Diocese facing the challenges of continued deficits

The Diocese of Worcester has released its annual report for the fiscal year ending Aug. 31, 2023. The audited financial report is posted on the diocesan website and an annual report highlighting major activities and departments is published as a supplement in Friday's printed paper. 

The diocese ended the year with an operational deficit of $762,077 as compared to a deficit of $1,257,626 the previous year prior to allowing for investments and bequests. The year ended with a change in net assets of $986,869 compared to a deficit of $2,328,649 last fiscal year after allowing for unrealized gains on investments, realized losses and bequests, according to the report.

In his management letter, Bishop McManus acknowledged that continuing deficits have reduced available funds to “critically low levels,” he wrote.
“As a result, following recommendations of the diocesan Finance Committee, we are taking significant and often difficult steps towards running on a balanced budget.”

These steps included no longer borrowing from the Diocesan Expansion Fund (DEF) to cover expenses and adopting a plan to reduce and eventually eliminate the interest costs “which were a significant part of our operational expenses,” he said.

He also noted that a major part of that debt was related to parishes not reimbursing the diocese for their portion of expenses such as liability insurance.
 
“Last year we asked all parishes to contribute an additional 2.5% to the cathedraticum, all of which is designated solely to reducing that debt to the DEF,” Bishop McManus said.

The letter cited other challenges which are either being addressed in the current fiscal year or were extraordinary last fiscal year including: the St. John Cemetery System, legal costs and settlements using unrestricted funds.
Last fiscal year the Office of Fiscal Affairs began replacing the outdated accounting system and old computers used by all chancery offices “to support that transition as well as to meet mandatory information security protocols.” He added the new system would offer “better controls and more timely reporting with less labor involved.”

The letter also acknowledged that in the current fiscal year, jobs are being eliminated “as people retire or jobs are no longer strategically necessary to meet today’s operational or pastoral needs.”

The management letter cited the importance of transparency in reporting the financial realities of the diocese, parishes and schools.

“I cannot stress enough how our parishes are also working with our diocesan parish liaison to operate within their means. The misperception that our diocese is flush with cash is a myth that must be countered,” he wrote.

“While emergencies and unique situations will always occur, we must do all we can to spend responsibly in central administration, parishes, and diocesan and parochial schools. We will continue to encourage parishes and schools to be transparent with their financial reports as well.”

Bishop McManus also recognized the generosity of donors to all areas of the local Catholic Church.

“We are continually trying to be the best stewards of the donations received from you, our faithful parishioners. Your financial support of diocesan appeals and collections such as Partners in Charity, Celebrate Priesthood and the Ash Wednesday Collection, as well as parish offertory and the many other special collections throughout the year, are greatly appreciated and highly valued.”

As in recent annual reports, the diocese also listed amounts received for national and international collections through the parishes and the diocesan online web portal.

The Office for Stewardship and Development included a recap of the Partners in Charity Appeal for FY2023, including a breakdown of how much was spent by the agencies and ministries funded. The appeal raised $4,637,869 from 11,961 gifts. Of the total number of gifts, the report highlights that 3,914 households were members of the eight leadership giving societies. 
The report includes the objectives and accomplishments of 16 diocesan agencies and ministries.

Bishop McManus concluded his letter, “we make a difference in the lives of not just Catholic parishioners but many people who reside in Central Massachusetts and are seeking hope. The number of people impacted by each ministry is promising, demonstrating that our mission is to save souls by bringing the joy of God’s love into people’s lives.”

The annual report and the audited financial report are posted online along with past diocesan financial reports at worcesterdiocese.org/parish-financial-reports.

FY2023 DIOCESE OF WORCESTER ANNUAL REPORT