of the best financial expertise that our region has to offer; high level adjunct committees (Properties Committee and Investment Committee); talented and effective finance office staff; a very detailed budgeting, tracking and reporting system; and effective processes using the latest information technologies.
Since June 30, 2000, and the various financial challenges that devastated our financial resources, I nonetheless maintained confidence that our financial infrastructure would see us through — as it has. I am indebted to the members of the Diocesan Finance Council, its committees, and our capable staff who have steered a steady and prudent course. It is with this same confidence that we now slowly rebuild our diocesan financial resources. General Fund liquid reserves decreased from $28.3 million in 2000 to only a working capital level of $6.6 million in 2006; new Parish Fund uncommitted liquid reserves decreased from $6.4 million in 2000 to only $0.7 million now; and Self-Insurance Fund reserves decreased from $8.6 million in 2000 to zero in 2005. The challenge is clear.
A collaborative effort between myself, the Diocesan Finance Council, staff and consultants has yielded the following strategies for rebuilding diocesan reserves: (1) budgeting for positive operating results through continued spending discipline and pursuing opportunities for growing our revenues; (2) pursuing rights of recovery from insurance companies for sexual abuse losses paid; (3) pursuing reimbursements from religious orders for similar losses paid; (4) pursuing Cathedral memorialization opportunities (windows, font, altar, ambo, Blessed Sacrament Chapel, stations of the cross, etc.); (5) expansion of the Annual Catholic Appeal to include training of seminarians and the New Parish Fund, in addition to the main concentration on services for the needy; (6) enhanced program for planned giving, major gifts, and stewardship via The Catholic Foundation Inc.; and (7) the possible sale of three surplus properties when the real estate market recovers.
Several of these strategies have already had positive results, and the remaining strategies should begin to have a material impact during 2008. During the fiscal year ended June 30, 2007, we were able to restore approximately $2.5 million to our General Fund liquid reserves. We were not able to add to our New Parish Fund reserves, but did increase Self-Insurance Fund reserves to approximately $0.8 million during the year.
The Diocesan Finance Council recently reviewed “Best Practices,” issued by the Accounting Practices Committee of the U.S. Conference of Bishops and found that we already have in place nearly all of the recommendations and are ahead of the curve in the area of financial operations reviews of parishes.
Effective July 1, 2007, we have implemented these additional recommendations: (1) the requirement to have parishes report annually to the Bishop’s Office the dates on which the parish’s approved budget and financial statements were shared with the faithful; (2) the requirement to have parishes provide to the Bishop’s Office copies of such published financial statements/budgets; and (3) the requirement that the Pastor and Parish Finance Council provide a signed statement certifying that they have met, developed and discussed the budget of the parish.
Also, we are now adding to our staff a Coordinator of Schools Financial Services, who will: (1) perform approximately 15 parish school financial operations reviews per year so that each Catholic school will receive a review at least once every three years; (2) provide assistance/training to school bookkeepers and principals; (3) monitor and assist financially challenged schools; (4) review School Annual Financial Reports, maintain a database of information; (5) review school budgets; and (6) conduct school financial workshops, as needed. This position is modeled upon the Parish Financial Services Coordinator positions that have been so successful in assisting parishes in the area of accounting, budgeting, reporting and the use of standard internal control practices.
Real enthusiasm to continue and expand the mission of the church in our diocese was strongly articulated in the pastoral initiatives of the Third Diocesan Synod. But this can only be done if, as a community of believers, we also take up the financial yoke together: clergy, parishioners, religious, employees and bishops. We have made progress in functioning collaboratively, but we have more to learn. Please know that I praise God for all the blessings bestowed upon our Diocesan Church, especially for you, the generous and selfless people of God.
