Click here for the Statement of revenues and expenses for the year ended June 30, 2010
Dear Friends in Christ:
Once again, we are publishing an accounting of the financial operations of our diocese for the fiscal year which ended June 30, 2010. As we have done in past years, we have also included a consolidated financial report of our high schools and parishes. This is done in the spirit of accountability and transparency.
2010 was an exciting year for the diocese. Bishop Kevin C. Rhoades was welcomed to the Diocese of Fort Wayne-South Bend — he was installed and has settled in. Bishop-Emeritus John M. D’Arcy seems to be cutting down on his workload a bit — although still staying busy and enjoying his retirement. The year saw significant improvements from 2009 financially — we went from a $5.9 million loss to a $1.7 million loss, which is still a concern.
Of our 52 departments, five were over budget operationally. Some reasons are installation costs and higher retirement costs during 2010. The Archbishop Noll Center had significant structural work done. Seminarian education was higher — we had more seminarians than budgeted — which is a good thing, and paper costs for Today’s Catholic were significantly higher than budgeted. Those five departments were $400,000 over budget. In addition to that, the loss includes $300,000 in depreciation and our health and accident insurance fund had a $700,000 loss, which was a precursor of things that have happened in fiscal year 2011. On the bright side, in 2011, the departments are coming in under budget and investment income is up over 12 percent year-to-date.
DIOCESAN AUDIT The diocese is audited every year by Leonard J. Andorfer & Company, a certified public accounting firm, and, as in the past, no exceptions were noted. This means that the diocesan books, records and accounting principles are conducted in accordance with generally accepted accounting principles. This audit, along with the management letter, is presented not only to the Audit Committee, but to the entire Diocesan Finance Council; and the council is given time alone with the auditor, without the presence of diocesan officials, to be sure that they were given full access to all appropriate financial records.
For the past several years, the United States Conference of Catholic Bishops (USCCB) has required that the Diocesan Finance Council sign a report indicating the following: 1) that the council has met quarterly; 2) that the audit and the management letter have been reviewed; 3) that the budget has been reviewed. This report and certification must then be sent to the Metropolitan Archbishop of the Province, which, in this case, is the Archbishop of Indianapolis. We require similar reporting from our parishes to the diocese.
PARISHES It is also important that there be accountability and transparency in parishes. According to canon law, every parish must have a parish finance council. We have two retired accountants who do a financial review of every parish every two years; in addition, every parish is audited at the time of a pastoral change. During the past five years, we have sent this financial report, done by our two auditors, to each member of the parish finance council. This enables the review to be discussed at a regular meeting. As indicated above, controls have now been established similar to the accountability of each diocese.
It is important to understand how the Annual Bishop’s Appeal has sustained the parishes. It was the hope of our lay leadership prior to the institution of the appeal that the parishes would benefit. This has become a reality. The appeal has increased the incentive of parishes to seek funds. During the 24 years since the appeal began, our parishes have engaged in major capital fund drives. Since the appeal began, fund drives for parishes have brought in over $125 million for new buildings and renovations approved by the Diocesan Finance Council. This includes parish initiatives linked to the Legacy of Faith. Also, $127,000,000, which would have been paid to the diocese under the previous system, now remains in the parishes. In addition, $4.8 million from the appeal has been given in grants to parishes in need. The 24th Annual Bishop’s Appeal was the highest in terms of pledges, attaining $6,267,759. We put emphasis on improving the financial stability of parishes that are experiencing deficit operations.
LEGACY OF FAITH The Legacy of Faith campaign is also parish-oriented. As of May 31, 2011, $9,137,654 has been returned to parishes from the Legacy of Faith campaign. There were 11 parishes who had a combined drive. This means that, in addition to the Legacy of Faith, they sought to raise funds for a particular need, such as schools, increased classrooms, improvements in the church, etc. These parishes realized a total of $34 million over and above their commitment to the Legacy. This is in pledges, which they hope to receive over three to five years. A summary is as follows:
Total Pledged: $48,589,464
Total Paid: $42,830,830
Distributions: $3,882,772 (from Endowments)
TWINNING PARISHES A number of parishes have agreed to twin with certain targeted parishes to help them provide a full Catholic education. From January 1999 thru April 2011, a total of $1,947,875 has been received by 16 parishes. This is true Christian stewardship; and most of the parishes making these contributions do it as part of their parish stewardship effort. These parishes give a proportionate gift to other parishes in need. This twinning program has saved several parish schools.
THE GUARDIAN ANGEL SOCIETY A group of people devoted to our schools formed the Guardian Angel Society, which has already raised $1,557,553 in its first 12 years to help with tuition for students in those elementary schools, which have a genuine need. In addition, $80,000 is pledged for its 13th campaign. There are no administrative costs for this initiative. All funds go directly to pay tuition. Special appreciation goes to William Dotterweich, who guides and overseas this important project.
HIGH SCHOOLS Over $24 million has been raised for building programs in our four high schools. All four high schools have recently engaged in or are preparing future building programs. The high schools continue to flourish, but not without challenges. The Annual Bishop’s Appeal gives $1.7 million to the high schools every year, which has created a sense of stability. Next year, tuition will increase by $150 in our high schools. This will help us to pay for the increase in teacher salaries. Our high schools are also audited every year by an independent CPA firm. Each high school has presented a balanced budget for the fiscal year beginning July 1, 2011. Three high schools have debts to the diocese and all are paying on those debts. Saint Joseph’s High School has received final approval to begin construction on a new high school starting June 1, 2011.
CATHOLIC COMMUNITY FOUNDATION OF NORTHEAST INDIANA Both the Development Office and the Business Office have helped us to put in place the Catholic Community Foundation of Northeast Indiana, which will enable parishes, high schools and other diocesan institutions to raise funds for an ongoing endowment. It is my hope that many parishes, especially those with schools, will initiate an endowment. It takes just $5,000 to start an endowment for a parish or diocesan institution. Currently, there are 106 endowments in the Catholic Community Foundation. Talk to your pastor or school board about establishing an endowment for your parish and/or parish school. To establish an endowment and experience endowment growth involves planned giving bequests, annuities, remainder trusts, as well as gifts and other creative ways by which you can make contributions. Funds placed in this trust will remain there and grow, and the interest realized will continue to fund the designated purpose for years to come. These are gifts that keep on giving. Those who contribute will determine the area where these funds are to be restricted. Regular annual reports and quarterly newsletters are sent to the donors. The Catholic Community Foundation now contains $15,108,504.
INVESTMENTS Our investments are overseen by Slocum & Associates of St. Paul, Minn. Investments are placed carefully so as to avoid excessive risk. We have a very diversified portfolio, fully in keeping with Catholic moral teaching. Slocum & Associates meets with our Investment Committee on a quarterly basis. In the fiscal year in question here, investments gained 10.4 percent. Through the first nine months of 2011, the gain is over 12 percent. The current asset allocation is detailed in the pie chart below.
The past fiscal year was a time of change for the Diocese of Fort Wayne-South Bend. The parishes, schools and institutions of the diocese continue to build a sound financial footing. Expenses are being watched very carefully. Bishop Rhoades put in place a new Diocesan Curia, which should reduce expenses somewhat; investment markets appear to be strong. The people of the diocese are very generous as the 24th Annual Bishop’s Appeal realized the highest ever in pledges. Some challenges are our health and accident insurance fund which continues to deteriorate during 2011 even with a 10 percent increase in premium costs. Starting July 1, we raised those significantly again to our locations and employees. The funding of our lay pension plan is also a concern. We are looking at different options on reducing some of the expenses to the diocesan locations pertaining to our lay pension plan.
Joseph G. Ryan, Chief Financial Officer
DIOCESAN FINANCE COUNCIL
Most Rev. Kevin C. Rhoades
Msgr. Robert Schulte
Deacon James Fitzpatrick
Ms. Alice Kopfer
Mr. Arthur Decio
Mr. Thomas Skiba
Mr. Jerry Kearns
Mr. Albert Gutierrez
Sister Jane Marie Klein, OSF
Mr. Jerry Hammes
Mr. George Witwer
Mr. Joe Dahm
Mr. Michael Hammes
Mr. Thomas Blee
Mr. Christopher Murphy
Mr. Vincent Tippmann
Mr. Scott Malpass
Mr. Joseph Ryan
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