While we await word of how and when the Archdiocese of Boston is going to address six years of mismanagement of the “Invisible Vigils“ at closed parishes and reduce excessive 6-figure salaries that together are costing donors and parishes somewhere in the range of $1 to $2M a year unnecessarily, we thought we would share some other details of how the archdiocese spends money and manages the budget. (If you have not read the comments on our last post, do take a moment to check those out).
We have spent a fair amount of time trying to understand the archdiocesan budgeting process. Even with our own deep knowledge of how things work at 66 Brooks Drive, network of helpful contacts, and consultations with people expert in finance, we just cannot understand how Chancellor McDonough comes up with some of these numbers.
Today we start with the 2010 budget because that has been out there in public for a while and has the greatest level of detail explaining how things work, sort of. It came out as part of the Improved Financial Relationship Model, whereby the patchwork of fees imposed on parishes to fund Central Ministries is supposed to be revised and replaced by a flat “tax” of 18% on parishes instead of all kinds of fees. You will find the 26-page 2010 Central Ministries Budget here.
Here are a few highlights, just to get you thinking.
- To give credit where credit is due, it is a very comprehensive document–much moreso than we have seen other dioceses publish.
- There are two main sources of “revenue” as described the budget: 1) “Non-Program” Sources of $18.3M, such as the Annual Catholic Appeal, other donations and collections, interest and dividends, restricted funds, a one-time transfer from insurance funds and 2) Central Ministries fees of $15.9M. The latter is where the accounting gymnastics are most difficult to understand.
- The 2010 budget of $34,260,000 was balanced–but only because the Chancellor tapped $1.4 million in insurance funds in order to balance it. One can do that for only so long until one depletes assets to draw down that were intended for other purposes. We understand the insurance fund reserves may have approached that depletion point.
- The new Office of Professional Responsibility headed by Mark Dunderdale, another South Shore resident, was funded with $1 million.
- There is no apparent provision in the budget for allocating funds each year to pay off the $41 million owed to St. Johns Seminary for their property sold to Boston College, including $4.8M due in January of 2011. The absence of any budgetary allocation for that repayment suggests that the only way to raise that money would be for the archdiocese to sell off other assets.
- “Administrative Services” somehow generates revenue and fees of $6.3 million to offset the $10.2M they spend.
- “Administrative Services” and “General/Outside Counsel” accounted for 1/3 of all Central Ministries expenditures.
Here you can see the overall Central Ministries budget with expected “Non-Program” sources of revenue at the top. In the bottom half, you see the Central Ministries expected ”revenues” from various fees in the first column, expense in the second column, and “net” cost in the third column. (Click on the image to enlarge, or you can see p.6 of the full document here.)
Though it is easy to see how an entity like Pilot Publishing Group raises revenue through subscriptions and advertising, it is not so straightforward to see how a group like “Administrative Services” raises revenue of $6.3 million. We will share our best understanding of how they do this through a variety of service fees to parishes and related entities in a separate post, as well as more details of the other areas.
Lastly for today, we take the 2010 budget document one step further and give you our own exclusive 3-D pie-chart showing the percentage of expenses allocated to each area. (click chart to enlarge)
All we did was enter the amounts from the above table and then generate a pie-chart. It shows for the 2010 fiscal year that 33% of the $34.2M budget was spent on the combination of the Chancellor’s ‘s fiefdom (“Administrative Services” in green at the bottom left) and General Counsel/Legal expenses (purple slice to the left of Administrative Services), plus another 3% on Professional Responsibility and Oversight. At the same time only 12% was spent on advancing the mission of the church in Faith Formation and Evangelization (dark red at top right). With the Catholics Come Home initiative, we hear that evangelization has gotten some more funding in the 2011 budget, but this is how the proverbial cookie crumbled in 2010.
Anything look wrong or out-of-balance in this picture to you?