A Step Toward Accountability

Assessing Diocesan Financial Transparency
Attendees at the annual meeting of the Diocesan Fiscal Management Conference in Atlanta in 2015 (CNS photo/Michael Alexander, Georgia Bulletin)

Reports of sexual abuse and cover-ups within the church hierarchy have led to increased attention to the church’s secrecy around its finances. Until only recent decades, U.S. diocesan financial affairs were kept confidential and knowledge was compartmentalized; even some very highly placed diocesan officials were unaware of the settlements used to keep clerical sexual abuse under wraps. It was generally assumed that once contributions hit the collection basket, parishioners had no business knowing how the bishops used that money. What they would have learned is that the U.S. Catholic Church has spent $3.99 billion related to clerical-abuse settlements.

Before the Boston Globe’s 2002 “Spotlight” report, most Catholics in the pews thought that clerical abuse was rare. But presiding bishops knew differently: both from their personal experiences, and from the work of Fr. Thomas Doyle and others, who reported in the 1980s on the prevalence of abuse in the church. When Rev. Gilbert Gauthe admitted to abusing more than three hundred children in the Diocese of Lafayette, Louisiana, in 1986, or in 1993 when Rev. James Porter was sentenced to between eighteen and twenty years in prison for sexual abuse of children in Fall River, Massachusetts, there was minimal discussion of the role that church funds might have played in keeping those stories quiet.

Transparent financial reporting would have revealed the extent of the settlements bishops made, and lay Catholics would have been aware that abuse was not rare but widespread. With this information made public, many children could have been spared the devastating effects of child abuse. Even were abuse to occur, church officials would not have been able to cover it up with secret settlements. Serial abuse would have been far less likely.

Why was the financial story not told? In many cases, the hard facts simply weren’t available. Before 2002, everyone—from diocesan leaders, to the lay faithful in the pews, to the survivors of sexual abuse and their attorneys—knew that the availability of diocesan financial information depended upon a bishop’s willingness to release it to the public; there was no civil or canon requirement to do so. Most U.S. dioceses are corporations sole: the presiding bishop effectively has complete control of the finances, with the ability to move funds from one purpose to another at his personal discretion. Even though canon law (Canon 1277) requires the consent of diocesan finance councils for “extraordinary” expenditures, there is no evidence that finance councils’ consent was routinely sought for these settlements.

After 2002, as the role of financial secrecy in paying off settlements became clearer, the lack of real data on diocesan finances and the difficulty in obtaining it made it impossible for most lay members of a diocese to know if such financial practices were continuing. Those concerned that their contributions had been used for settlements had no way to be sure they were not. Lacking factual financial information, lay members of a diocese who wished to support charitable activities were left with a choice: they could continue their financial support as before and trust their bishop to do the right thing, or they could support other, more financially transparent charitable organizations. Many chose the latter; in some cases, diocesan financial support dropped alarmingly after 2002. With contributions in areas of the United States affected by the scandal declining at an average of $2.36 billion per year from 1980 to 2010, and the total costs of settlement payouts mounting to nearly $4 billion, the impossibility of maintaining the status quo was obvious.

Dioceses across the country began to move toward more financial transparency to convince their members that their money was being used for the mission of the church. Some bishops made audited financial reports publicly available, publishing them on websites and in diocesan newspapers. This movement toward transparency began well before the election of Pope Francis; it may have even been one of the factors encouraging the new pope’s efforts to increase transparency within the Vatican.

Financial transparency is an essential window onto diocesan financial practices, but it is not synonymous with financial accountability.

From its earliest days, Voice of the Faithful recognized that financial secrecy was an essential element in the cover-up of clerical sexual abuse, and that greater financial transparency was needed. So in the summer of 2017, we reviewed the websites of all 177 territorial dioceses in the United States to assess the publicly available financial information provided by each diocese and to assign financial transparency scores. The ten questions upon which these scores were assigned were based on various key criteria. Were audited financial reports posted on the website? Was information available about the annual appeal and annual parish assessments? Could parish financial guidelines, membership and composition of the diocesan finance council, and contact information for the diocesan business office be found? Credit was even given if the website had a workable internal search engine to facilitate locating this information. Scores were on a scale of zero to 60; the highest achieved was 59, and 10 was the lowest.

The results of the survey showed that only 83 dioceses—47 percent—had posted the results of their most recent audited financial statements on their websites. Some others provided online brochures summarizing diocesan finances, but such self-reporting is not the equivalent of an audit by an independent accounting firm. While better than silence, it is not reassuring to those who may have lost trust in their diocesan leadership.

A high transparency score was not a function of diocesan size or net worth. The nation’s largest dioceses ranged widely in their ranking: the Diocese of Sacramento scored the high of 59, while the Archdiocese of San Francisco scored 51 and the Archdiocese of Los Angeles scored 45. Geographical area did not have a strong effect on scores: the Archdiocese of Washington, D.C. scored 44; the Archdiocese of Baltimore scored 55; the Archdiocese of Boston scored 46; the Archdiocese of New York did not make audited financial reports available and scored a disappointing 27. Some high-scoring dioceses, such as the Archdiocese of Baltimore, the Diocese of Bridgeport (also a 55), and the Archdiocese of Boston have demonstrated a commitment to financial transparency with measures such as public statements by diocesan personnel, or have been recognized for outstanding financial reporting practices by an outside organization.

Such transparency will give the lay faithful a higher level of confidence that their financial support of the bishop and of the good works of the diocese is accomplishing its intended goal. It should enhance the sense of lay stewardship within the diocese and encourage generosity. Based on the review, it is clear that many dioceses agree. The results are gratifying from the point of view of 2002, but perhaps disappointing from our vantage point in 2018. Given the undeniable benefits, why did 94 out of 177 dioceses fail to provide current financial reports?

Perhaps some still subscribe to the view that these financial details are not the business of the members of the diocese, or that a financial audit will prove too complex for the laity to comprehend. A diocese might also choose not to publish its audited financial report if it received a qualified opinion from the auditor—a sign that the diocese has not disclosed certain important aspects of its finances.

In 2017, a handful of high-scoring dioceses did, in fact, have qualified opinions. These included Burlington (with a score of 44), Amarillo (47), and Venice, Florida (55). Because the priority of the review was to encourage publication of audited reports, these dioceses did not lose points as a result. Another financial transparency review is now underway. Although the same scoring system remains in place to enable comparisons between 2017 and 2018, the 2018 report will highlight the presence of a qualified opinion.

Financial transparency is an essential window onto diocesan financial practices, but it is not synonymous with financial accountability. The latter requires that members of the diocese read the reports and act on them. Vigilance on the part of the diocesan finance council, as well as all the faithful, is required to ensure the just and prudent use of resources entrusted to church. It may also help to prevent future scandal and the immeasurable pain it could cause to our church and to the world.

David Castaldi was a biotechnology entrepreneur and CEO who also served as Chancellor and CFO of the Roman Catholic Archdiocese of Boston (RCAB). Joseph Finn was a member of the RCAB’s Diocesan Finance Council and authored its initial charter. Margaret Roylance is a research materials engineer, Vice President of Voice of the Faithful (VOTF), and Chair of its Finance Working Group. All three were among the founding members of VOTF.

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