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Safeguards and transparency
Important measures in the financial operations of the church

Sept. 5, 2012

By Bishop Terry R. LaValley

Over the past few years, the national media has reported stories of fraud and embezzlement of funds in the Catholic Church, both nationally and internationally. In some instances, the numbers are staggering.  In response to this criminal activity, in 2007 the United States Conference of Catholic Bishops issued a communication to all the bishops in the United States which recommended the implementation of “best practices” in parish financial governance. 

The Diocese of Ogdensburg has not been immune from fiscal misappropriation, although claims filed with the Diocese’s insurance office have been more modest than those reported nationally.  Since the year 2000, the Diocese has paid seven claims, ranging from $88 to $25,000, for instances of stolen BINGO receipts, stolen Sunday collection, and alleged employee theft.

Canon law assigns the diocesan bishop with the ultimate responsibility for the administration of Church goods in a diocese, including the oversight of a pastor’s direct administration of the temporal goods of his parish (Canons 1276, 1284).  This is a responsibility that I take very seriously.

The Diocese of Ogdensburg has been proactive over many years in providing support to pastors in their canonical responsibility to administer the temporal goods of his parish.  These responsibilities include:
• Protection of owned assets
• Keeping well organized books of receipts and disbursements
• Observance of both canon and civil law
• Preparation of a year-end report of administration

An important action taken by the Diocese in providing support of financial operations in parishes occurred in 1998, when the Office of Parish Administrative Services (now titled the Office of Parish Audit & Financial Support Services) was established.  Mr. Vincent Thouin was hired as the office’s coordinator at that time. He continues to perform excellent work for the Diocese of Ogdensburg in this role today.

Since this office was established, we:
1.Moved to using the same accounting platform (QuickBooks) in all parishes in the Diocese;
2.Provide training and resource handbooks to parish bookkeepers;
3.Conduct audits of the financial operations in our parishes; and
4.Published and distributed the Diocese’s Parish Financial Manual.

The conducting of parish audits has proven to be a great source of support for pastors and bookkeepers. Upon completion of a parish audit, the Diocesan Fiscal Office issues a report which includes findings of weaknesses in financial operations, if any, and recommendations to take steps to address weaknesses cited. Pastors and bookkeepers have expressed much appreciation over the years for the advice provided by a parish audit.
A key element in a parish audit is a review of the internal controls in place to minimize fraud and theft, particularly as it relates to the receipt and disbursement of funds so generously provided by parishioners and friends in each parish.

The Diocese of Ogdensburg asks parishes to use certain procedures to safeguard the weekend collections taken during Mass, such as the use of tamper evident bundle bags, 2 person count teams that are scheduled on a rotating basis, and having someone other than the bookkeeper transmit the deposit to the bank.

Canon law requires each parish to have a Finance Council, which under our Diocesan policy, sees its members selected by the pastor. The parish Finance Council is a consultative group of lay parishioners whose role is to help the pastor in his administration of the temporal goods of the parish. This Council should meet a minimum of two times each year: at the time of budget preparation for the parish and to review the annual parish Financial Report.

Details about the organization of the parish Finance Council and its responsibilities can be found in the Diocese of Ogdensburg’s Pastoral Handbook and the Parish Financial Manual.

By-laws of the parish corporation require the pastor to submit annually to me on or before the 15th of August a Financial Report showing revenue and expense of the parish for the prior fiscal year. This report must be reviewed and signed by the pastor and trustees prior to its submission to the Diocese.

The Diocese reviews the report and, if needed, follows up with the pastor or bookkeeper to clarify certain information in the report. The pastor is also responsible for making a year-end financial report of revenue and expenditures available for review by his parish community by September 30 each year. The pastor is encouraged to offer commentary on this report in written form and/or by discussion with parishioners at the weekend Masses.

While it is important that parish communities be informed of their local parish finances, I find it equally important to share with the Diocesan community information about finances of the Diocesan central offices, especially since much of the financial support of these offices is provided through your generosity through parish assessments and the annual Bishop’s Fund Appeal.

Finances of the Diocesan central offices are audited annually by an independent auditor recommended to me by the Diocesan Finance Council. The audit is very comprehensive.  Our auditors work at the central office campus over four weeks each year. The audit report is published in its entirety in the North Country Catholic annually. I am pleased that for the past several years the auditors have issued an unqualified opinion in the audit report.  This means that the financial statements published by management in the report fairly represent the financial position of the Diocese.  This is the best opinion an auditor can issue in the audit report. The audit report is also posted on the Diocesan website.

Additionally, each spring the Diocese of Ogdensburg publishes in the North Country Catholic its Report on Special Funds. This statement provides additional detail about the financial condition of programs such as the Retirement Plan for Priests, the Lay Employees’ Retirement Plan, the Diocese’s Deposit & Loan Fund and the Diocesan Trust Fund.

Canon law requires the bishop to appoint a Diocesan Finance Council, which serves in much the same way as a Parish Finance Council. The Diocesan Finance Council meets twice a year, one meeting to review the central office budget prepared by management for the next fiscal year, the other meeting to review the annual audit report prior to its submission to the Archdiocese of New York. At these meetings, the Diocesan Fiscal Officer also shares information to Council members about various diocesan programs as well as the latest reports on investments as reviewed by the Diocese’s Investment Advisory Committee.

As you can see, the Diocese of Ogdensburg and our parishes make every effort to protect the assets you so generously entrust to us. With the assistance from Catholics throughout our North Country who serve on our parish and diocesan Finance Councils, our pastors and your bishop receive sound advice to aid in our administration of the temporal goods of the parish and Diocese.

We make every effort to communicate to you on an annual basis the results of financial operations of our parishes and the diocesan central offices so that you can be assured we are using your financial support wisely for the needs of the Church.  I am so grateful to Mr. Michael Tooley and his staff, as well as our pastors and parish Finance Councils, for their fine efforts in helping to safeguard what we have been given and managing it in such a competent, transparent fashion. 

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