The Gospel reading from yesterday, Luke 16:10, said, “The person who is trustworthy in very small matters is also trustworthy in great ones; and the person who is dishonest in very small matters is also dishonest in great ones.” By coincidence, we will explore this reading in a real-world situation below.
Q. If something costs you $1.1 million one year and $1.4 million the next year, has the cost increased or decreased year to year?
A. The cost has decreased–that is, if you are paid $250,000/year to run finance for the Archdiocese of Boston and issue the annual report a year after the fiscal year has closed.
Read on to see how the Gospel reading and the Q&A might coincidentally be related.
Events of last week brought out much of what is good happening in Boston Archdiocese, as one commenter (“Catholic School Advocate“) observed on our last post. But, unfortunately, our most recent posts and the associated flood of comments and emails also brought out much of what is holding back or even threatening the archdiocese from being able to continue its good works. First the good, then the not-so-good.
The good. The Daughters of St. Paul event to raise money for evangelization, and a challenge from an anonymous donor who offered $100,000 if the Daughters can match his/her donation by the end of 2010. The ordination of two new auxiliary bishops, Bishop Arthur Kennedy and Bishop Peter Uglietto. The Priest Appreciation Dinner on Thursday evening. The “shout outs” of appreciation to more than 70 priests on this blog. This Wednesday, September 22 is an under-publicized garden party fund-raiser to raise scholarship monies for seminarians studying at Blessed John XXIII Seminary in Weston.
Now the not-so-good. Read Lending Money: Part 2, and check out some of the comments, especially this one that talks about the failed promises of the 2010 Initiative, and this one, which talks about how the leadership of the archdiocese, Cardinal O’Malley in particular, could become even further beholden to certain large donors if the role of a new secretary for development goes, as expected, to yet another crony of Jack Connors. Even more not-so-good comes as we touch on topics that concern managing money and moving money around.
Yesterday’s Boston Globe article about the exhausted appeals and parish vigils at closed/suppressed churches prompted a number of readers to ask us exactly how much money has been spent maintaining closed churches. We went to the “transparent” annual reports from the archdiocese from recent years transparently found on the finance website and here is what we found. The sum total between 2005-2009 appears to be in the range of $9-10 million dollars. And, someone responsible for the annual reports would benefit from having someone else proofread the report for “fuzzy math” errors before it is published, or maybe even within 1-2 years after it is published.
Here is what the audited annual reports show for Reconfiguration Operation Expense. Some of this is no doubt administrative, but most of it is the heating, cooling, electrical, taxes, snow removal and other facilities-related expenses associated with the closed parishes:
If we look at the 2007 and 2008 reports, there is a place in the notes where the exact amount is detailed. P. 14 of the 2007 report says the amount was $1.1 million, and page 29 of the 2008 report says it was $1.4 million, so we feel comfortable deriving from the archdiocese’s own audited numbers that the total is somewhere in the range of $9-10 million. Anybody else curious as to where that $9-10 million came from to pay those bills?
Besides that, there is the matter of why 2009 increased instead of decreased if reconfiguration is winding down. And why is there an explanation of the expense in the 2007 and 2008 reports, but no explanation in 2009 whatsoever, let alone for the increase in the expense? Then there is the “fuzzy math” error.
The 2007 report says “The $1.1 million or 39% decrease in expenses in 2007 is a reflection in the reduction of the number of properties being maintained as the reconfiguration process nears an end.” (see below, click to enlarge)
Does anyone else wonder how you can spend $1.4 million for something in 2008 vs $1.1 million for the same something in 2007 and communicate it as a 23% DECREASE in expense? Does anyone feel the statement that reconfiguration expenses decreased is an “unfounded claim.” In fact, by my math, it works out to be a 27% INCREASE. Now, I do not profess to have the accounting or financial management skills of a $250,000/year Chancellor and former president of a bank sold for $1 billion. I do not claim to have the skills of a highly-paid audit firm. Math was, shall I say, never exactly my strongest subject in school. Yet, one cannot help but wonder if they cannot get correct something as simple as conveying the difference between an expense increasing vs decreasing from year to year in telling us about the financial condition of the diocese, what else are they getting wrong or communicating in a deceptive way?
Maybe it was a typo or an honest error–people are not perfect. Maybe it was an inadvertent omission that the detail in the notes about reconfiguration costs that appeared in the two previous years is inexplicably absent in the 2009 financials. Yet, oddly, this minor problem with communicating a decrease vs an increase and a number in the explanation consistent with the audited report is found not by the $250K/year Chancellor, who along with his staff cost an estimated $1.6M per year in salaries. Instead it is found by the anonymous blogger trying to simply add up year-to-year total reconfiguration costs to serve the needs of the blog readers, who feel they have nowhere to turn in the archdiocese for a straight answer without fear of repercussions. Critics of this blog will call it a nit or say it is “absurd” that the blog is complaining about an error in the financial report like this. Yes, it may be a small thing. So be it. We simply will prayerfully ponder the passage from Luke 16:10: “The person who is trustworthy in very small matters is also trustworthy in great ones; and the person who is dishonest in very small matters is also dishonest in great ones.”
Besides that, why did the expense go up in 2009 if the reconfiguration process is nearing an end? And what was it in 2010?
The bigger issue which came up in the last post and the associated comments regarding whether it is permissible to take parish funds from Reconfiguration, move them to the Revolving Loan Fund, and then revolve them out to the Campaign for Catholic Schools will be taken up again in the next post.