Milwaukee Archbishop Timothy M. Dolan is going to require that the 211 parishes in the 10-county archdiocese undergo financial reviews by outside professionals to ensure that no volunteers or church personnel are dipping into the more than $198 million in unrestricted donations and fees that parishes and their schools collect annually. Dolan has made that decision in consultation with advisers and is awaiting recommendations from a special committee looking at issues that include how extensive and how frequent those reviews should be, Katie Hoeller, director of the Parish and School Financial Services Office, said Thursday.
Started last year, that effort is not directly related to the recent hiring of an accounting firm to examine the books of St. John Vianney Parish, a large Waukesha County church whose pastor was arrested in December and charged with misdemeanor possession of cocaine.
But it is taking place amid a larger effort by U.S. Catholic bishops to improve church stewardship and tighten financial accountability in the aftermath of the priest sexual abuse scandals. In November, the U.S. bishops conference - which does not have the authority to mandate such action - strongly encouraged dioceses to have routine internal or external audits of parishes.
That action was sparked in part by large embezzlement scandals at parishes in Virginia, Connecticut and Florida, and by the release in 2007 of a report by Center for the Study of Church Management at Villanova University that found that 85% of dioceses in the United States responding to a survey reported instances of embezzlement in the past five years, said Chuck Zech, director of the center and a co-author of the study report, "Internal Financial Controls in the U.S. Catholic Church."
"Every church has the same problem of being too trusting of their priests and ministers and church workers," Zech said. "It's not unique to the Catholic Church. . . . No one would think that a priest would embezzle, and no one would think that a church worker would, so they don't put in the kinds of internal controls common in the business world."
Dolan noted the need for external reviews and detailed some of the archdiocese's financial guidelines and safeguards for parishes in his Herald of Hope column in Thursday's Catholic Herald, the archdiocesan newspaper, adding that "just like the Ten Commandments or the eight beatitudes - people can and do break these rules."
The church "must be scrupulous in sound stewardship of the money entrusted to us by God's people," Dolan wrote. He also noted that the archdiocese itself has had a complete financial audit annually for decades.
The Milwaukee archdiocese has detailed financial guidelines and requirements for parishes. They include a call for an internal financial review of each parish every four years to make sure that each is following the required accounting procedures and guidelines.
But that has not been done since 2000 because of additional duties given to the archdiocese's Financial Services Office, Hoeller said.
About 25 parishes have undergone such reviews each year, either because they requested it or because of some irregularity in the parish's financial reports, the turnover of key parish staff members, the posting of deficit budgets, or other factors, she said. Some were selected at random because it had been years since their last review, but some parishes have not had a review since the late 1990s, she added.
"I'm fairly comfortable with the fact that pastors and trustees and business managers are watching, and where they are following procedures, they will be our first warning if we have a problem," Hoeller said.
The Milwaukee archdiocese's financial review practices are common among dioceses, Zech said.
The Villanova study, which was funded by the Louisville Institute and based on surveys returned by 78 of the nation's 174 dioceses, found that 3% of dioceses participating had annual internal parish audits, 14% had such audits only when there was a change in key personnel such as the pastor or bookkeeper, and 21% seldom or never had audits.
The remaining 62% of dioceses responding to the survey audited each parish on an average of once every four years.
Outside audits could do more than the current internal reviews, Hoeller said. They could, for example, comment on whether a parish is following generally accepted accounting procedures and contact donors to see if the donations reported by a parish matched their personal records.
Annual reviews or audits, whether done internally or externally, would spot questionable changes and inconsistencies faster, too, she added.
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