Archdiocese to implement new parish audit procedures

BRIGHTON — Chancellor David Smith has announced that, beginning this July, the finances of each parish in the archdiocese will be audited once every three years and annual financial reports to parishioners will be standardized. Currently, routine parish audits are only conducted when there has been a change of pastors.

Since his arrival in Boston, one of Archbishop O’Malley’s main concerns has been the need for financial integrity across the archdiocese and in the parishes. “He wanted to accomplish full transparency at the parish level,” Smith said.

However, the plans for these archdiocese-wide audits temporarily were placed on hold during reconfiguration because of the need to audit each closing parish, he added.

The three-year audit cycles, expected to begin next July, will go beyond simply determining how much cash was taken in during the year and whether it was spent appropriately. They will also analyze the ongoing process control, counting procedures and the parish finance council, Smith said.

The archbishop also wants to standardize annual parish financial and budget reports Smith said. Parishes are already required by Church law to make annual financial disclosures to parishioners. Currently, in the Archdiocese of Boston, there is no rule spelling out what information needs to be disclosed or what form that information should take.

“Many parishes do absolutely marvelous, in-detail and full financial reporting. Sometimes the laity are involved in giving an annual report,” said Smith. “At other parishes, there is far less than what would be desirable, and that’s not where we need to be. We need to be in a position where every parish discloses its budget, discloses its financial statements and we’re going to provide a formula for that.”

An outline detailing this plan was presented to the archdiocese’s Presbyteral Council last January. A new parish manual for the reports is expected to be issued on July 1, he said.

Smith said that the new procedures have been planned for months and were not being implemented in response to two allegations of parish financial mismanagement which recently made headlines in the Boston Herald.

In response to those allegations Smith said that with archdiocesan investigations into both parishes nearing an end, there is no sign of any wrong-doing in either case.

“We’re fairly certain that there is nothing,” Smith said. “We intend to, and we will, go back in each and every case to the people who raised the complaints and respond to them once we have completed our own internal research and talked to all who may have been involved.”

“Anything we find that is criminal or potentially criminal in nature, self-enrichment kinds of things, will certainly be reported,” Smith added. “If we find any self-enrichment out of parish funds, number one we recover it and that effort will be followed up by a subsequent reporting to the Attorney General’s office.”

According to Smith, since Archbishop O’Malley was appointed, the archdiocese has received five complaints alleging financial improprieties at parishes, Smith said. Four of those came after the parishes were named for closure in reconfiguration.

The archdiocese has found no credible allegations in the letters, but it has nevertheless decided to bring all the allegations to the attention of the Attorney General’s Office.

“We will take them through each of the five complaints and our analysis of them,” he said.

Smith also said that the attorney general would be informed of all future allegations. “Anytime we get a complaint letter from now on, after our analysis and research is done, we will go to the attorney general and then go back to the people [who made the allegation].”

Smith said it is important to take these situations within the scope of the archdiocese, adding that these problems are not the norm in parishes. Most audits simply discover “issues with processing control that need to be brought to the pastor’s attention.”

“It is not at all uncommon to find that the same two people count the offertory every week in a parish. That’s a very bad practice,” Smith said. “The audit process is a constant process of improvement. That’s what they’re designed to do.”

With each parish having three or four Masses every weekend and different parishioners taking up the collection and counting the money, there are 15 to 20 people handling funds in each parish every Sunday, he said.

“You’d be naïve to think in a business where 300 plus parishes are operating every week receiving cash contributions that there’s never a problem,” he continued.

Archbishop O’Malley hopes to continue improving the auditing process, as he has since his installation, said Smith.

Full disclosure will help the archdiocese, parishes and pastors, Smith said. Finance councils will become more vital since they need to do a comprehensive budget and financial report.

“The majority of pastors today are having trouble paying their bills. They want a finance council. They want active involvement because they can’t make it work without help,” he said.

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