Rockville Ctr. Diocese Releases Financial Statement

By Rita Ciolli
February 27, 2003

Amid a decline in contributions and calls from the faithful for more financial openness, the Diocese of Rockville Centre Wednesday released an audited financial statement for 2002. However, the statement provides no disclosures of expenses related to the priest sex abuse scandal or to the controversial renovation of Bishop William Murphy's new residence.

The audit shows that the diocese, the sixth largest in the nation and one of the wealthiest, has approximately $303 million worth of investments and about $12 million cash on hand. In the diocese's last fiscal year, ending Aug. 31, almost $8 million flowed from the collection baskets of Nassau and Suffolk parishes to fund the diocese's administrative offices, the report shows.

Joanne Novarro, a spokeswoman for the diocese, declined to answer any questions about the statement, saying the the 17-pages of accounting columns were "self-explanatory." A question and answer sheet by the diocese that was to be posted on its Web site later in the day was not available last night.

Voice of the Faithful, a grassroots group of Long Island Catholics who have been calling for more financial accountability, welcomed the audit's release as a positive first step. However, the group repeated its call for independent financial oversight.

"It does not provide Long Island Catholics with any assurance that the bishop will properly spend their future donated dollars," Kevin Connors, co-chairman of the group's finance committee, said Wednesday.

Connors also questioned why the diocese didn't address the expenses he said most Long Island Catholics wanted to know about: the cost of the sex abuse scandal and the bishop's almost $1 million renovation of the third floor of the former convent at St. Agnes for his new home.

"Is this an example of smoke and mirrors or is it just incomplete?" asked Connors, a retired insurance company executive.

The 2002 audit discloses that the Bishop's Annual Appeal, the diocese's major fundraising effort, raised $12.7 million in the fiscal year ending Aug. 31. However, since the annual appeal is done for the calendar year, not the fiscal year, it is unclear whether the appeal reached its annual goal of $15 million. Only $2.5 million was rebated to contributors' parishes because of the shortfall.

One of the first things Murphy did after being installed as bishop in 2001 was to set higher fund-raising goals. However, the 2003 appeal, which has a $15 million goal, is severely lagging in many parishes, according to pastors and financial statements published in weekly bulletins.

Novarro said Wednesday that additional accounting reports, including one specifically on the Bishop's appeal, will be available in two weeks and that additional reports will be published "as they become available." Last year's audit for the year ending on Aug. 31 was dated Nov. 19, 2002, and posted on the diocesan Web site Wednesday.

By releasing the audit, the diocese said it was resuming a practice it stopped several years ago because there was a lack of interest in the numbers. This audit was released after being approved by the bishop's financial council, an advisory group of lay people required by canon law, according to the diocese. Murphy has changed the members of the council, replacing longtime allies of the late Bishop John McGann, but he refuses to disclose their identities.

The audit does not contain the routine information identifying the accounting firm that did the financial review except for a cover letter noting it was located in Melville, N.Y. The new auditors used data from a 2001 audit done by another firm for comparison to its review of the 2002 numbers. The audit said the firm that did the 2001 audit had ceased operations.

To date, the only information on costs related to the scandal has come from the Suffolk County grand jury report released earlier this month. Using testimony from diocesan financial officers and subpoenaed records, the grand jury found that officials testified that since 1989, $2 million has been spent from the fund for legal settlements, medical bills and treatments costs for priests and their victims.

That money came from the "Uninsured Perils Fund," which was created in 1986 by McGann to cover costs of asbestos removal, trampoline accidents and abuse claims. As of October 2002, there was a balance of $11 million in the fund, which was started with monies assessed each parish. The grand jury found no payments for asbestos or trampoline accidents.

While the audit shows few significant changes for incomes and expenses in 2002 and 2001 the diocese's expenses for public relations jumped 133 percent to $286,753 from $123,166. While the diocese did hire the consulting firm of Howard Rubenstein for three months last spring, public relations industry sources said that alone was not responsible for such a large increase.

As a charitable organization, the diocese is exempt from federal and state income taxes.

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