Diocese of Wheeling-Charleston Releases 2020 Audit; Reports ‘Roller Coaster’ of a Fiscal Year
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Read the Diocese of Wheeling-Charleston’s Fiscal 2020 Audit here
Read Bishop Mark Brennan’s letter on the fiscal 2020 audit here
WHEELING -- Despite a tumultuous 2020 fiscal year due to the COVID-19 pandemic, the Diocese of Wheeling-Charleston took the necessary steps to keep its finances stable, according to an independent audit released Friday.
That audit was just the second full audit released to the public in the diocese's history, spokesman Tim Bishop said. The first was released last year. The diocese had released financial statements before that, but never a full audit.
In his letter to the diocese about the audit, the Most Rev. Mark Brennan, bishop of the Wheeling-Charleston Diocese, likened the 2019-20 fiscal year to "the roller coaster rides I took as a youth: lots of ups and downs."
The pandemic mostly was to blame for that. Its early months hammered the diocese's stock portfolio and as oil prices fell, the money it earned from mineral revenue through West Texas oil reserves it holds did as well. According to the audit, the diocese's mineral rights investments fell by about $3 million and securities investments fell by about $1.5 million.
By the end of the fiscal year, total assets fell from $422.5 million as of July 1, 2019 to $403.5 million as of June 30, 2020, a loss of $19 million.
According to Brennan, the diocese tightened its belt in response. It combined departments, reduced staff by attrition, offered early retirement to eligible employees and permanently closed pastoral centers in Huttonsville and Kearneysville. Only the St. John XXIII Pastoral Center in Charleston remains open.
That helped the diocese reduce its liabilities between the 2019 and 2020 fiscal years. Those went from $70.25 million in 2019 to $69.59 million in 2020. Part of that reduction came from cutting nearly $7 million from lines of credit. Bishop said the diocese took advantage of favorable market conditions to pay down $6.1 million of its debt. The rest of that total came from a reduction in the parish line of credit.
Two of the larger numbers among the diocese's liabilities are a $5 million "promise to give" to Wheeling University and a nearly $2 million Paycheck Protection Program loan. The "promise to give," according to Brennan, is actually to be spaced out in yearly installments between 2021-25. Yet the promise must be reported in the full amount in the fiscal year in which it was made. The diocese made $2 million available to the school for the 2020 fiscal year.
The PPP loan was among many that Roman Catholic dioceses applied for around the United States. A recent Associated Press investigation stated that, in total, dioceses received at least $1.5 billion in PPP loans to cover expenses after the pandemic caused parishioner donations to slump. According to the AP report, the catastrophe church leaders feared did not come to pass.
Church officials responded to the report saying the loans allowed them to continue their charitable missions without dipping into those funds to keep employees on the payroll.
Bishop said the diocese used its PPP loan in much the same way, keeping employees on payroll and with health insurance even though facilities were closed for weeks.
He also said that the Wheeling-Charleston Diocese also saw a sharp spike in the need for its charities like food pantries and other social services.
"I can tell you the increase in demand ... was immense," Bishop said. "You had people coming for help that never had to come for help before. A lot of our churches throughout the state, especially in the rural areas, they really had to up their food pantry missions."
In his letter, Brennan said that because revenues have rebounded due to favorable stock earnings later in the year, the diocese will not need to apply for further PPP assistance, though it will help parishes, schools or charities that need that help to apply for it.
The move to releasing full annual audits was a response to the scandal surrounding ex-bishop Michael Bransfield. An investigation into Bransfield's malfeasance found that the disgraced ex-bishop spent lavishly, much of it on himself. There was $6 million in renovations at three of his properties, $2.3 million in travel expenses including first-class flights, $225,000 in personal expenses and $62,000 in jewelry.
There also was more than $21 million funneled from Wheeling Hospital to a "Bishop's Fund" that Bransfield started. The audit released Friday accounted for the diocese's attempts to resolve some of those problems.
It dissolved the nearly $5.3 million left in the Bishop's Fund and used it to help purchase Wheeling Hospital's interest in Diocesan Real Estate, formally separating the two entities. It sold the former bishop's residence for $1.2 million and canceled the lease on his retirement home in Wheeling. Bransfield also was ordered to pay back $441,000 of the diocesan funds he used for personal expenses.
That payment and the proceeds from the sale of the residence were put in a restricted fund for victims of sexual abuse and harassment.
Bishop said the release of these annual audits will be a common occurrence for the diocese into the future, part of Brennan's commitment to transparency.
"For Bishop Brennan, giving this information and sharing it with the faithful is vital to transparency," Bishop said. "When he was first installed as our bishop, he committed himself to being transparent and this is the culmination of that.
"We did it last year, we're doing it again this year and we're going to be doing it going forward," he added. "You can't say that you're going to be transparent and not be transparent. This is one step of making good on his promise."