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December 2013
My Dear Sisters and Brothers in Christ:
It is hard to believe that another year has come and gone. Meanwhile, you, the faithful of the Diocese of Portland, have entered more deeply into the spirit of Advent as you’ve watched and waited not only for the return of the Lord but for the appointment of my successor, the Twelfth Bishop of Portland. Certainly, the Lord knows who that will be, and in due time, he will reveal that person to all of us.
In the meantime, it is my privilege to share this Annual Summary of the financial operations of the Diocese of Portland, and its affiliated corporations, for the twelve months ended June 30, 2013. Continuing to observe our long-standing diocesan commitment to transparency and accountability, I am confident that this summary report presents a clear, accurate and understandable financial portrait of the entire diocese. I also believe that it reveals many things for which we can all be grateful and for which I personally give thanks, including:
• the prayerful, faithful and generous sharing of resources by Maine Catholics so that the Church can fulfill its mission of evangelization through multiple ministries;
• the vision, oversight and advice offered by the members of the Diocesan Finance Council;• the hard work, competence and integrity provided by the staff of the Diocesan Finance Office — they
recognize their efforts are a ministry and not simply a job; and of course, • the exceptional pastoral leadership, commitment and sacrifices of our clergy, in collaboration with their
staffs, without whom the day-to-day life of the Church would not be possible.
As the Apostolic Administrator of this diocese, I continue to pray daily for you, your parishes, and the diocese as a whole because together we are the local Church — the Body of Christ alive and active in this part of the world, where the joyful message of salvation, life and hope must be proclaimed anew.
May the peace and promise of the Christmas season be yours in abundance, now and throughout the new year.
Sincerely in Christ,
† The Most Reverend Richard J. Malone, Th.D. Apostolic Administrator of the Diocese of Portland Bishop of Buffalo
Diocese of PortlanDOffice of the Bishop
Message From The Finance OfficerFinancial results for Fiscal Year 2013 were very good, rebounding nearly entirely from
a disappointing FY 2012. Unrestricted net assets increased $13.9 million after
decreasing $17.6 million last year. Counter to last year, most of the increase
resulted from investment gains and decreases in lay and clergy pension and clergy
retiree health obligations. Temporarily restricted net assets are up $600,000, largely
from investment gains. Permanently restricted net assets improved by $2.0 million.
Total net assets grew by $16.8 million (after deteriorating by $20.4 million last year).
Financial results from ordinary operations show a $2.7 million surplus, with $2.1
million coming from the sale of property. After 2-4% parish offertory drops in each of
the last four years, parish offertory held steady this year. Total operating revenue was up
$2.1 million. Total expense was reduced by $2.4 million. Building maintenance expenses remain high.
Program expenses were reduced by nearly $800,000. Program expenses for ministries such as those for
religious education, youth ministry and schools continue to be cut so that we can, in effect, keep buildings
open that we really don’t need. Twenty-nine buildings are currently for sale, but a number of others remain
underutilized. The Annual Appeal is still significantly short of the $3.5 million raised in 2008. The Appeal
rose slightly from $2.6 million last year to $2.65 million this year.
Roman Catholic Diocese of Portland – Finance Council
We are pleased to present you with this summary financial report for the Roman Catholic Diocese of Portland (including its parishes, schools and cemeteries) for the fiscal year ended June 30, 2013.
The Diocese of Portland Finance Council is one of three primary advisory bodies to the Bishop, along with the Pastoral Council and the Presbyteral (Priests) Council. The establishment of the Council by the Bishop is required by canon law. Its membership consists of the Bishop, the Moderator of the Curia, the Chancellor and a majority of volunteer laypeople often with professional backgrounds in areas such as civil law, finance, development, communications, investments, insurance and real estate. Its purpose is to advise the Bishop on the development and implementation of strategies designed to ensure the financial soundness of the Diocese, oversee (but not manage) diocesan financial operations, and assist the Bishop in achieving transparency in diocesan financial reporting. The Finance Council makes specific recommendations to the Bishop on policies, procedures and actions, and will monitor the implementation of recommendations that have been accepted by the Bishop.
A subset of the Finance Council is the Audit & Budget Committee comprised of all volunteer laypeople. Committee members are knowledgeable and experienced in accounting, auditing and financial management. The primary responsibilities of the Committee are to oversee development of the diocesan budget and to oversee the annual audit process.
Independent external auditors meet with the Audit & Budget Committee as part of their planning process for the annual examination of diocesan finances. Upon completion of the audit, the Committee again meets with the auditors to review their findings and recommendations. It also meets with the diocesan internal auditor to assure that internal audits of parishes, schools and cemeteries are adequately performed. The Committee reports the results of these meetings to the Finance Council, with the external auditors present, and calls for any action needed to ensure sound fiscal management.
At all meetings, we encourage open and sincere discussions with and among members and we are grateful for their commitment, sacrifice and dedication.
Gregg H. Ginn, Finance Council Chair Dick Roderick, Audit & Budget Committee
With offertory flat and the Appeal far short of its historical performance, investment return has become
more critical, and consequently, we have had to challenge ourselves “to think outside the box.” Both the
parishes and the diocese are dependent on income from savings and endowments to pay bills. Income from
those sources, particularly savings and fixed-income securities, is down due to low interest rates. Maturing
investments yielding 4-5% would be reinvested at .5-1% if invested in similar investment instruments. That,
in turn, produces less income for parishes and the diocese to pay its bills. So, “thinking outside the box,”
we opted to invest in income producing real estate yielding 6-7% instead of 1% yielding savings or fixed-
income instruments in order to increase the amount of money available to pay bills. The diocese purchased a
shopping center in Portland simply because the shopping center is a higher yielding investment than savings
or fixed-income securities.
Low interest rates also affect retirement obligations. The discount rate used by actuaries to project pension
and clergy retiree health obligations are based on prevailing interest rates. A lower discount rate pushes
up the retirement obligation. When a lower discount rate is coupled with negative investment returns, a
significant jump in the retirement obligation is inevitable. Fortunately, the discount rate increased slightly
this year, and we had significant gains on investments, resulting in a $10.2 million favorable adjustment to
our liability.
Costs for Sexual Abuse
During Fiscal Year 2013, the cost attributable to sexual misconduct was $108,658 for settlements, victim
assistance, victim counseling and legal expenses. Of that amount, $58,386 was for settlements and legal
costs, which was paid by the insurance program. The remaining balance, virtually all for victim assistance,
was paid from diocesan reserves and investment income.
The Financial Statements
A Combined Statement of Financial Position is shown in Exhibit I on the next page. Investment assets
increased in value by $8.2 million. Retirement plan obligations decreased by $8.3 million.
The Combined Statement of Activities shown in Exhibit II depicts the revenues and expenses for the
Diocese. Parish revenues and expenses comprise the bulk of ordinary revenues and expenses (approx. 88%
of both). Net operating revenue went from a $1.8 million deficit to a surplus of $2.7 million. Net assets
increased by $16.8 million.
Exhibit III provides some insight into the size of Chancery operations. Sources of revenue and functional
expenses are depicted.
Commitment to Accountability
Our resources are provided through the generosity of the faithful. In return, we must be accountable for
the use of those resources. It is our intention to continue publishing similar information on an annual basis.
I hope this financial report is informative.
David P. Twomey
Finance Officer
Rom
an C
atho
lic B
isho
p of
Por
tlan
dS
tate
men
t of
Ope
rati
ons
- C
hanc
ery
For
the
Year
s E
ndin
g Ju
ne 3
0, 2
01
3 a
nd J
une
30
, 20
12
20
13
20
12
Rev
enue
s:
Par
ish
Ass
essm
ents
1,8
29
,32
7
1,8
23
,17
5
Bis
hop'
s A
ppea
l2
,47
3,0
11
2
,69
1,8
09
Res
trict
ed In
com
e 1
48
,53
2
17
0,4
83
Trus
t Fun
ds1
,16
3,7
36
8
98
,98
9
Insu
ranc
e In
com
e 6
67
,84
3
69
3,8
17
Inve
stm
ent I
ncom
e 1
13
,72
9
23
2,0
83
Tota
l Rev
enue
6,3
96
,17
86
,51
0,3
56
Exp
ense
s:
Vica
r G
ener
al's
Offi
ce2
96
,46
53
98
,47
1
Cat
holic
Sch
ools
52
1,5
59
56
2,6
74
Fina
nce
60
7,8
94
55
2,6
80
Pro
pert
y M
anag
emen
t9
3,1
28
63
,79
6
Life
long
Fai
th F
orm
atio
n3
51
,95
43
44
,63
3
Trib
unal
29
2,6
55
32
8,8
48
Cle
rgy
Hea
lth &
Pen
sion
64
4,1
67
60
6,5
73
Indi
an M
issi
ons
67
,57
47
1,8
62
Com
mun
icat
ions
& P
ublic
Pol
icy
42
5,9
12
39
7,3
89
Cle
rgy
Edu
catio
n &
Dev
elop
men
t7
2,8
64
56
,20
1
Cle
rgy
Rel
ief
21
7,7
90
19
1,7
46
Cou
nsel
ing
& S
uppo
rt5
8,0
55
31
,71
1
Bah
ama
Mis
sion
12
,00
01
2,0
00
Chr
istia
n Li
fe C
ente
r1
9,6
80
19
,68
0
Dev
elop
men
t4
27
,81
03
95
,83
6
Par
ish
Sup
port
73
,14
07
1,8
75
Hos
pita
l Cha
plai
ns1
62
,34
01
42
,12
5
Cam
pus
Min
istr
y1
09
,92
69
5,3
02
St.
And
re's
Hom
e2
4,0
00
24
,00
0
Cat
holic
Cha
ritie
s M
aine
63
7,8
81
63
7,1
53
Res
ourc
e C
ente
r0
8,8
43
Voca
tion
Dev
elop
men
t & S
emin
aria
n Ed
ucat
ion
50
7,7
27
54
4,9
03
Pris
on M
inis
try
9,8
32
3,8
65
His
pani
c M
inis
try
99
,57
69
5,7
09
Ris
k M
anag
emen
t2
94
,14
32
84
,14
3
Saf
e E
nviro
nmen
t1
93
,28
92
29
,68
5
Pro
fess
iona
l Res
pons
ibili
ty8
0,1
00
84
,93
8
US
CC
B A
sses
smen
t4
3,1
87
42
,65
5
Tota
l6
,34
4,6
48
6,2
99
,29
6
Exc
ess
of R
even
ue O
ver
Exp
ense
s5
1,5
30
21
1,0
60
Man
agem
ent C
ompi
led
Rom
an C
atho
lic B
isho
p of
Por
tlan
d (A
Cor
pora
tion
Sol
e)C
ombi
ned
Sta
tem
ent
of A
ctiv
itie
s Y
ear
End
ed J
une
30
, 20
13
20
13
20
12
Ope
rati
ng r
even
ues
and
supp
ort:
C
olle
ctio
ns -
free
will
offe
rings
25
,73
9,7
29
2
5,7
26
,80
3
C
apita
l cam
paig
n co
ntrib
utio
ns6
90
,86
6
1,3
25
,31
9
O
ther
con
tribu
tions
and
beq
uest
s3
,53
0,2
69
2
,72
9,1
05
In
tere
st a
nd d
ivid
ends
1,9
72
,99
0
1,8
58
,01
2
P
aroc
hial
sch
ool r
even
ue1
3,0
69
,91
7
13
,00
2,3
03
R
elig
ious
edu
catio
n re
venu
es2
48
,17
3
24
3,2
71
C
emet
ery
oper
atin
g re
venu
es1
,61
8,0
06
1
,76
9,6
16
C
harg
es fo
r in
sura
nce
to a
ffilia
tes
89
0,7
44
9
39
,25
9
P
roce
eds
from
sal
e of
pro
pert
y2
,13
4,7
85
3
56
,78
0
P
aris
h fu
ndra
isin
g ev
ents
2,3
24
,41
0
2,2
90
,71
6
R
enta
l inc
ome
65
4,8
95
4
60
,57
0
O
ther
rev
enue
1,7
34
,58
2
1,7
82
,83
0
T
otal
ope
rati
ng r
even
ue
54
,60
9,3
66
5
2,4
84
,58
4
Exp
ense
s:
P
rogr
am s
ervi
ces:
Pas
tora
l8
,40
8,6
77
8
,56
7,8
10
Edu
catio
nal
15
,20
0,7
94
1
5,6
91
,64
5
Soc
ial s
ervi
ces
1,6
75
,11
5
1,7
15
,68
9
Rel
igio
us p
erso
nnel
dev
elop
men
t5
22
,53
2
52
3,0
47
Cem
eter
ies
2,0
50
,14
3
1,9
46
,73
5
Oth
er9
09
,80
7
1,0
90
,20
0
Tot
al p
rogr
am s
ervi
ces
28
,76
7,0
68
2
9,5
35
,12
6
S
uppo
rtin
g se
rvic
es:
Gen
eral
and
adm
inis
tratio
n8
,45
7,5
36
8
,07
5,1
94
Bui
ldin
g re
pairs
and
mai
nten
ance
7,9
98
,65
1
9,0
42
,67
1
Ins
uran
ce e
xpen
se -
pro
pert
y/ca
sual
ty2
,62
6,4
93
2
,64
9,3
07
Ins
uran
ce e
xpen
se -
hea
lth2
,92
8,1
89
3
,87
2,9
12
Fun
drai
sing
exp
ense
s1
,14
3,3
44
1
,09
9,6
47
Tota
l sup
port
ing
serv
ices
23
,15
4,2
13
2
4,7
39
,73
1
Tota
l exp
ense
s5
1,9
21
,28
1
54
,27
4,8
57
Exc
ess
(defi
cien
cy)
of r
even
ue
2,6
88
,08
5
(1,7
90
,27
3)
Pen
sion
/hea
lth li
abili
ty a
djus
tmen
ts1
0,1
95
,19
5
(9,0
17
,95
7)
Pro
pert
y an
d eq
uipm
ent
(1,7
50
,10
9)
(2,2
47
,22
1)
Pro
visi
on fo
r U
ncol
lect
ible
Ple
dges
0
(3,1
88
,00
0)
Gai
n/(lo
ss)
on in
vest
men
ts5
,68
8,0
11
(4
,18
1,1
60
)
Cha
nge
in u
nres
tric
ted
net
asse
ts1
6,8
21
,18
2
(20
,42
4,6
11
)
Net
ass
ets
July
17
8,5
41
,11
4
98
,96
5,7
25
Net
ass
ets
June
30
95
,36
2,2
96
7
8,5
41
,11
4
Man
agem
ent C
ompi
led
Rom
an C
atho
lic B
isho
p of
Por
tlan
d (A
Cor
pora
tion
Sol
e)C
ombi
ned
Sta
tem
ent
of F
inan
cial
Pos
itio
nJu
ne 3
0, 2
01
3 a
nd 2
01
2
20
13
20
12
Ass
ets:
Cas
h an
d ca
sh e
quiv
alen
ts9
,89
4,1
92
8,8
54
,28
5
Inv
estm
ents
10
6,8
18
,41
59
8,2
35
,70
0
Due
from
affi
liate
d or
gani
zatio
ns4
51
,95
21
85
,13
5
Ple
dges
rec
eiva
ble,
net
of r
eser
ve fo
r
unc
olle
ctib
le p
ledg
es6
,93
0,8
54
10
,78
9,4
46
Acc
ount
s re
ceiv
able
91
4,2
44
87
6,2
92
Rea
l Est
ate
Hel
d fo
r In
vest
men
t2
,74
3,7
34
0
Acc
rued
inve
stm
ent i
ncom
e4
5,2
07
49
,07
3
Oth
er a
sset
s1
,39
1,7
91
1,4
50
,15
9
Ben
efici
al in
tere
sts
in tr
usts
hel
d by
oth
ers
3,3
01
,15
74
,53
9,5
29
Tot
al a
sset
s1
32
,49
1,5
46
12
4,9
79
,61
9
Liab
iliti
es:
Acc
ount
s pa
yabl
e an
d ac
crue
d ex
pens
es2
,18
4,5
46
2,4
79
,09
9
Oth
er li
abili
ties
2,1
04
,10
91
,97
6,9
92
Ins
uran
ce c
laim
s pa
yabl
e1
,83
5,8
62
2,1
06
,92
0
Res
erve
for
insu
ranc
e cl
aim
s in
curr
ed b
ut n
ot r
epor
ted
3,0
42
,98
63
,28
1,3
99
Acc
rued
pen
sion
obl
igat
ions
17
,56
8,1
03
20
,79
7,5
42
Acc
rued
oth
er p
ost-
retir
emen
t ben
efits
9,0
41
,30
01
4,1
85
,58
2
Def
erre
d re
venu
e1
,32
4,9
87
1,5
55
,66
7
Am
ount
s he
ld fo
r ot
hers
27
,35
75
5,3
04
Tot
al li
abili
ties
37
,12
9,2
50
46
,43
8,5
05
Net
ass
ets:
Unr
estri
cted
13
,32
7,4
22
-55
8,2
71
Unr
estri
cted
- d
esig
nate
d2
,51
4,1
93
2,4
40
,43
7
Unr
estri
cted
- li
mite
d in
use
- c
emet
ery
p
erpe
tual
car
e1
2,5
78
,73
61
2,3
64
,10
9
Tem
pora
rily
rest
ricte
d3
1,5
96
,18
73
0,9
68
,53
6
Per
man
ently
res
trict
ed3
5,3
45
,75
83
3,3
26
,30
3
Tota
l net
ass
ets
95
,36
2,2
96
78
,54
1,1
14
Tota
l lia
bilit
ies
and
net
asse
ts1
32
,49
1,5
46
12
4,9
79
,61
9
Man
agem
ent C
ompi
led
FIN
AN
CIA
L I
NF
OR
MA
TIO
N
