Posted February 3, 2012

When I wrote to the people of the Archdiocese on December 8 last year, I said that we’d face a great many legal and financial issues in 2012. Last Sunday, January 29, one of those challenges made Philadelphia Inquirer headlines.

A senior member of the archdiocesan staff stole more than $900,000 of our people’s resources before being discovered and fired last summer. Our normal outside auditing firm — independent and nationally respected — had previously found no evidence of criminal activity.

The story is not new. In fact, news media first reported this story last July. But neither the Church nor the District Attorney’s office knew the scope of the loss until last fall.

We’ve been silent on this matter until now for obvious reasons: to allow law enforcement to do its work. Circumstances have now changed.

People are angry about this loss, and they’re right. So am I. There’s no excuse for it. Non-profit organizations – like foundations, Churches, museums and many hospitals – tend to draw mission-driven people as staff. Most of their employees are honest. A few are not. And in a work environment based on shared beliefs and service, a dishonest person can do massive damage.

Precisely because religious organizations run on the good will of the people they serve and the dedication of their staffs, they can easily become too trusting in their internal safeguards. But that only makes the need for tight financial controls and accounting procedures more urgent.

It’s important to keep a few facts in mind as this story plays out over the coming weeks:

First, the theft occurred from the general operating funds of the Archdiocese. Monies donated to the Heritage of Faith, Vision of Hope capital campaign and the annual Catholic Charities Appeal were not impacted in any way. The theft also had no effect on the work of the Blue Ribbon Commission or the decision to close or regionalize any school.

Second, based on an outside forensic financial review conducted by the firms of ParenteBeard and BallardSpahr, the theft was confined to one senior staffer. No other archdiocesan staff persons were involved.

Third, the Archdiocese has worked with the District Attorney’s office throughout this investigation. And we will vigorously pursue restitution from the wrong-doer.

Fourth, as bitter as this loss is, insurance will cover much of it. This is little comfort and absolves no one, but as an immediate concern, at least some of the damage will be made whole. Moreover, since Catholic Social Services, Catholic Health Care Services and similar ministries are separate entities from the Archdiocese, they suffered no loss from the theft.

Fifth and finally, when I arrived in Philadelphia in September, I began a comprehensive legal and financial review of archdiocesan operations conducted by experienced outside professionals. That independent review is continuing. We’ve begun to apply its recommendations in the way we steward the resources entrusted to the Church by our people.

The recruitment of a new chief financial officer is nearing completion. The search for a new archdiocesan controller is also underway. New procedures are in place in the areas where the embezzlement occurred. In the coming year, new and much more rigorous internal controls will take effect, along with tighter budget discipline and a demand for improved skills in everyone tasked with the management of archdiocesan resources.

To their credit, Bishop Timothy Senior, our moderator of the curia, and Marc Fisher, the new director of our internal auditing efforts, have been a great help in this difficult process.

The task ahead is large. But protections are already in effect to help prevent this kind of damaging criminal activity in the future. Working with our Archdiocesan Priests’ Council, our Archdiocesan Finance Council and the Archdiocesan Pastoral Council now in formation, I do promise that every aspect of our shared life as a Church will be subject in the years ahead to the kind of clarity, greater accountability and careful stewardship our people deserve.