Diocese reports operational deficit

By Raymond L. Delisle
Special to The Catholic Free Press

WORCESTER – Rising operational costs have resulted in a deficit for the Diocese of Worcester, according to financial statements and the annual report issued for the 2018 fiscal year.

In his accompanying letter, Bishop McManus wrote that “basic operational costs continue to rise. Specifically, we face rising healthcare costs, deficits in retired priests’ care, an aging infrastructure in schools and parishes, and outstanding receivables due from parishes which are financially challenged.” As a result, the diocese reported a total operating deficit of $1,410,316. After including unrealized gains on investments, the annual report on financial activities reports a deficit of $832,882 or 3.4% of total support and revenue. By comparison, there was a 4.25% surplus the previous fiscal year after accounting for unrealized gains on investments.

Following a complete audit of its financial activities, the diocese has issued online Financial Statements and the Annual Report on Financial Activities for the fiscal year ending Aug. 31, 2018. Both can be found at worcesterdiocese.org/fiscal-affairs. The report also highlights many of the accomplishments of the diocesan ministries and Partners in Charity recipient agencies during that timeframe.

The financial report does not include the financial results of parish and private schools, or of individual parishes. Parish financial reports are posted at worcesterdiocese.org/parish-financial-reports-for-fy2018.    

Bishop McManus recognizes that the diocese faces some specific challenges.

“While we are blessed with the continued commitment and generosity of many faithful donors to Partners in Charity, Celebrate Priesthood and other fundraising initiatives, we are facing a declining donor base across our diocese given that there are fewer younger families who are following in the footsteps of older generations in supporting sacrificially their parishes and the diocese.”

Certain ministries are also facing ongoing challenges. As Bishop McManus noted, “Catholic schools as a whole in our diocese continue to face declining enrollment due to a reduced number of young people and greater competition from public schools with new or recently built facilities.”
The letter noted that the diocese is moving forward with the Legacy of Hope capital campaign “to endow crucial areas of our diocesan mission, which are most in need.” The largest shares of this campaign are dedicated to parishes themselves (40%) and to Priests’ Retirement Care (40%).  Priests’ Retirement Care experienced a deficit of $414,364 after applying $600,000 from restricted funds and $225,000 from another successful Celebrate Priesthood event held in October 2017.

Operating expenses for Central Catholic (C.C.) schools totaled $12,998,001 resulting in a deficit of $200,995. Revenues came from a variety of sources including tuition ($10,744,170), school-based fundraising ($745,111), Partners in Charity ($450,673), and restricted funds ($182,378). Central Catholic schools include 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 1,407 students reported in Pre-K through grade 12 in those four schools during the school year ending June 2018 compared to 1,495 the prior year.

 The complete text of the Bishop’s management letter accompanies the Annual Report on Financial Activities prepared by the diocesan Office of Fiscal Affairs along with a “By the Numbers” impact report from many of the diocesan agencies. The Annual Report is being sent to parishes for distribution at Masses on this weekend and is posted online at worcesterdiocese.org/fiscal-affairs. A complete copy of the audited Financial Report prepared by O’Connor, Maloney & Company, P.C. is also available there.
Included with the Annual Report is a review of the 2018 Partners in Charity Appeal which raised $5,076,252 in cash and pledges from 16,454 donors as of August 31, 2018. The review also provides a breakdown of the 4,155 donor households who enrolled in the appeal’s eight leadership giving societies. That appeal raised funds which are being expended in FY2019. The review also shows charts with a breakdown of funds which were raised during the previous fiscal year and used during FY2018 by the 28 agencies and ministries which are supported by Partners in Charity.

Any questions about the reports can be directed to Paul Schasel, director of fiscal affairs at 508-929-4333 or by email to pschasel@worcesterdiocese.org.