Diocese ends fiscal year with operating surplus

The Diocese of Worcester reduced its expenses and increased its operating surplus in this fiscal year, which ended Aug. 31, 2013, according to the diocesan annual report on financial activities.
The report followed a complete audit of the diocese’s financial accounting. It showed expenses totaling $24,750,617 for 2013, a $1.28 million drop from fiscal  2012, when expenses totaled $26,037,091. The operating surplus for fiscal 2013 was $122,418. In fiscal 2012 it was $109,804.
In a letter to the diocese Bishop McManus said “our financial reports demonstrate that we have been good stewards of the donations we have received either directly or through our parishes.”  He noted that “the various departments in our central administration exercised tight fiscal controls in order to operate within their budgets.”
Debt service cost $994,797. The bishop said that this is one of two areas of ongoing concern. The other is retirement programs for clergy.
Retirement programs for clergy were $39,465 lower than in fiscal 2012, but still showed a deficit of $715,325, despite a subsidy of $865,000 from Partners in Charity, the financial report showed.
“As I wrote last year, the trend of deficit spending in this area cannot and will not disappear in the near future, but ongoing discussions will help to bring improved cost controls to bear,” the bishop said.
In his letter, the bishop said that, “thanks to the prudent oversight of our Diocesan Expansion Fund (DEF) Board, I am pleased to report that the DEF saw a substantive increase of revenue over expenses of $215,700 after unrealized losses on investment. This fund provides a safe and secure resource for parish and diocesan savings while providing better-than-market rates for the borrowing needs of our parishes.”
Partners in Charity revenue appearing in the report was raised in the 2012 campaign and was disbursed to 30 agencies, ministries and programs in 2013. They included Catholic Charities, Grant-in-Aid for Catholic School Students, Haitian Apostolate Ministry, Seminarian Education, and Religious Education. In his letter Bishop McManus noted that the 2013 appeal raised $33,526 more than the 2012 appeal.
“I am grateful for the commitment to our mission by over 17,825 households in our diocese, including 1,608 new households who participated ...  and the 117 members of the St. Paul Society who donated a minimum of $5,000 each,” he wrote.
“The various departments of our central administration continued to exercise tight fiscal controls in order to operate within their budgets. We saw positive results from our investment portfolio which is guided by our investment committee of lay professionals and assisted by our investment advisory firm,” the bishop said.
Central Catholic Schools’ expenses totaled $11,652,177. Revenues exceeded that by $146,011, or less that 1.25 percent before accounting for depreciation and non-operational funding. Central Catholic schools include the financial activity of the Holy Name C.C. Jr./Sr. High School, St. Bernard C.C. High School, and St. Peter-Marian C.C. Jr./Sr. 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 2013.
“During the past year, I commissioned a data study to strengthen our schools in the areas of marketing and management, and it is encouraging to hear that broader interest by families at open houses was seen at many of our schools for the coming school year,” the bishop said in his letter.
“St. John Cemetery System continued to be challenged with the management of many former parish cemeteries and the continued choice of cremation over interment,” the bishop said. The resulting deficit of  $119,098, down from $167,820 in the previous year, was covered by a subsidy from Partners in Charity, according to the annual report.
The Catholic Free Press ended the year with a deficit of $119,147 or 18.4 percent of its expenditures. Operating within an approved deficit budget, the newspaper ended the year $28,361 better than anticipated, noted Margaret M. Russell, executive editor.
An 11 percent drop in revenue from parish subscriptions, totaling $31,884, contributed to an overall drop in revenue of  7.7 percent, she said. The newspaper lowered its operating expenses by 3 percent from last year; its advertising revenue was flat.
The bishop noted ongoing challenges to print media.
“Allow me to underscore the question at the heart of our mission,” the bishop said in his letter. “Why do we provide all these ministries and programs to so many people? It is what it means to be Catholic. We must be witnesses to our faith within and beyond our church walls, being Christ to those we meet and serving in the public square and on the periphery of society. My fervent hope and prayer is that, during the coming year, the Diocese of Worcester will prove to be a zealous and effective promoter of the New Evangelization.”
The complete text of the Bishop’s management letter accompanies the Annual Report on Financial Activities for FY2013 prepared by the diocesan Fiscal Affairs Office. The Annual Report on Financial Activities is being sent to parishes for distribution in bulletins on the weekend of Jan.  18 and 19 and is posted online at  www.worcesterdiocese.org. A complete copy of the audited Financial Report is also available online at worcesterdiocese.org. As in recent years, this year’s report was audited by O’Connor, Maloney & Co., P.C. of Worcester.
Any questions about the reports can be directed to Carol Adams, co-director of fiscal affairs at 508-929-4340 or by email to cadams@worcesterdiocese.org.