Report of the Parish Reconfiguration Fund Oversight Committee, a committee of Catholic lay people established by the archbishop to review, make recommendations and report to the parishioners of the archdiocese on the financial transactions associated with the closing of parishes.

April 1, 2005

To all members of the Archdiocese of Boston,

Chancellor David Smith published his first report on Parish Reconfiguration finances in The Pilot on February 25, 2005.  His updated “Statement of Activities” (“Statement”) for the Parish Reconfiguration Fund accompanies our report today. The publishing of this Statement is an excellent and appropriate step by the archdiocese because this disclosure makes diocesan finances more transparent and understandable to its parishioners.

One of our committee’s tasks is to assess independently on behalf of all parishioners whether the archdiocese is fulfilling its commitment to use money generated by the closing of parishes “only to help parishes with past, present, and future obligations and programs.” We offer the following comments on the Chancellor’s updated Statement of Activities shown on this page:

(1) All line items on the Statement on this page are consistent with the above-mentioned archdiocesan commitment. But we wish to discuss below one line item entitled “Support of on-going parish operations.”

(2) The accompanying Statement as well as the February report disclose that each month $604,156 of closed parish money is being used for “Support of on-going parish operations.” This money from closed parishes is allocated to support or “cover” what would otherwise be a deficit in the operating budget of the Central Fund (loosely, “chancery operations”) of the archdiocese.

(3) We agree that the use of this money to support ongoing parish operations is technically consistent with the commitment the archdiocese has made. However, we consider it bad practice and therefore inappropriate to use money from the sale of closed parishes to pay for expenses in an annual operating budget. We should expect that the assets of closed parishes will produce a benefit of more enduring value than simply covering a budget deficit. We have been informed that the archdiocese plans to eliminate the use of parish reconfiguration funds to pay for the “Support of on-going parish operations,” but that such use is likely to continue for an additional year.

(4) The footnote to the Chancellor’s Statement discloses the specific expense categories included in “Support of on-going parish operations” but not the amounts for each. The specific amounts should also be disclosed. Based on our review of the specific expense items included in “Support of on-going parish operations,” we believe that the archdiocese should continue and most parishioners would support the continuation of most of these activities, especially if accompanied by a timely and intensive review of budgeted expenses and revenues. Such a review is planned but has not yet taken place

We have made a number of recommendations to Archbishop O’Malley, Bishop Lennon and Chancellor Smith regarding the financial statements and transactions we have reviewed prior to the publication of the Chancellor’s report in The Pilot at the end of February. Some of our recommendations were accepted; some were not.

On a separate subject and although our reviews are limited to financial transactions related strictly to the Parish Reconfiguration Fund, we are pleased to report that we have not found any evidence in any of our reviews that reconfiguration funds are being used to pay litigation or settlement costs.

Our committee continues to meet regularly with Bishop Lennon, the Chancellor and his staff to obtain more financial information in a form that can be readily understood. We will continue to work with archdiocesan officials to obtain the information we need to review the financial records and provide you with our independent oversight.

Submitted by:

David Castaldi, Norman Sabbey, Maureen Corcoran, Kathleen Rabe, Nan-Marie Jaeger, Timothy Schiavoni