The 2006-07 fiscal year, which ended in June, was a good one for financial operations at the diocesan Pastoral Center, as can be seen in the report presented in the center of this edition.
Lisa M. Passero, who became chief financial officer for the Diocese of Rochester in May, pointed to the diocese’s net assets, which experienced $2 million of growth, as a sign of the diocese’s positive direction.
She noted that most of the $35 million net assets listed on the diocesan balance sheet are restricted, meaning that donors earmarked the funds for specific purposes. The $10 million in unrestricted net assets primarily comprises money the diocese has earmarked for self-insurance, Catholic schools and the training of seminarians, Passero said.
She explained that diocesan net assets had increased due to several factors.
“There was a strong response to the Catholic Ministries Appeal, and our investments are doing well,” she said.
The annual Catholic Ministries Appeal provides nearly half of the diocese’s annual operating budget of about $10.7 million. The 2006-2007 appeal raised $5.44 million, which was the largest total in years.
The financial statement reflects other positive signs, including continued payment of pledges made through 2003’s Partners in Faith Capital Campaign, as well as substantial savings in employee benefits, Passero said.
This year’s financial statement does not report Partners in Faith contributions as revenue, since the pledges were recorded as revenue in previous years, but it reflects that the diocese paid out $1.9 million in campaign receipts to parishes last year.
Insurance and workers’ compensation claims continue to be an area of focus. The diocese purchases insurance policies to cover itself, its parishes and related agencies for property, liability, and workers’ compensation, but must cover substantial deductibles on those policies out of a self-insurance fund.
In an attempt to control insurance claims, Passero said one of her goals is to enhance the diocese’s risk management program in the area of workers’ compensation. The diocese achieved a decrease of 12.9 percent in employee benefits as a result of two factors.
One factor was the effort to move retired priests from higher-cost indemnity health-care plans to a lower-cost HMO plan, while preserving the level of benefits they receive. However, Mary Ziarniak, diocesan director of financial services, said another component arises from the diocese’s transfer of priests’ pension net assets into a pension trust midway through the prior fiscal year. Priests’ pension distributions that had previously been recorded through the Pastoral Center operations are now fully recognized under a separate pension trust.
The statement reflects other factors as well. A 15 percent decrease relative to the prior year’s spending on faith formation, for example, is a function of the biennial nature of the National Catholic Youth Convention; expenses for the NCYC taking place Nov. 8 to 10 in Columbus, Ohio, will appear in the 2007-08 financial statements.
A 30 percent increase in support of parishes reflects capital improvements at the parish level, and was offset by restricted donations for such improvements, Passero said.
Passero said that among her future priorities for Pastoral Center financial operations are long-term strategic planning, simplifying financial processes and pro-active risk management.
A certified public accountant, Passero previously worked as the chief financial officer for People’s Pottery and for the Hobart West Group, a legal consulting firm. She has also worked as a senior manager at PricewaterhouseCoopers and as the director of finance for Polo Ralph Lauren.
She said she was drawn to accounting on the encouragement of her grandfather, and pursued the diocesan job as part of a return to the city of Rochester. She said she has enjoyed her first experience working with a nonprofit organization.
“It’s a challenging organization,” Passero said. “Much of my experience is in strategic planning and operations , so I believe I can make some significant contributions.”