Every parish will be audited every three years in new program
Robert Delaney of The Michigan Catholic
Published September 21, 2007
Detroit – Every parish and school in the Archdiocese of Detroit will face a financial audit at least once every three years under a new program to begin by the end of 2007.
And a hotline will be established so that people can report suspected financial abuses to archdiocesan officials.
While the archdiocese has not experienced cases of embezzlement on the scale that have made headlines in a number of other dioceses, the new limited-scope audit program will seek to ensure that sufficient financial controls are in place to see to it that it never does.
"It seemed like an opportune time to put in place pro-active measures to ensure we won't be surprised in the future," said Daniel Oliver, director of the archdiocesan Department of Finance & Administration.
Oliver outlined the program for the Archdiocesan Pastoral Council Sept. 11, having made similar presentations about it earlier this year to the other consultative bodies of the archdiocese – the Presbyteral Council, Council of Vicars, College of Consultors and Financial Review Committee.
In the past, full audits have been done whenever there is a change of pastor or when problems have arisen indicating the need for one. The new limited-scope audits will not be as comprehensive and will focus on a narrower time period – three to six months.
But a limited-scope audit could turn into a full audit if serious problems are discovered, Oliver said.
The limited-scope audits are expected to take one to three days to complete. The Finance & Administration Department's four-person audit staff will be increased to nine to handle the additional work.
Oliver said the audits will look at cash receipts and disbursements, and the internal controls over both. The procedures involved in how a parish handles its offertory collection, or a school handles its tuition collection, as well as capital campaign donations will be examined. Auditors will be looking for congruence between the amounts received and the amounts deposited.
Records will be examined to make sure other donations received are deposited, Oliver continued.
He said there would be a detailed review of a parish's primary check register, and that all parish-related checking accounts must include the pastor among the authorized signers to ensure easy access to bank records when requested.
Of particular interest, Oliver said, will be checks made out to cash and to individuals, especially non-payroll checks to staff for out-of-pocket expenses, to make sure supporting documents are in order.
Focus on finance
Limited audits to begin by the end of 2007 will include review of:
• Procedures for handling collections.
• Deposit procedures.
• How donations match up with deposits.
• Employee reimbursements, tax and benefit records.
• Loan and vendor payments. Two other measures in the works:
• Hotline for reporting embezzlement.
• Ban on parish credit cards. |
In a separate move, he said revised guidelines due out by sometime in early 2008 will forbid parishes to have credit cards in the parish name.
Auditors will check to make sure employee withholding taxes are being sent to the Internal Revenue Service on a timely basis, and also that employee wage reports are being regularly filed with the Michigan Catholic Conference, which coordinates health care and pension programs for Church employees.
In addition, he said auditors will be checking to make sure only eligible employees are being covered by benefits.
Auditors will also be looking at whether parishes are making payments on any loans they have through the archdiocesan Loan Deposit Program, and whether other vendors are being paid.
Another question is whether the parish is in compliance with the canon law requirement regarding a stewardship commission. "It is very important every parish have a working stewardship commission," Oliver said.
Yet another question is how information regarding a parish's financial situation is disseminated to parishioners. "Are you really letting the people in the pews know what's happening with parish finances?" Oliver asked.
The planned hotline, called the Ethics Point Program, will allow any person who suspects embezzlement to report it to the archdiocese anonymously by either telephone or e-mail "24 hours a day, seven days a week, 365 days a year." Oliver explained that the program is structured so the caller can remain anonymous, but also his department will be able to carry on a continuing dialogue with the person.
He acknowledged that a great many calls will turn out to be nothing more than someone not liking something going on in a parish or allegations that turn out to be unfounded, but said getting early notice of real problems should make it worthwhile sorting through all those.
"This hotline will serve a dual purpose – not only will it allow the reporting of problems, but its existence should also deter people from even considering such violations," Oliver said.
As to which parishes will be audited when, he said pastors would receive "not much" advance notice that an auditor will be showing up, and that certain records should be available for review. But parishes that have been late in sending in their financial reports can expect to be among the earliest to be audited.
"If reports are not coming in on a timely basis, that's a red flag to us that something may be going on," Oliver remarked.
Msgr. John Zenz, moderator of the archdiocesan Curia, said all of the archdiocesan consultative bodies had expressed their support for the limited-scope audits to Cardinal Adam Maida.
He predicted that the result of most parish audits would be to "strengthen the confidence of the pastor that he's been a good steward of the funds entrusted to him."
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