Dear Parishioners of the Diocese of San Jose,
In response to the blessings that come from all who sacrifice your treasure for the work of the Church in the Diocese of San Jose, we strive to be good stewards of these funds. Transparency and constructive feedback is important to a process of continuous improvement. To this end, we have worked to make the Diocesan financial report easier to understand and accessible here in The Valley Catholic and on-line at www.dsj.org/wp-content/uploads/2018/02/Diocese-of-San-Jose-A-010-12-16-Final-Issuance-FS-2-2-18.pdf.
A simplified income statement and balance sheet for the fiscal year ending June 30, 2017, can be found below. These financials have been independently audited by Moss Adams and have received an unqualified opinion (clean audit).
The Diocese of San Jose presents its financial results on a consolidated basis that excludes parishes and schools. The financials are reported as seven separate funds, as well as in total. These funds represent six separate supporting structures and a fund to track donor restricted donations (assets donors assigned to a specific purpose), which predominantly support the Operating Fund. The Operating Fund is the “chancery” fund which includes the majority of the central administrative staff who support the Diocesan parishes and schools. The Service Fund includes all insurance and payroll billing support that is provided to all Diocesan entities. All “profit” from this Fund goes to insurance reserves for the self-insured portions of the Diocesan Insurance Program. Other funds (Priest Retirement, Drexel, Cemetery and Deposit and Loan) operate under the umbrella of the chancery, but are completely separate from the main Operating Fund of the chancery.
Overall, with the help of our generous donors, the Central Administrative Offices (CAO) had one of its most successful financial years in the history of the Diocese. The CAO experienced a $9.8 million operational gain for the year and, when taking into account investment gains and calculated pension improvements, the CAO had a net gain of $16.8 million. The net of the operating and restricted fund was a $4.6 million gain which was predominantly from investment gains, the Priest Retirement fund had a $1.9 million gain, the Service Fund put away $4.3 million towards insurance reserves, the cemetery made $4.8 million, Drexel received in excess of $3.3 million of five-year pledges and the Deposit and Loan Fund lost $2.5 million due to an increase in past bad loan reserves.
The strong financial performance for the year brings some much-needed relief to the CAO’s balance sheet (available below). The CAO’s financials are currently in a stable condition; however, there are still numerous financial gaps which will require many more years of financially strong performance and a possible future capital campaign to properly address.
Over the next decade the chancery will work to address our financial concerns to ensure the long-term health of the Central Administrative Offices. Concerns to be addressed are a Deposit and Loan which has lost money over the years, underfunded Priests’ and Lay Retirement Funds, the need to pay off some external debt and a need to increase our insurance reserves.
Thank you for your support of our work of preaching the Gospel and build up the community of believers in the Diocese of San Jose.
Chief Finance Officer