Under ordinary circumstances, the 2019 financial statements for the Diocese of Rochester would be considered quite positive: Vital revenue lines are up, expenses are down slightly, and the bottom-line shows a healthy $3.215 million increase in net assets. Lesser return on investments than in the prior year was the only mildly negative aspect of the report issued Oct. 21.
Yet in its independent auditor’s report, Bonadio and Co. noted that events subsequent to the close of the diocesan fiscal year on June 30, 2019, “raise substantial doubt about its ability to continue as a going concern.”
“Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued,” according to the Financial Accounting Standards Board.
However, a going-concern opinion comes as no surprise given the diocese’s Sept. 12 Chapter 11 bankruptcy filing.
Acknowledging that the auditors were obligated to address the diocese’s financial future, diocesan Chief Financial Officer Lisa Passero noted that when Bishop Salvatore R. Matano announced the Chapter 11 reorganization, he said he believed the diocese would emerge stronger from the proceedings.
Despite the fiscal challenges, Bishop Matano said, “The Gospel of Christ remains the same. The sacramental life of the Church remains the same. As the shepherd of this diocese, I must minister to the victims while I also minister to the faithful and assure that our children continue to be baptized; receive Holy Communion; the sacrament of Reconciliation; the sacrament of Marriage; the sacrament of the Anointing of the Sick; that when their loved ones die we accompany them when they return their loved ones to God. These ministries have to continue. I don’t have a choice. In any setting, in any circumstance, I have the obligation to continue the mission to reveal the face of Jesus to all people.”
The only other wrinkle in the otherwise unremarkable financial statements was the required adoption of a recent accounting rule on asset classification and liquidity. The re-presentation of assets under this rule demonstrated that a relatively small share of assets on the diocesan balance sheet as of June 30, 2019, was free of temporary or permanent restrictions.Tags: Diocesan Bankruptcy Updates