The Archdiocese of Philadelphia released audited financial statements for 14 Catholic entities March 14, covering the 2013 fiscal year. The year runs from July 1, 2012 to June 30, 2013.
Like the financial statements released last December for the Office for Financial Services (OFS), today’s statements were also audited by the firm Grant Thornton and they show a brightening picture of the archdiocese’s finances.
Unlike the financial statements for fiscal 2012 published in the summer of 2013, all statements for the past fiscal year provide a comparison to the previous year.
The audited financial statement for OFS, the archdiocesan central administration’s offices, showed a dramatic turnaround to a $3.9 million surplus in fiscal 2013 from a $39.2 million deficit the previous year.
The latest statements plus their accompanying “narrative” explanations that were released today cover a range of archdiocesan ministries from education to social services to health care and others, which are separately organized and therefore require separate audits.
Expenses generally remained flat from the previous year, rising only slightly. In several cases, donations from the Catholic community (whether through the Catholic Charities Appeal or direct contributions to agencies) plus gains from investments have resulted in turning losses into gains in net assets – the bottom-line indicator of an organization’s financial performance.
The statements for three entities cover the Office of Catholic Education (OCE): the 17 high schools owned by the archdiocese (which are managed by the Faith in the Future Foundation); the four schools of special education; and the central administrative offices of OCE, which manages centralized functions such as curriculum and personnel development.
The Catholic elementary schools in the archdiocese are not included in the statements because they are operated and owned by their parishes or in the case of regional Catholic schools, groups of parishes.
OCE’s “administrative account” covering its centralized operations saw an increase in net assets of $2.6 million, to $37.2 million from $34.5 million, thanks primarily to a gain on investments.
The high schools showed a more dramatic swing in net assets: a $5.8 million gain in 2013, up from a $4 million loss in 2012. Investment gains appeared to be a major reason.
The narrative for the statement said even though the average total cost per student was $8,366, an increase of $555 from fiscal 2012, “actual tuition and fee charges were lower since other sources of funding make up for the difference.”
The base tuition charged in most of the schools in fiscal 2013 was $5,850 with varying fees at each school depending on the activities and programs at each school.
The high schools manage the costs by using two accounts: a “high school operations account” that accounts for 77 percent of expenses for OCE’s centralized operations; and a “president’s account” representing 23 percent of expenses, used at each school for local needs.
“The system has resulted in lower tuition costs for our archdiocesan schools than for most Catholic high schools across the country,” the accompanying narrative read.
Catholic Health Care Services not only delivers top-quality health care to seniors in the archdiocese, financially the system of six nursing homes and one independent living facility is in the peak of health. The system tallied 502,984 “resident care days” in fiscal 2013.
The audited financial statement for CHCS shows little change in 2013 from the hale 2012 numbers. The system’s $142 million in unrestricted assets, up a bit more than $2 million from 2012, exceeded total liabilities of $35.5 million.
The archdiocese announced its intention last year to market the nursing homes for sale in order to fund long-term archdiocesan debt.
CHCS is organized under the Catholic Human Services umbrella in the archdiocese along with Nutritional Development Services and Catholic Social Services.
The latter’s audited financial statements show a darker picture than that of Catholic Health Care. Expenses of $25.5 million for Catholic Social Services exceeded its operating revenue by $10 million. Additional revenue from the Catholic Charities Appeal, donations and some investment returns narrowed the gap but it still stood at $1.1 million for 2013.
The negative “change in net assets,” according to the statement, follows the previous year’s positive change in net assets of $2.2 million.
CSS provides a broad range of social services to homeless men and women, intellectually disabled and at-risk youth, families, seniors and all residents of Southeastern Pennsylvania regardless of creed.
The accompanying narrative to the CSS statement explained the biggest sources of revenue were reimbursements for governmental programs operated by CSS and client fees for its services.
While government funding and donations were adequate to exceed expenses at CSS agencies such as St. Edmond’s Home for Children, other agencies in the Youth Services Division struggled financially.
According to the accompanying narrative, CSS corporations including St. Gabriel’s System, St. Francis/St. Joseph Homes and St. Vincent Home that provide residential services for dependent and court-adjudicated youth “continue to struggle due to static governmental reimbursements and underutilization” in the facilities.
“Current governmental policies prioritize serving youth in their homes/communities and this factor has reduced commitment of children to group homes and congregate care,” the document read. “In fiscal 2013, the Youth Services Division sustained operational losses of $5 million on $39.5 million in revenue and $44.5 million in expenses. The growth in investment value this fiscal year allowed CSS to fund ongoing operations.”
Nutritional Development Services also cites governmental funding – primarily the U.S. Department of Agriculture — as the largest component of its revenue. In fiscal 2013 revenues of $18.3 million exceeded expenses of $18.1 million, with most of that (68 percent) spent on food procurement, according to the narrative that accompanied the audited financial statement.
Even though the audited financial report for St. Charles Seminary showed a negative change in net assets – that is, liabilities exceeding assets – for 2013 in the amount of $506,541, that represents a big positive turnaround from the previous year.
In fiscal 2012, the seminary reported a negative change of $2.2 million.
The trend toward improving finances should help in the seminary’s previously announced plan to consolidate the College Division in yet-to-be renovated buildings on the Wynnewood campus’ upper side. No time table for the consolidation has been announced.
A similar brightening financial picture emerges with Catholic Cemeteries, the system of 14 archdiocesan-owned cemeteries. Although the Cemeteries Office’s audited financial statement showed a negative change in net assets of $1.4 million in 2013, that is an improvement over the 2012 negative change in net assets of $5 million.
The previously announced agreement to lease the cemeteries to a private company means up-front proceeds from the deal, when completed, will help improve the same long-term archdiocesan debts, particularly in the Trust and Loan Fund and Priest Pension Fund, as with the potential sale of the archdiocesan nursing homes.
The veritable bottom line is that even with indicators of improving financial health in the archdiocese, there is still a ways to go toward full recuperation.