Render Unto Rome_ The Secret Life of Money in the Catholic Church - Jason Berry [7]
FINANCIAL ACCOUNTABILITY
In a 1985 survey of empirical data, Andrew M. Greeley found that Catholics donated on average $320 per year to the church as opposed to $580 by Protestants. “The decline in Catholic contributions over the last quarter century is the result of a failure in leadership and an alienation of membership,” noted Father Greeley, an esteemed sociologist, “not from the Catholic community or from sacramental participation but from support of the ecclesiastical institution.”28 In the quarter century since that survey, the alienation of Catholics from church leadership has worsened. A 1994 study found that the church lost $1.96 billion a year from “low giving”—what the bishops “could collect annually if Catholics gave at the average rate of all Americans” of other faiths.29 In a 2000 study provocatively titled Why Catholics Don’t Give … and What Can Be Done About It, Professor Charles Zech of Villanova assessed survey data in concluding that Catholics “felt they did not have sufficient influence in Church decision-making, lacked information on how Church funds were spent, and didn’t think denominational leaders were accountable on how contributions were used.”30
As custodians of a religious charity the bishops are under no obligation to produce profit and loss statements for stockholders or the IRS. The distinction mattered little until the battering that many prelates took in the media coverage of the abuse crisis and the spotlight on legal settlements, which raise questions about the use of donations for religious causes. In a shift toward transparency, many bishops now post diocesan financial statements on their Web sites. Jack Ruhl, a professor of accountancy and associate dean of Haworth College of Business at Western Michigan University, has done sustained research on Catholic Church financial disclosures. Ruhl reports:
Of 194 dioceses and archdioceses, about 115 have audited or reviewed financial statements available online. Of the others, 39 do not release financial statements to the public. At 12 dioceses, you must make a written appeal to the chief financial officer and if he or she thinks your request is worth granting, they will grant it. Another 28 dioceses publish some sort of financial report, which is different from financial statements, and which may or may not be audited. Only 5 of the 115 audited statements include parishes. The remaining 110 are primarily just the administrative offices. If the audited financials are just for the administrative offices, and not the parishes, those financials are almost worthless to someone who wants to understand the financial state of a diocese.
The highest level of assurance is provided by a full set of financial statements that have been audited by a public accounting firm.
A CPA firm will not provide an audit report without all of the figures for a statement. Ruhl credits the Archdioceses of Boston and Los Angeles and the Kalamazoo, Michigan, diocese for posting audited statements:
A review is substantially less in scope than an audit. That’s how the Chicago Archdiocese releases information.
No assurance is provided by financial statements that have been compiled by a CPA firm. A compilation just requires the CPA to look for obvious errors. An example is the Archdiocese of New Orleans. The numbers may or may not even be close. There is not a full set of financial statements, nor are there notes to the financial statement.
Atlanta, Austin, Arlington, and Anchorage have audited statements, but none includes parishes in the accounting entity. Austin states that its parishes and other agencies have been separately