DIOCESAN FINANCE UPDATE Diocese of St. Petersburg

January 15, 2014

Bishop Lynch

Opening Remarks

Phil SignoreExecutive Director, Finance

Tonight’s Agenda:

Diocesan Financial Update Financial Position Results of Operations Forward in Faith

Parish Finance Councils Primary Responsibilities Current Issues

Nancy RidenourChair, Diocesan Finance Council

Diocesan Financial Update:

Financial Position Results of Operations

Audited Financial Statements are available online at www.dosp.org by clicking on:

OfficesFinanceAnnual Audits quick link

Financial Position ($000)6/30/2013 6/30/2012

Assets:Cash $ 834 $ 3,076 Investments Held in Trust 100,600 92,645 Receivables 24,385 23,010 Land, Buildings, and Equipment, Net 38,759 39,547 Other Assets 2,446 2,677 Total Assets $ 167,024 $ 160,955

Liabilities:Payables $ 6,682 $ 10,545 Bank Debt 8,720 9,271 Deposits Held in Trust 79,999 72,485 Reserves for Insurance Claims 4,165 4,213 Total Liabilities 99,566 96,514

Net Assets:Unrestricted 47,826 44,786 Temporarily Restricted 9,791 9,837 Permanently Restricted 9,841 9,818 Total Net Assets 67,458 64,441 Total Liabilities and Net Assets $ 167,024 $ 160,955

Results of Operations ($000)Year Ended Year Ended

6/30/2013 6/30/2012

Annual Pastoral Appeal & School Assessments $ 13,209 $ 12,046

Contributions and Bequests 878 1,407

Insurance Premium Revenue 21,593 21,415

Earnings on Investments & Loans 8,112 857

Fees, Sales, and Program Revenues 5,101 4,710

Gain on Sale of Land 155 3,716

Total Support and Revenue 49,048 44,151

Ministry Expenses 9,844 16,104

Catholic Formation & Education 4,494 3,732

Social Services 1,055 1,130

Clergy Development 2,180 2,303

Parochial Services 1,081 1,043

Insurance Programs 22,957 23,938

Other Program Services 2,956 1,906

Total Program Services 44,567 50,156

Diocesan Administration 1,464 1,244

Total Expenses 46,031 51,400

Change in Net Assets $ 3,017 $ (7,249)

Diocesan Savings & LoanResults of Operations ($000)

Year Ended Year Ended6/30/2013 6/30/2012

Investment Income $ 6,341 $ 96 Interest Received on Loans 733 919

Total Support and Revenue 7,074 1,015

Interest Paid on Deposits 1,213 1,158 Interest Paid on Bank Debt 75 77 Operating Expenses 463 475

Provision for Loan Losses 329 (165)Total Program Services Costs 2,080 1,545

Change in Net Assets 4,994 (530)

Net Assets, Beginning of Year 807 1,337

Net Assets, End of Year $ 5,801 $ 807

Diocesan Insurance & Benefits TrustResults of Operations ($000)

Year Ended Year Ended6/30/2013 6/30/2012

Insurance Premium Revenue $ 23,337 $ 23,092 Investment Income 174 159

Total Support and Revenue 23,511 23,251

Insurance Claims Expense 15,725 15,287 Insurance Premium Expense 4,877 4,936 Other Operating Expenses 2,081 1,963 Provision for Doubtful Accounts 354 1,544

Total Program Services Costs 23,037 23,730

Change in Net Assets 474 (479)

Net Assets, Beginning of Year 8,774 9,253

Net Assets, End of Year $ 9,248 $ 8,774

FORWARD IN FAITH

FRANK MURPHYSECRETARY FOR CHRISTIAN SERVICE

The Campaign will address vital, and in some cases long-postponed, capital and programmatic needs, including:

Catholic Education: $29 Million Seminarian and Retired Priest Support: $ 8

Million Parish Needs: $10 Million Campaign Costs: $ 3

Million

For with God nothing shall be impossible. (Luke 1:37)

58%16%

20%6%

Catholic Education Seminarian and Retired Priest Support Parish Needs

Campaign Costs

Forward in Faith: $50 Million Campaign

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Forward in Faith: Parish Needs of $10 Million

Individual parish needs will be addressed through this campaign. Block 1 Parishes have developed cases for support around a variety of capital and programmatic needs, including:

Expanding faith formation programs for parishioners

Repaving church parking lot Replacing or restoring parish center roof Supplementing tuition assistance available

through the parish Construction of a memorial prayer garden

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Forward in Faith: Block 2

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April May-July August-October

Block 2 Kickoff Meeting

Date TBD

During this meeting we will review the campaign plan and processes in greater detail.

Campaign Preparation

Changing Our World campaign directors will meet with all block 2 parishes to prepare for the active phase of the campaign. Activities will include:• Assembling parish

leadership teams;• Review and approve

parish rosters;• Developing parish

case elements; and,• Approve all

campaign communication materials.

Campaign Implementation

Changing Our World directors will work closely with parishes to implement the campaign plan.

Forward in Faith: Our Progress

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Bishop’s Leadership Phase Pledges $ 3,132,146

Block 1 Parish Phase Pledges $ 9,691,565

Block 2 Parish Phase Pledges $ 5,275

Option C Pledges $ 1,106,993

Total Pledged to Date $13,935,979

Phil SignoreExecutive Director, Finance

Parish Finance Councils• Primary Responsibilities• Current Issues

Diocesan Norms for Parish Finance Councils Composition of Parish Finance Councils (in addition to

pastor):

• Fewer than 500 families: at least 3 members.

• 500 to 1500 families: at least 5 members.

• More than 1500 families: at least 7 members.

Members must be:• Qualified in finances and/or business.

• Registered parishioners, and not employees.

Acts of extraordinary administration (Real estate transactions, legal actions, acceptance of non-cash gifts such as securities or ownership interests, any transaction > $40,000). Pastors shall:

• Consult the Parish Finance Council.

• Petition the Bishop.

At least four meetings annually with written minutes (financially challenged entities must meet monthly).

Diocesan Norms (continued)

Provide advice and assistance to pastor regarding: Financial reports to bishop. Budgets (must approve budgets for financially challenged entities). Annual reports to parishioners. Acquisitions & sales of land. Financial planning. Incurring & repayment of debt, & resolution of unpaid debts &

budget deficits. Educating parishioners on financial stewardship. Personnel administration, staffing needs, salary scales. Tax compliance and regulatory matters. Transactions > $25,000 and leases > one year.

Internal Controls Segregation of duties. Review cash account reconciliations at least

annually. Mandatory vacation and rotation of duties Timeliness of deposits Agreed Upon Procedures Conflicts of Interest

Fundraising & Capital Campaigns

Forward in Faith Capital Campaign:No new parish capital campaigns for 5 yearsExemption available if capital needs exceed 2 ½

times your annual offertory.Option C exemption:

• Parish guarantees 80% of FIF goal• Parish hires own fundraising counsel• Parish produces own materials• Diocesan Campaign Processing Office manages pledge

& remittance program

Gift acceptance Only the Bishop has the authority to accept a bequest. Gifts other than cash, check, or credit/debit card must be

approved in advance by the Bishop’s Office. Examples are gifts in-kind, securities, real estate, ownership interests…

Documentation of donor restrictions must be maintained. Gifts may not be accepted if they:

• Seem to be inappropriate, not in DOSP’s best interest, could damage the reputation of DOSP, or from an illegal or questionable source.

• Create excessive administrative procedures, or obligations.• Create a conflict of interest.

Credit Cards Use of a credit card is a borrowing and should have

the same authorization as a borrowing (pastor approval).

Pastor should always document his approval of credit card bill.

No personal use of church credit cards (cause for disciplinary action up to and including termination).

Liquor Liability

Options for serving liquor: Hosting Selling it or having a vendor sell it Absolutely no BYOB’s by parish, school, or

third party groups.

Please see the Liquor Liability Policy published on the Insurance Office web page.

Schools and Centers

Budgets Tuition rates Teacher contracts/positions/salaries

Other All entities are required to consult with the Finance

Office (Executive Director) before hiring a bookkeeper/accountant, or contracting with an organization to perform bookkeeping, accounting, or other financial functions.

Tonight’s presentation is available online at www.dosp.org by clicking on:

OfficesFinance

Annual Finance Update 1/15/14 quick link

QUESTIONS?