Study finds no misuse of Clergy Fund

BRAINTREE -- A study released late last month confirmed what the archdiocese has been telling priests for some time now -- that no money has been misappropriated from the funds that provides for priests’ healthcare and retirement.

The 47-page study, conducted by the accounting firm Alexander, Aronson and Finning (AAF) concluded that “we did not identify any use of Clergy Benefits Trusts funds that were outside the scope of benefits and related costs covered by the trust agreements or any diversion of funds.”

According to Father Richard Erikson, Moderator of the Curia, the study was launched in order to address the “misinformation, rumor and speculation” circulating among many of the priests of the archdiocese regarding the ailing Clergy Benefits Trust.

“Any questions that were outstanding prior to the study have been answered in the study,” he said, adding that the results “put to rest those rumors that the Clergy Fund had been mishandled.”

The study, which looked at the Clergy Benefits Trusts from its inception in 1972, found that financial trouble began in earnest in 2000, when a host of factors caused the fund to lose $79.4 million.

The first of these was a “significant increase” in priests’ dental, room and board benefits, including coverage for assisted living facilities and nursing homes. Because of the increase in benefits, the report stated, “expenses over the last eight fiscal years represents 52 percent of the total expenses over the last 37 years.”

“In addition to the added benefits, the Clergy Benefits Trusts have experienced a drain of resources due to an aging population of priests and the rising cost of health care,” it continued.

Another factor was the fund’s purchase of Regina Cleri, the archdiocese’s retirement facility for priests, for over $10 million. Both of those, coupled with $15.8 million paid out for priests placed on administrative leave due to sexual misconduct caused the fund to experience, “a decline in liquid net assets available for the retirement, medical and other financial needs of the priests of the archdiocese” but noted that none of the moneys spent were, “outside the scope of benefits and related costs covered by the trust agreements or any diversion of funds.”

The report also addressed specific questions posed by members of the presbyterate, suspicions that money had been used from the Clergy Benefits Trusts to pay for settlements of sexual misconduct.

The report found no evidence of that.

“We did not note any disbursements for items we tested which appear to have been used for settlements of allegations of misconduct,” the report read.

According to Father Erikson, the report was sent to every priest of the archdiocese. In addition, Joel Aronson, vice-president of AAF held three separate meetings with priests, “in order to answer any unanswered questions.”

Because he attended all of the meetings, Father Erikson was able to ask those in attendance if they were satisfied with the findings of the study.

“In each of the meetings, everyone I spoke with indicated he was satisfied, which is very good,” he said.

Father Erikson also commended Aronson for his “mastery” of the details of the funds, adding that he hopes that “we can now move forward with confidence in the funds, and trust that we are all in this together.”

According to Father Erikson, “it’s not an ‘us versus them’ situation, and as such we are in a much better position because we are united.”

Plans are currently underway to curb the expenses of the Clergy Benefits Trusts funds as well as to raise revenue.

In a recent letter addressed to every priest of the archdiocese, Chancellor James McDonough warned that, “If not addressed, the Funds will run out of money in 2011.”

In order to raise more revenue, the archdiocese added a second annual collection for the Clergy Funds in June.

“We were very encouraged by the generosity of the people,” Father Erikson said, noting that the money collected was, “significantly over” the goal. A fundraiser is also being planned for the fall and the Cardinal’s Christmas Campaign this year will be on behalf of the Clergy Funds.

“My expectation is that all of these will be successful,” Father Erikson said.

“The basic problem has been that operationally the Clergy Fund has been spending more than they are taking in,” explained Joe D’Arrigo, a consultant hired by the archdiocese to repair the Clergy Benefits Trusts funds.

“Our main mission is to stabilize the clergy fund and make sure it is sustainable in the coming years,” D’Arrigo added.

D’Arrigo, together with 8 members of the presbyterate have created a policy-making committee, which has looked at the spending and is trying to address each of the individual issues beleaguering the fund.

According to D’Arrigo, the committee develops potential policy changes, then presents those findings to the Archdiocesan Presbyteral Council, who add their input in the changes. These findings are then presented by Cardinal Seán P. O’Malley for approval. If approved, Cardinal O’Malley then promulgates the changes.

To date, the cardinal has promulgated one major change, D’Arrigo said.

Priests placed on administrative leave for reasons other than retirement are no longer paid out of the Clergy Funds; they are supported by a separate fund created with money from the sale of the chancery in Brighton.

Other changes are being looked at as well.

According to Msgr. Dennis Sheehan, a member of the policy committee for the Clergy Funds, priests living in assisted living facilities or nursing homes other than Regina Cleri are being asked to apply for Medicare to help pay their expenses. In addition, any priest living in an assisted living facility or nursing home other than Regina Cleri may be asked to use their stipend to pay for their expenses.

Msgr. Sheehan stressed that these changes are still in draft form.

“If and when the Cardinal approves it, then the changes will be promulgated,” he said.

Msgr. Sheehan noted that, “some priests are nervous about the changes, but others are taking it in stride.”

“Me, personally, I have no problem with the changes,” he added.

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