Unrealized losses account for significant deficit
January 21, 2016, WORCESTER, MA -- Following a complete audit of its financial accounting, the Diocese of Worcester has issued online
and online and printed editions of the
Annual Report on Financial Activities
for the fiscal year ending August 31, 2015.
In his letter, Most Reverend Robert J. McManus, S.T.D., Bishop of Worcester, wrote that the Diocese was challenged on a number of fronts, including $840,001 in unrealized losses on investments. The Bishop referred to the unrealized losses as “primarily a reflection of the state of the market when our year ended on August 31.” The Statements of Activities showed an operating deficit of $1,192,704 after expenses totaling $25,178,740 for 2015 compared to a surplus of $1,276,057 the previous year, primarily from unrealized gains, on expenses totaling $25,271,377.
Bishop McManus wrote that even with a subsidy of $800,000 from Partners in Charity, Priests’ Retirement Care operated at expenses over revenues by $1,230,247, up from the previous year’s difference of $993,535. He expressed his gratitude to the committee that coordinated the Second Annual Celebrate Priesthood event held in the fall of 2015 which raised $150,000 for the current fiscal year. He also noted that the Diocese has established an ad-hoc committee “which is developing innovative ways to reduce costs while providing quality care for those retired priests who dedicated their lives to showing the face of God’s mercy through their priestly ministry.” The total expenses incurred for retired priests care were 4% higher than the previous year.
The other area which he noted as a challenge is the need to service outstanding debt, which cost Central Administration $976,315 in interest. He noted the increasing number of parishes which are reporting operational deficits in their annual reports and announced that “the Diocesan Finance Committee is exploring alternatives in order to remedy this unsustainable situation.”
The Diocesan Expansion Fund, which is “essentially a savings and loan for the parishes and the diocese,” ended the year on a positive note at $1,618 after unrealized losses on investments of $541,820.
Partners in Charity revenue appearing in the FY2015 report was raised in the 2014 campaign and was disbursed to 30 agencies, ministries, and programs. 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 2015 appeal raised 98% of its $5 million goal and he expressed his gratitude to the parishioners and parish leadership who supported the appeal.
The St. John Cemetery System showed a balanced report due in part to a subsidy of $69,179 from Partners in Charity, down from $148,852 in the previous year. The Catholic Free Press operated with a loss of $145,522, compared to a loss of $124,451 the previous year, attributed principally to “uncollected receivables from the parishes.”
Central Catholic Schools’ operating expenses totaled $12,244,702 resulting in expenses over revenues of $176,872 prior to accounting for depreciation and non-operational funding. Central Catholic (C.C.) 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 1,564 students in Pre-K through grade 12 in those four schools during the school year ending June 2015.
The complete text of the Bishop’s management letter accompanies the Annual Report on Financial Activities for FY2015 prepared by the diocesan Office of Fiscal Affairs. The Annual Report on Financial Activities is being distributed as a supplement to parishes for distribution on the weekend of January 24th 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.
Bishop McManus also noted that, although they are not included in these financial statements, all the
individual parish financial reports
are also posted online at worcesterdiocese.org.
Any questions about the reports can be directed to Carol Adams, director of Fiscal Affairs at 508-929-4340 or by email to firstname.lastname@example.org.