How Your Money Is Spent

Boston Catholic Insider
February 15, 2012

http://bostoncatholicinsider.wordpress.com/2012/02/15/how-your-money-is-spent/





We move back to the topic of finances in the Boston Archdiocese today and for the next few posts. You will see today how administrative expenses have grown as a percent of the total budget over the last 6 years.

Last week, in "Balanced Budget" or Unbalanced Budget?, we raised the question of how the archdiocese managed to publicly claim that the 2011 budget was "balanced" when the financial statements actually show a $4.2M loss. BCI emailed Jack McCarthy (Finance Council Co-chair), outgoing Chancellor Jim McDonough, and Interim Chancellor John Straub to ask them about this, and while we wait for their response, we thought we would show you how your money is expected to be spent in the 2012 fiscal year currently in process.

To the credit of the archdiocese, the 2012 budget document is quite comprehensive–probably moreso in a published form than any other diocese issues. You can find it here.

Below is a pie chart taken from the document showing where the $27.8M Central Ministries budget is being spent.

As you can see, in the 2012 fiscal year, 36% of the budget ($9.95M out of $27.8M) is consumed by Administrative Services. By means of comparison, in 2010, Administrative Services expenses were 30% of the total budget (see "Easy Come, Easy Go" from a year ago). As a further comparison, if you look at the 2005 operating results in the annual report here, you will see that Management and General expenses (equivalent to Administrative Services, as best as we can tell) in 2005 were $10.1M out of total expenses of $37.9M, or 26% of the total. Click on the graphic on the right to see the numbers from 2005. Some line items may not be perfectly matched between the annual report and operating budget, but this is the best comparison possible without having access to more detailed information.

Below you will find the detailed breakdown of expenses for 2012.

(You will notice in the footnote that the $2.5-2.6M spent annually on the Office for Child Advocacy and Victim Assistance has been moved off the main Central Ministries operating budget and is now accounted for under Risk Management and self-insurance for Corporation Sole. We are still trying to fully determine the ramifications of that move).

There is much to be said about the overall budget, including spending priorities, fund-raising costs relative to funds raised, and more.

For today, BCI mainly wishes to focus on the apparent growth in administrative expenses in recent years as a percent of the total budget. While Jim McDonough is still wrapping things up in his final weeks as Chancellor, BCI suggests that perhaps the Priest Budget Advisory Committee and Vicar General Msgr. Deeley might take a closer look at why administrative expenses have grown from 26% of the expenses to 36% of expenses over the past 6 years. Perhaps they may not want such a high percentage of donor funds and total budget going to pay administrative overhead expenses including excessive six-figure salaries. What would it take to cut $1M to $2M in administrative expenses, so that category of spending would be much more in proportion to past levels? Instead of spending so much on administrative overhead and excessive salaries, they may want to think about how some of those limited funds could be better used to support ministry programs, such as evangelization, adult faith formation, college campus ministry, the deaf apostolate, vocations, and other programs that support priests and parishes and help advance the saving mission and ministry of the Catholic Church in Boston.

What do you think?