Diocese of Providence optimistic about state of finances following audit report

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PROVIDENCE — With a record year in its 2016 Catholic Charity Appeal — in which the Diocese of Providence reached an all-time high of $8 million in pledges and donations — and greater efficiencies being achieved through an ongoing internal reorganization — diocesan officials are optimistic going forward that the 2016/2017 fiscal year holds much promise.

In addition to hitting a record mark, the Appeal also brought in 3,500 new donors to the annual campaign which provides support for numerous diocesan outreach ministries. This influx of new donors reversed what had been a troubling trend in the decline of donors through the years.

In its audit report of the Central Administration Funds and Diocesan Cemetery Operations within the diocese for the fiscal year ending June 30, 2016, the independent C.P.A. firm Mayer Hoffman McCann P.C. notes that through increased parish budget collections an additional $120,000 of parish assessment funds have flowed into the Diocesan General Fund, for a total of $3,286,261.

According to Michael F. Sabatino, diocesan chief financial officer, the parish weekly budget collections are up 3.5 percent, totaling $42 million.

Operational expenses for both the General and Catholic Charity Funds as of June 30, 2016 were $13,213,466, compared to $12,774,104 as of June 30, 2015, representing an increase of 3.4 percent or $439,362.

Although the diocese reported a flat return on its overall investment portfolio for the previous fiscal year, the first three months of the new fiscal year produced a return of 3.6 percent.

“As we move forward the 2016/2017 fiscal year holds much promise for us,” Bishop Thomas J. Tobin said, pointing to the continued brightening economy and the positive result the stock market is having on the diocese’s investment portfolio. He also expressed optimism over an innovative marketing campaign in place for the 2017 Catholic Charity Appeal, leading to hope for another banner year for the campaign which helps to support numerous ministries that depend upon it for budgetary support.

“The Diocese of Providence will continue to do our best to be careful stewards of the diocesan resources by relying on the providence of God, on the guidance and support we get from our many advisory committees, on the leadership of our pastors and on the outstanding generosity of the lay faithful.”

Rev. Msgr. Raymond B. Bastia, diocesan Vicar of Finance, said that even after offering modest increases in lay wages and other employee benefits the diocese was able to maintain level spending in comparison to the previous year.

The Vicar said that the diocese has completed a three-year transition to a new formula for internal assessment that has helped to provide a more consistent and more equitable revenue stream for its General Fund and its Catholic School tuition assistance program.

“This new formula has begun to have a positive effect on internal outstanding parish accounts payable for our coordinated benefit programs and services,” Msgr. Bastia said. “Due to our continued financial disciplines our major operating funds performed adequately in a very challenging 12-month investment market.”

“What we’ve been developing seems to be working,” Msgr. Bastia said, noting that through the generous assistance provided by many volunteer committees and the efforts of diocesan staff a careful watch is kept on the diocese’s valued but limited reserves.

He cautions, however, that despite the positive results outlined in the annual audit, many practical challenges loom ahead.

A significant number of parishes and diocesan buildings are aging and falling into disrepair. In some cases parish or diocesan revenues might not be sufficient to meet the anticipated costs of upgrading and maintaining these facilities.

“While we need not obsess about these things, we do have to be prudent as we look forward,” Msgr. Bastia said.

Another positive result noted in the report is that the diocese continues to steadily chip away at its line of credit, which more than 15 years ago topped $18 million.

Through the sale of diocesan property over the past few years, the diocese has managed to reduce its line of credit by $1.4 million to $1,194,000.

“We had some additional income come in as installment payments from the sale of property in previous years and we were able to pay off $1.4 million, which is great,” said Sabatino.

“This was all from the sale of non-ministerial properties,” he said.