The overall health of the Diocese is based on the health of all its parishes. Parishes are communities made up of some of the most generous people. However, with aging buildings, increasing utility costs, and rising inflation, many parishes are struggling financially. There are currently several parishes that are not able to make ends meet and are subsidized by the Diocese.

From a diocesan-wide perspective, overall collections are one way to gauge the financial health of parishes in this diocese. It is here that the challenges of the past several years are seen. In total, between the fiscal year which ended June 30, 2019 (FY19) and the one which ended June 30, 2021 (FY21) collections have declined by 11.6%. Meanwhile, the people of the Diocese have continued to support the services provided by the Diocese through the Annual Catholic Appeal which amounted to $2.8 million in FY21 and $2.5 million in FY20.

Investment return also contributes to the ability of the Diocese to sustain its mission through the ups and downs of the economy. The Diocese’s endowment spending policy, based on a 12-quarter average of the underlying asset values, provided $2.6 million in each of FY20 and FY21.

Total operating expenses were reduced from $14.0 million in FY20 to $12.0 million in FY21. The accompanying financial statements provide further information regarding these expenses including the amounts spent on program services (grants, cemeteries, education, etc.) and support services. This decrease in expenses reduced the operating deficit from $3.8 million in FY20 to $337 in FY21. It is important to note that one way to determine if an entity is operating efficiently is to look at the increase or decrease in net assets from operations. Having operating losses year over year, with limited resources available is unsustainable. The Diocese continues to look for ways to achieve an operating surplus to better support its programs.

Non-operating income (expense) includes, most significantly, gains and losses from the investment portfolio which is dependent on market conditions from year to year, and the net impact of the Diocese’s self-insurance programs.

The Diocese has completed audits in late spring/early summer for several years. A few factors pushed the timing back by several months. Those factors include the implementation of new accounting software, Covid-19, and changes in staffing. The Diocese plans to add resources so that in subsequent periods, the Diocese will be able to produce audited financial statements in a timelier fashion.

The Financial Statements of the Diocesan Administrative Operations (DAO) include administrative functions of the Diocese like Human Resources, Fiscal Affairs, Facilities and Maintenance, along with parish ministerial functions like the Diaconate, Youth Ministry, Latino Ministry, and Faith Formation offices, to name a few.

The Financial Statements of the Diocesan Administrative Operations do not include parish financial activities. They also do not include parish-managed cemeteries, schools, diocesan-managed schools, and parish ministry activities.

The Diocese continues to address the painful reality of clergy abuse of minors, including spiritual and financial support for victims/survivors. The following amounts for FY21 and FY20 were paid out of the self-insured fund related to settlements, all from cases decades old. However, the Diocese acknowledges that for victims/survivors of clergy abuse the impact of that trauma remains ever present.

2021
Settlements $55,000
Victim Support $175,058
Attorney Fees $183,921
Total $413,979
2020
Settlements $120,000
Victim Support $187,218
Attorney Fees $43,803
Total $351,021

In addition to funds spent on settling past clergy abuse claims, the Diocese remains committed to preventing a future reoccurrence of this painful chapter. As an investment in this important goal, in FY20 the diocese spent 229,373 on Safe Environment programs and services, that figure increased in FY21 to 435,424. This is seen as an investment in assuring that there is minimal chance of a repeat.

Similar to hospitals and universities, the Diocese maintains an endowment to enable it to fulfill its mission through the ups and downs of the economy.

Of the $179.5 million on June 30, 2021, $115.5 million are assets belonging to parishes, schools, and cemeteries that are held by the DAO for safekeeping and investing (“Custodial Accounts”). These amounts are not available to the Diocese to use. The remaining $64 million consists of $54 million in internally designated funds and $10 million in unrestricted investments. So, of the $179.5 million on June 30, 2021, only $10 million is available for the needs of the DAO.

The two main items that make up the difference are, first, a reduction of subsidies to schools that were provided as needed. FY21 needs were significantly reduced as enrollment increased. The second item was a significant software implementation project that was mostly completed in FY20, so the implementation costs were not duplicated in FY21.

This includes expenses related to the diocesan Schools Office and amounted to $1.7 million in FY22. This is mainly salaries, benefits, legal expenses, professional consultants, materials, supplies, and program expenses. This amount also includes a portion of health insurance benefits paid on behalf of all teachers in the diocese. Also included are diocesan financial aid and financial assistance to schools managed by the diocesan school’s office.

This decrease was driven predominately by a reduction in vocations and costs related to having fewer men in the seminary between FY20 and FY21.

In most years approximately 15 to 20% of cost reimbursement invoices to parishes go unpaid (insurance, benefits, and parish assessments). These unpaid balances increase the DAO’s allowance for doubtful accounts. The expense related to these balances differs from year to year based on payments received from parishes.

This can be seen in detail in Footnote #6 of the financial statements.
Here are the major categories and amounts:
Future of Hope Endowments: $16,882,879
School Endowments: $22,626,916
Other School Endowments: $3,638,011
Other Endowments: $2,655,715
Gift Annuities: $11,380

Cathedraticum – The annual Cathedraticum assessment on parishes is utilized to support the administrative functions of the Curia.  This assessment helps to support the following departments and functions including financial services, human resources, the offices of the Bishop and Vicars, the development office, general legal expenses, facilities management, safe environment office, faith formation, youth ministry, diaconate, and various diocesan-wide ministries.

Custodial Funds – As noted in our financial statements Footnote # 1, these assets from parishes, schools, and cemeteries, are held by the DAO for safekeeping and investing. These assets are recorded as a liability on the financial statements as they belong to the parishes, schools, and non-diocesan managed cemeteries that entrusted them to the diocese and are remitted to those organizations upon request for their specified purpose. These assets cannot be used by the Diocese to meet diocesan obligations.

General Education Assessment – The annual General Education Assessment on parishes is used to support Catholic Schools and young adult ministry in the Diocese of Springfield. These funds are used to support the Diocesan School’s Office staff, teacher medical insurance, tuition grants, and educational program expenses.