Unrealized gains account for surplus for Diocese

By William T. Clew

The Diocese of Worcester finished the 2014 fiscal year with an operating surplus of $1,276,057, according to information released by Bishop McManus after an annual audit of diocesan financial activities.
Expenses for 2014 were $25,271,377. In fiscal 2013 the diocese had a surplus of $122,418 on expenses totaling $24,750,617.
In a letter to the people of the diocese, the bishop said the financial reports from the diocesan ministries and agencies “demonstrate good stewardship of the donations we have received either directly or through our parishes.  Agencies and ministries funded by Partners in Charity operated within their allocations. It raised $5 million during this past fiscal year, having incurred less than 4 percent in fundraising costs.The total raised includes a contribution from a $1.6 million bequest which will endow this appeal for the future, enabling us to support 28 ministries for the current fiscal year. I am grateful for the commitment to our mission by over 19,226 donors in our diocese, including 1,055 new donors and the 108 members of the St. Paul Society who donated a minimum of $5,000 each.”
The report showed that the Priests’ Retirement Fund had expenditures of $2,653,420. It received a subsidy of $550,000 from Partners in Charity, which reduced its deficit to $993,535.
In his letter the bishop said that the unfunded portion of  priests’ retirement “is an ongoing concern…. I am grateful  to the committee that came together last year to begin the task of raising awareness of this critical need in our diocese. We held the inaugural fundraiser, ‘Celebrate Priesthood,’ in the fall of 2014. That effort will continue and will assist with additional revenue in the 2015 fiscal year.”
Central Administration had revenue of $3,943,460 and expenditures of $3,122,905. Central Administration’s largest single expense was debt service, which cost $995,956. In his letter the bishop said he appreciated the staff and volunteers “who participated in our presentations around the diocese on parish financial reporting and effective parish finance councils.”
He said the fiscal affairs office “will provide dedicated assistance beginning in 2015 to help parishes with their goal of balanced budgets, which will, in turm, reduce the need for Central Administration to borrow funds to cover parish indebtedness.”
Central Catholic Schools had income of $11,840,983 and expenditures of $11,924,700, leaving a deficit of $83,717 which was covered by funding in that amount from Partners in Charity.
Central Catholic schools include Holy Name C.C. Junior/Senior High School, St. Bernard C.C. High School in Fitchburg, and St. Peter-Marian C.C. Junior/Senior High School, as well as St. Peter C.C. Elementary School. There were 1,623 students in Pre-K through grade 12 in those four schools during the school year ending June 2014.
“The marketing study of our Catholic schools developed in the previous fiscal year has already born fruit with the announcement of a new academy uniting two parochial schools in Webster and the inclusion of an advanced academy at St. Bernard Central Catholic High School in Fitchburg,” the bishop wrote. “We will continue to make improvements in marketing and school governance as a result of that study.”
The St. John Cemetery System showed revenue of $1,214,417 and expenses of $1,363,269, resulting in a deficit of $148,852. That amount was covered by funding from Partners in Charity. The bishop said the system faces ongoing challenges with the management of many former parish cemeteries and the continuing choice of cremation over interment. The diocese will engage a marketing consultant for cemeteries to “help identify ways to combat this troubling trend,” he said.
The Diocesan Expansion Fund (DEF) had revenue of $2,965,903 as well as an unrealized gain on investments of $839,486.  Expenses totaled $2,022,737, leaving a surplus of $1,782,652. Revenue from interest on loans was $1 million more than last year.
“I am grateful for the prudent oversight of our DEF Board,” The bishop wrote. “The DEF provides a safe and secure resource for parish and diocesan savings while providing for the borrowing needs of our parishes.”
The Catholic Free Press showed revenues of $513,958 and expenses of $638,409, for a deficit of $124,451.
“At the heart of all these numbers is our mission: to evangelize,” the bishop wrote. “Following the direction of our Holy Father, Pope Francis, we must use everything at our disposal to be witnesses to our faith within and beyond our church walls, bringing Christ and his message to those we meet in the public square and on the periphery of society. To that end, over the coming year and beyond, we are developing a process to review collaboratively our diocesan services to strengthen mission-oriented spending.”
The complete text of the bishop’s management letter accompanies the Annual Report on Financial Activities for FY2014 prepared by the diocesan Office of Fiscal Affairs. The Annual Report on Financial Activities is being given to parishes for distribution and is posted at www.worcesterdiocese.org. A copy of the audited Financial Report is also available online. The audit was done by O’Connor, Maloney & Co., P.C. of Worcester.