Finance Group for L.I. Diocese Calls Reserve Funds Adequate
By Bruce Lambert
The New York Times [Rockville Centre NY]
March 27, 2004
ROCKVILLE CENTRE, March 26 - The financial overseers of Long Island's Roman Catholic diocese say that its reserves are barely adequate, disputing an accountant's criticism that it has been hoarding funds.
"At most, you can argue the reserve is adequate," said Lewis S. Ranieri, a businessman and member of the Finance Council of the Diocese of Rockville Centre, covering Nassau and Suffolk Counties.
The council on Friday issued a statement on the reserves in response to an analysis by H. Richard Grafer, a former partner in the Arthur Andersen accounting firm. The analysis, released this week by members of Voice of the Faithful, a lay group critical of the diocese, contended that $119 million in diocese reserves is four times its annual budget, while most nonprofit groups aim for a one-year reserve.
Mr. Ranieri, a founder of an investment firm, Hyperion Partners, faulted the analysis in an interview at diocesan offices here.
"It doesn't make any sense, and it's irresponsible," Mr. Ranieri said of the report. He defended the reserve as "not a lot of money, given the liabilities."
The criticism's timing is suspect, Mr. Ranieri said. Although Mr. Grafer drafted his report last year, it was released "during Easter, at the height of our annual fund appeal," Mr. Ranieri said. "It affects our ability to support good works."
Friends of Mr. Grafer said he was away and could not be reached for comment.
The council said that Mr. Grafer glossed over important facts. For example, the council said that a $46 million reserve helps cover self-insurance for workers compensation, general and automobile liability and properties like churches, hospitals and schools valued at $2.6 billion.
When the diocese relied on a smaller reserve in the 1980's, it was "blown away" by claims, Mr. Ranieri said. Compared with what is being insured, the current fund "is not a lot of money, if you think about it."
An $11 million fund is for litigation. Another $21 million is the "deposit and loan pool," part of which has been lent to needy parishes and may not be repaid, Mr. Ranieri said.
The mission fund of $39 million covers shortfalls in collections, helps needy parishes and pays for emergencies like a new roof for a high school. The council called this fund "substantially inadequate."
For 10 years, the diocese has used its reserves to balance its annual operating budgets, rather than to build more reserves, Mr. Ranieri said.