Diocese Getting Handle on Serious Budget Deficit
Red Ink Cut from $794,000 to $76,000

By Bronislaus B. Kush
Telegram & Gazette [Worcester MA]
January 12, 2007

Worcester — The Roman Catholic Diocese of Worcester faced a financial crisis in 2003, as church leaders scrambled to cover a deficit of nearly $794,000.

But three years later, church money managers have come close to balancing the books, the diocese's annual report shows.

According to an audit by O'Connor, Maloney & Co. P.C. that was commissioned by the church, the diocese lost only $75,993 for the fiscal year that ran from Sept. 1, 2005 though Aug. 31, 2006.

"We have made significant strides toward balancing our budget, but the challenge continues," said Bishop Robert J. McManus, in a statement that accompanied yesterday's release of the report.

The documents show the diocese garnered $32,071,365 in revenues while paying out $32,147,358 in expenses.

The bottom line for the last fiscal year differs vastly from comparable figures from the previous three fiscal years.

"The diocese came close this year to the goal of balancing the budget," said spokesman Raymond L. Delisle.

In fiscal 2003, the diocese reported a budget deficit of $793,996 and a deficit of $271,300 two years ago.

Last year, the diocese showed a modest surplus, because of a $1 million donation from an anonymous donor.

Officials credited the deficit reduction over the years to closer scrutiny of operational costs and, to a degree, employee attrition.

The shortfall in last year's budget was from deficits in the following accounts: Central Catholic Schools ($251,042); The Catholic Free Press ($45,643); the Diocesan Expansion Fund ($99,782); the Priests' Retirement Fund ($224,344), and the diocesan cemetery system ($269,923).

Officials noted that the schools deficit was balanced with an infusion of money from the 2005 Partners in Charity campaign.

Meanwhile, Bishop McManus expressed concern about the financial health of the Free Press, with the report noting that the weekly newspaper's deficit grew substantially from the $12,900 operating loss the previous fiscal year.

Officials said the newspaper is losing readership because local Catholics are depending on other media for relevant information.

"The effectiveness of the newspaper in communicating with the Catholic community of the Diocese of Worcester needs our serious study," said Bishop McManus.

The cemetery system losses, officials said, were due, in large part, to capital improvements to a dozen cemeteries previously run by parishes. Officials said they're hoping the improvements will increase interest among individuals looking to purchase burial lots.

The Priests' Retirement Fund also continued to operate at a deficit, because of factors including costs involved with assisted living and medical services for in-rectory care.

Officials also said several actions were taken to stem losses at the Diocesan Expansion Fund, which acts like a bank in offering loans to parishes. Those actions prompted the fund to operate within budget with a surplus in the first quarter of the current fiscal year.

Bishop McManus also expressed concern about the "significant" interest expenses to the diocesan Central Administration account that had been incurred from past deficits and from unpaid bills to parishes for contracted services.

Mr. Delisle explained that budgets are drawn up by staff from the Fiscal Affairs Office and then reviewed by the Finance Committee before being approved by the bishop.

"We look back at our last fiscal year and we thank God for all that has been accomplished," said Bishop McManus. "We look at our current fiscal year with confidence that we shall live within our budget. With God's all-sufficient grace, we will continue our efforts to build a strong fiscal foundation for the future as we carry on the mission of the Catholic Church here in the Diocese of Worcester."



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