2012 Annual Report – Archdiocesan Finance Officer Report
By John F. Bierbaum
Total revenue for 2011 reached $39,951,000 as compared to $40,446,000 in 2010. After significant increases in 2010, the primary sources of revenue, parish assessments and the Catholic Services Appeal (CSA) were down 6 percent and 7 percent respectively in 2011. The slight decrease in assessments is reflective of decreased contributions at parishes during the economic downturn in 2009 (base year for assessments). CSA receipts, as reported, are after deductions for rebates to parishes and allowances. On a pre-deduction basis, the CSA generated $9.5 million, greater than goal and prior year by $200,000. Both speak to the generosity of the Catholic community despite the severe economic conditions and slow recovery. Other income sources were similar to the prior year in the aggregate, although program income included in excess of $300,000 from participant fees for the World Youth Day in Madrid. Investment income included nearly $800,000 in gain from sale of an excess property. Operating expenses Operating expenses totaled $36,526,000 in 2011 as compared to $36,491,000 in 2010. Program costs increased $3.2 million while non-program costs decreased $2.5 million, and insurance claims decreased $700,000. Initiatives in program costs included strategic planning for schools and parishes, participation in World Youth Day, and investment in systems that could not be capitalized. Non-program costs declined primarily due to stabilization of accounts due from parishes, thus not requiring further adjustment for losses. Following is a narrative that explains the purpose of the various offices of the archdiocese. Also, an accompanying chart depicts the expenditures by program, including a correlation to use of the net CSA revenues. The archdiocese accomplishes its mission through the following offices and programs: Programs and other activities Clergy services The role of this department is to assist the archbishop in the needs and supervision of clergy in all aspects of ministry and pastoral care, which includes the following: - Center of Clergy Formation: Institute of Ongoing Formation for Clergy and the Institute of Diaconate Formation. Each entity of the center will provide an integrated approach to priestly and diaconate formation to include newly ordained priest gatherings, new pastors programs and ongoing formation opportunities for the presbyterate/diaconate. - Clergy Education: St. Paul Seminary School of Divinity tuition, room and board; St. John Vianney Seminary room and board; Graduation Education program; continuing education; sabbatical program; international enculturation; and a bi-annual presbyteral assembly. - Chaplaincies: Hospital chaplaincy; prison chaplaincy; and oversight of the Comprehensive Priest Assignment Board. - Supervision of Various Specialized Ministries: Support for above services and including the following offices and related organizations: international clergy, Leo C. Byrne Residence, retired clergy, Office of Vocations, and clergy medical and dental and other benefits and support. Community services The agencies within this department help men, women and children most in need within the local communities, including the poor, hungry, homeless and those with special needs. The archdiocese provides cash and non-cash support to Catholic Charities and CommonBond Communities (a housing agency for low- and moderate-income families, the elderly and the handicapped.) In addition, support is provided to parishes stressed by debt or operational issues. Education The Department of Education includes offices which support the education and formation of children within the Archdiocese of St. Paul and Minneapolis. This support would include: schools administration, catechesis and providing programmatic oversight of the Legacy Grant, an initiative supporting and transforming our Catholic urban schools. Major responsibilities of this department are to identify systemic needs of the Catholic school system and also to provide subsidies and grants to archdiocesan parish rural and elementary schools, archdiocesan high schools and the campus ministries programs. Parish services and outreach The parish services and outreach department provides an outreach ministry to members of the archdiocesan community, many of which are minority groups, specialized ministries and coalitions. Included are the offices of, or subsidies to: Hispanic ministry, Indian ministry and Archdiocesan Council of Catholic Women. Additionally, included is the Office of Parish Services, which supports the work of the strategic planning initiative, parish consulting archdiocesan offices, outreach ministries and parish personnel. Marriage, family and life This department provides support by assisting the laity and parishes through the offices and programs of: marriage preparation, laity, family, youth and young adults, respect life, pro-life groups, biomedical ethics, and outreach for disabilities. In addition, World Youth Day, National Catholic Youth Conference and other youth events are coordinated through the staffing and support of the department. Central Services The department of central services provides support and services to the central corporation staff and the parishes. The department includes the offices of, or subsidies to: finance, accounting services, printing services, communications, computer services, Metropolitan Tribunal, human resources, special services, maintenance, other collections and diocesan dues. Additionally, this department provides administrative services to the General Insurance Program, the lay and priest pension plans, the archdiocesan medical benefit plan, and other centralized programs within the archdiocesan community. Community relations This is the outreach and communications division for the Archdiocese of St. Paul and Minneapolis, and it conveys the messages of the archbishop and the archdiocese to the faithful and to many others within the community. It also listens to these audiences and communicates through a professionally staffed Communications Office and through distribution of assessment for The Catholic Spirit, the official archdiocesan bi-weekly newspaper. Non-program and other General and administrative The offices of the archbishop, bishops, moderator of the curia/vicar general, treasurer, administration and finance, and accounting services are included in the general and administrative reporting. Adjustment of the carrying value of amounts due from parishes and other entities are reflected in the category. Development and stewardship The department of development and stewardship supports the programs of the archbishop’s Catholic Services Appeal, parish financial consulting, stewardship forum, endowment efforts and other fundraising programs. The expenses within the development and stewardship category comprise the archdiocese’s fundraising expense. General Insurance Program The General Insurance Program of the Archdiocese of St. Paul and Minneapolis provides comprehensive, uniform coverage of all of the parishes and related entities in the archdiocese, as well as the Central Archdiocesan Corporation. The coverage includes building and contents, burglary, personal property, student accident, auto, public library, boilers and workers’ compensation. Financial position Net assets of the Archdiocesan Corporation were $40,788,000 at the end of fiscal 2011, or $3,425,000 greater than a year earlier. The bulk of the increase was in unrestricted and temporarily restricted net assets, as discussed above, while permanently restricted net assets (endowments and perpetual trusts) increased $233,000 due to an increase in the market value of underlying investments. After adjusting the change in net assets for revenue and expense items that did not result in or require cash, operations in 2011 generated $4,145,000 of additional cash, compared with a surplus of $5,484,000 cash in 2010. The difference between years was caused by the activities discussed above. In addition to the $4,145,000 of cash sourced by operating activities, $1,031,000 was realized from the sale of excess real estate and investments. Cash was used in the amount of $1,998,000 to improve archdiocesan property, equipment and systems, $989,000 of parish deposits were repaid, and $300,000 of external debt was repaid. Thus, the cash position of the archdiocese improved by $1,889,000 since 2010. The added liquidity will relieve pressure on cash balances that are experienced at certain times within a fiscal year. Further, the increase in cash will make it possible to continue to address specific parish and ministry issues. The archdiocese has for many years extended guarantees as credit enhancements for third-party loans to parishes and schools. The exposure to this contingent liability was reduced by $9 million to $57 million at the end of 2011. In summary During 2011, the quality of the archdiocesan balance sheet continues to be improved, and significant progress was made in addressing debt at the Cathedral of St. Paul and investing in systems improvements in the areas of fundraising and standardized parish accounting, as well as communication through the Internet and continued strategic planning. Serious questions remain about the financial viability of certain parish and school organizations. Because parish assessments are required for support of the archbishop’s primary obligations and functions, the collection of assessments is crucial. Thus, parish financial viability will continue to be a key focus in the coming years.
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