Accountability Report
Accountability Report
Chief Financial Officer's Report
Diocese is blessed by the generosity of many
By Mary Beth Koenig
Chief Financial Officer
Thank you for your faith and continuing generosity to the Diocese of Austin. Our ability to carry out the mission of Christ in Central Texas depends on your personal commitment to stewardship. It is our hope this annual financial report helps you better understand our financial statements, our activities and ministries, and our commitment to be good stewards of the gifts you entrust to the diocese.
The accompanying financial statements are those of the Central Administrative Office (CAO) of the Diocese of Austin. The CAO provides programs and services to parishes, schools and other Catholic organizations in Central Texas. The accompanying financial statements have been extracted from the audited financial statements of the CAO. The financial statements do not include the parishes, missions and schools in the diocese and also do not include the activities of the Catholic Foundation – Diocese of Austin. The Foundation was created in October 2007 as a separate nonprofit corporation to promote the establishment and growth of endowment funds to provide perpetual funding for the CAO and participating parishes, schools and other Catholic organizations within the diocese.
For the fiscal year ending June 30, 2011, net assets increased by $1.7 million, compared to a decrease in net assets of ($21 million) in the fiscal year ended June 30, 2010. The decrease in net assets for 2010 was directly related to distributions and adjustments associated with the Our Faith ~ Our Legacy (OFOL) Capital Campaign.
Total revenues increased by $6.4 million in 2011, primarily due to increases in investment income, contributions and bequests, and insurance premiums. Consistent with improvements in the overall financial markets in 2011, investment income of the CAO increased by $2.2 million in 2011. This investment income was from realized and unrealized gains on investments, dividends and interest income. Income from contributions increased by $1.4 million due to higher than expected collections from OFOL pledges in 2011 and distributions of approximately $600,000 received from OFOL endowments in the Catholic Foundation. Insurance premiums increased by $1.3 million primarily due to increases in the number of employees and dependents covered by the group health insurance plan combined with a small rate increase in the premiums charged to parishes and schools.
Total expenses decreased by $16.3 million in 2011. During the fiscal year ending June 30, 2010, approximately $14 million of funds received by the CAO from the OFOL campaign was transferred to the Catholic Foundation for the establishment of endowment funds for seminarian education ($5 million), retired priests ($3 million), Catholic Charities, ($3 million), deaconate ministry ($1 million), Catholic schools ($1 million) and campus ministry ($1 million). The foundation expects to make annual distributions from these endowments in the amount of 4 percent of the net fair market value of the endowments averaged over the preceding three years. The first of these annual distributions (approximately $600,000) was made in 2011. These distributions greatly assisted the diocese in meeting the increasing needs of these ministries. Additionally, in 2010, the expenses were unusually high as diocesan management revised the estimate of OFOL pledges receivable based on collections received through June 30, 2010 and reduced the receivable by approximately $8.1 million through a provision for uncollectible pledges. The reduction was due in part to a weakened economy and reported increased unemployment of donors subsequent to the conclusion of the pledge phase of the campaign in 2007 at which time a receivable of $32.8 million was recorded. As of June 30, 2011, approximately $56 million was collected on pledges of approximately $83 million from the OFOL campaign. As of June 30, 2011, approximately $15.4 million has been returned to parishes through the parish rebate program. The majority of the OFOL pledges were made over a five year period that will conclude in 2012.
In 2011, $2 million was distributed to the Austin Pension Plan and Trust from funds received from the OFOL campaign. The funds were invested in the Austin Pension Plan and Trust and the earnings will be used to provide for pension payments to retired priests in the Austin Diocese. Additionally, approximately $1.1 million was distributed to St. Dominic Savio Catholic High School from funds received in the OFOL campaign, which were donor-designated for this purpose. Funds were used by the school to reduce outstanding debt and to fund general operations. Interest expense increased by approximately $1.2 million in 2011 due to increases in the amount of debt outstanding combined with an increase in the interest rate incurred on debt.
Adjusting for planned distributions from the OFOL campaign over the past two years and the provision for uncollectible pledges in 2010, the CAO has operated on a breakeven basis. We have met the needs brought about by the large number of seminarians and increasing number of retired priests by reducing costs in other areas – largely through attrition and the combination of positions at the Pastoral Center. Additionally, staff of the CAO did not receive salary adjustments for each of the fiscal years ending June 30, 2010 or 2011. We continue to operate with a balanced budget in the current fiscal year. We are thankful for the newly established endowment funds created with your gifts to the OFOL campaign. The endowments will serve as a strong financial foundation for the Diocese of Austin. Distributions from endowments in the Catholic Foundation have and will continue to assist in serving our increasing needs.
We remain thankful for our many blessings and for your generous financial support. We depend on you to meet the needs of our growing population and the ministries needed to serve the faithful. May God bless you for the sacrifices made to nurture the Catholic faith in Central Texas.