Dioceses cry foul over funding report

U.S. dioceses are crying foul over an investigative report on coronavirus relief funding they say grossly mischaracterized the Catholic Church’s finances and unrestricted cash flows, leaving the impression the Church used the 2020 CARES Act to hoard cash.

Officials of the Diocese of Charlotte, N.C., said their diocese was among several first contacted by The Associated Press last December in advance of an investigative-style report headlined, “Sitting on billions, Catholic dioceses amass taxpayer aid,” and the Charlotte diocese provided the AP with detailed responses and financial data related to the Paycheck Protection Program, or PPP.

The CARES Act, passed in March 2020, initially authorized some $350 billion in loans to small businesses through PPP, a program intended to allow them to continue to pay their employees.

In late April, statistics compiled by the Diocesan Fiscal Management Conference showed 8,000 parishes, 1,400 elementary schools, 700 high schools, 104 chanceries, 185 Catholic Charities agencies and 200 other diocesan organizations in 160 dioceses had applied for assistance at that point.

But not all dioceses, parishes and schools applied for the PPP funding and some later returned the funds once their fiscal status was clarified in spite of the pandemic and economic downturn, according to Patrick Markey, executive director of the conference.

The AP story alleges that “scores of Catholic dioceses across the U.S. received aid through the Paycheck Protection Program while sitting on well over $10 billion in cash, short-term investments or other available funds,” and that “even with that financial safety net, the 112 dioceses that shared their financial statements, along with the churches and schools they oversee, collected at least $1.5 billion in taxpayer-backed aid.

“A majority of these dioceses reported enough money on hand to cover at least six months of operating expenses, even without any new income,” the AP report states.

William Weldon, a certified public accountant, who is chief financial officer and chief administrative officer for the Diocese of Charlotte, told Catholic News Service Feb. 7 the AP story mischaracterizes the financial reality in Charlotte, incorrectly conflating its finances with assets owned and controlled by more than 100 separate Catholic parish and other entities within the diocese.

The report, Weldon said, also grossly overstates available assets, ignores financial liabilities and erroneously suggests that restricted donations and funds designated for specific purposes could have been diverted to cover payroll, rent and utilities for other entities.

“This would be unethical,” he said. “Our parishioners and donors rightfully expect that we will honour the purpose for which funds are given to our parishes, schools and ministries.”

In the Diocese of Raleigh, North Carolina, Russell Elmayan, chief financial officer and chief administrative officer, said Feb. 5 in a statement to CNS that “the recent AP article as written does not provide appropriate context, in my opinion,” adding, “Parish offertory remains approximately 10 per cent below the prior year at this time.

“Since offertory is by far the largest part of the revenue stream for any parish, the PPP loans clearly saved jobs and kept people employed, which is what they were designed to do,” Elmayan said.

The chancellor for the Archdiocese of Boston, John Straub, told CNS the AP report was “grossly misleading at best.”

Straub said the archdiocesan financial reports available to AP only reflect the early months of the pandemic when the crisis was just emerging and when the PPP funds had been received but not yet spent.

“The overall assumption the article makes is that the Catholic Church should not have participated in the PPP program,” he said. “But if folks go back to imagine what things were like at the start of the pandemic the need increased almost immediately after people started losing jobs or were not able to work full time.”