Is Boston Archdiocese Moving Money from Clergy Funds?

Boston Catholic Insider
January 27, 2012

http://bostoncatholicinsider.wordpress.com/2012/01/27/is-boston-archdiocese-siphoning-money-from-clergy-funds/


The annual report for the Boston Archdiocese was released yesterday amidst much hoopla over the "balanced budget." There is good news in the report, in that parish collections rose by 4.5% and the archdiocese appears to be on stronger financial footing than in recent years.

But what is not so clear from the reports is the extent to which costs may have been shifted around and money has been moved or redirected from other entities in order to achieve the "balanced budget." One example: the Clergy Funds, which provides health, welfare, and retirement benefits for 683 Boston priests–285 senior priests and 438 active priests.

A look at the 2011 annual report for the Clergy Funds shows they paid $13.5M in benefits and spent $2.3M in administrative expenses to do so. For every $1 in benefits paid, they spend 17 cents to administer the benefits, or about $3,357 in administrative costs for each priest receiving some benefits.

Included in those $2.3M of administrative fees is $427, 642 of "Service fees" to the Boston Archdiocese for "administrative, technology, and clerical services charged to the Clergy Funds by the Roman Catholic Archbishop of Boston." That $427K is on top of nearly $500K in salaries and benefits, $331K for contract services, and $230K for the plan administrator. A reasonable person might question if appropriate value is derived for all of those four areas, but BCI will give credit for the plan stabilizing in recent years, and the latter 3 areas are not the focus of this post.

That said, is the Boston Archdiocese really spending $427K in administrative costs to help service the Clergy Funds? Good question. The answer is not really. Sources tell BCI that is the result of an overhead rate applied to the Clergy Funds. Some of that is OK–IT help-desk support, building/facility costs, use of the photocopier, etc. But for that $427K to have been a real number, it would mean that beyond the full-time staff and contract services on the Clergy Funds' books, there would be the equivalent of another 5-6 full-time administrative assistants (~$50K each) plus a full-time IT guy ($100K), along with their associated benefits. One might reasonably ask if that reflects reality.

Incidentally, the amount charged back by the archdiocese for overhead rose 20% from 2010 to 2011 (from $355K to $427K), while the benefits paid actually dropped by 10% (from $15.1M to 13.5M). (Presumably, the increased overhead was associated with higher salaries and more people working on the plan to administer the lower amount of benefits. Makes sense?!)

Sources tell BCI that what really happens is the Chancellor applies somewhat inflated overhead rates to the entities that have the most money (i.e. Risk Management, Clergy Funds, Self Insurance, etc.) As stated a moment ago, some of that $427K charged back to the RCAB goes to pay actual administrative costs of supporting the Clergy Funds (IT support, building/facility, etc.) while some instead goes to pay for other things. Those other things could include the excessive six-figure salaries in the Office of the Chancellor and/or elsewhere in the ranks of the Pastoral Center/central ministries executive staff.

So when people donate to the Clergy Funds (Easter and Christmas Collection, annual fundraiser dinner), most of their donations go to the funds that directly benefit priests, which is how it should be. But about 17% of what they donate is consumed by administrative fees. And some portion of that 17% is apparently redirected to balancing the Central Ministries budget. If so, then some people might consider that a purpose other than that intended by the donor.

Is money being charged against one area to pay for a different one? Only a detailed accounting of the actual costs would confirm this.

This is not the only area of concern in the Annual Report. Once again, self-insurance funds were used to help balance the budget. Many $150K+ salaries were not disclosed. The $5M debt owed to St. Johns Seminary as of 1/1/2011 has still not been repaid.

More another time.