1. D IOCESAN F INANCE U PDATE Diocese of St. Petersburg January 15, 2014

2. Bishop Lynch Opening Remarks

3. Phil Signore Executive Director, Finance Tonight’s Agenda: Diocesan Financial Update  Financial Position  Results of Operations  Forward in Faith Parish Finance Councils  Primary Responsibilities  Current Issues

4. Nancy Ridenour Chair, Diocesan Finance Council

5. Audited Financial Statements are available online at www.dosp.org by clicking on: Offices Finance Annual Audits quick linkwww.dosp.org

6. Financial Position ($000) 6/30/20136/30/2012 Assets: Cash $ 834 $ 3,076 Investments Held in Trust 100,600 92,645 Receivables 24,385 23,010 Land, Buildings, and Equipment, Net 38,759 39,547 Other Assets 2,446 2,677 Total Assets $ 167,024 $ 160,955 Liabilities: Payables $ 6,682 $ 10,545 Bank Debt 8,720 9,271 Deposits Held in Trust 79,999 72,485 Reserves for Insurance Claims 4,165 4,213 Total Liabilities 99,566 96,514 Net Assets: Unrestricted 47,826 44,786 Temporarily Restricted 9,791 9,837 Permanently Restricted 9,841 9,818 Total Net Assets 67,458 64,441 Total Liabilities and Net Assets $ 167,024 $ 160,955

7. Results of Operations ($000) Year Ended 6/30/20136/30/2012 Annual Pastoral Appeal & School Assessments $ 13,209 $ 12,046 Contributions and Bequests 878 1,407 Insurance Premium Revenue 21,593 21,415 Earnings on Investments & Loans 8,112 857 Fees, Sales, and Program Revenues 5,101 4,710 Gain on Sale of Land 155 3,716 Total Support and Revenue 49,048 44,151 Ministry Expenses 9,844 16,104 Catholic Formation & Education 4,494 3,732 Social Services 1,055 1,130 Clergy Development 2,180 2,303 Parochial Services 1,081 1,043 Insurance Programs 22,957 23,938 Other Program Services 2,956 1,906 Total Program Services 44,567 50,156 Diocesan Administration 1,464 1,244 Total Expenses 46,031 51,400 Change in Net Assets $ 3,017 $ (7,249)

8. Diocesan Savings & Loan Results of Operations ($000) Year Ended 6/30/20136/30/2012 Investment Income $ 6,341 $ 96 Interest Received on Loans 733 919 Total Support and Revenue 7,074 1,015 Interest Paid on Deposits 1,213 1,158 Interest Paid on Bank Debt 75 77 Operating Expenses 463 475 Provision for Loan Losses 329 (165) Total Program Services Costs 2,080 1,545 Change in Net Assets 4,994 (530) Net Assets, Beginning of Year 807 1,337 Net Assets, End of Year $ 5,801 $ 807

9. Diocesan Insurance & Benefits Trust Results of Operations ($000) Year Ended 6/30/20136/30/2012 Insurance Premium Revenue $ 23,337 $ 23,092 Investment Income 174 159 Total Support and Revenue 23,511 23,251 Insurance Claims Expense 15,725 15,287 Insurance Premium Expense 4,877 4,936 Other Operating Expenses 2,081 1,963 Provision for Doubtful Accounts 354 1,544 Total Program Services Costs 23,037 23,730 Change in Net Assets 474 (479) Net Assets, Beginning of Year 8,774 9,253 Net Assets, End of Year $ 9,248 $ 8,774

10. FORWARD IN FAITH F RANK M URPHY S ECRETARY F OR C HRISTIAN S ERVICE

11. The Campaign will address vital, and in some cases long- postponed, capital and programmatic needs, including:  Catholic Education:$29 Million  Seminarian and Retired Priest Support: $ 8 Million  Parish Needs:$10 Million  Campaign Costs:$ 3 Million For with God nothing shall be impossible. (Luke 1:37) Forward in Faith: $50 Million Campaign 11

12. Forward in Faith: Parish Needs of $10 Million Individual parish needs will be addressed through this campaign. Block 1 Parishes have developed cases for support around a variety of capital and programmatic needs, including:  Expanding faith formation programs for parishioners  Repaving church parking lot  Replacing or restoring parish center roof  Supplementing tuition assistance available through the parish  Construction of a memorial prayer garden 12

13. Forward in Faith: Block 2 13 AprilMay-JulyAugust-October Block 2 Kickoff Meeting Date TBD During this meeting we will review the campaign plan and processes in greater detail. Campaign Preparation Changing Our World campaign directors will meet with all block 2 parishes to prepare for the active phase of the campaign. Activities will include: Assembling parish leadership teams; Review and approve parish rosters; Developing parish case elements; and, Approve all campaign communication materials. Campaign Implementation Changing Our World directors will work closely with parishes to implement the campaign plan.

14. Forward in Faith: Our Progress 14 Bishop’s Leadership Phase Pledges$ 3,132,146 Block 1 Parish Phase Pledges$ 9,691,565 Block 2 Parish Phase Pledges$ 5,275 Option C Pledges$ 1,106,993 Total Pledged to Date$13,935,979

15. Phil Signore Executive Director, Finance Parish Finance Councils Primary Responsibilities Current Issues

16. Diocesan Norms for Parish Finance Councils  Composition of Parish Finance Councils (in addition to pastor): Fewer than 500 families: at least 3 members. 500 to 1500 families: at least 5 members. More than 1500 families: at least 7 members.  Members must be: Qualified in finances and/or business. Registered parishioners, and not employees.  Acts of extraordinary administration ( Real estate transactions, legal actions, acceptance of non-cash gifts such as securities or ownership interests, any transaction > $40,000). Pastors shall: Consult the Parish Finance Council. Petition the Bishop.  At least four meetings annually with written minutes (financially challenged entities must meet monthly).

17. Diocesan Norms (continued) Provide advice and assistance to pastor regarding:  Financial reports to bishop.  Budgets (must approve budgets for financially challenged entities).  Annual reports to parishioners.  Acquisitions & sales of land.  Financial planning.  Incurring & repayment of debt, & resolution of unpaid debts & budget deficits.  Educating parishioners on financial stewardship.  Personnel administration, staffing needs, salary scales.  Tax compliance and regulatory matters.  Transactions > $25,000 and leases > one year.

18. Internal Controls  Segregation of duties.  Review cash account reconciliations at least annually.  Mandatory vacation and rotation of duties  Timeliness of deposits  Agreed Upon Procedures  Conflicts of Interest

19. Fundraising & Capital Campaigns Forward in Faith Capital Campaign:  No new parish capital campaigns for 5 years  Exemption available if capital needs exceed 2 ½ times your annual offertory.  Option C exemption: Parish guarantees 80% of FIF goal Parish hires own fundraising counsel Parish produces own materials Diocesan Campaign Processing Office manages pledge & remittance program

20. Gift acceptance  Only the Bishop has the authority to accept a bequest.  Gifts other than cash, check, or credit/debit card must be approved in advance by the Bishop’s Office. Examples are gifts in-kind, securities, real estate, ownership interests…  Documentation of donor restrictions must be maintained.  Gifts may not be accepted if they: Seem to be inappropriate, not in DOSP’s best interest, could damage the reputation of DOSP, or from an illegal or questionable source. Create excessive administrative procedures, or obligations. Create a conflict of interest.

21. Credit Cards  Use of a credit card is a borrowing and should have the same authorization as a borrowing (pastor approval).  Pastor should always document his approval of credit card bill.  No personal use of church credit cards (cause for disciplinary action up to and including termination).

22. Options for serving liquor:  Hosting  Selling it or having a vendor sell it  Absolutely no BYOB’s by parish, school, or third party groups. Please see the Liquor Liability Policy published on the Insurance Office web page.

23. Schools and Centers  Budgets  Tuition rates  Teacher contracts/positions/salaries

24. Other  All entities are required to consult with the Finance Office (Executive Director) before hiring a bookkeeper/accountant, or contracting with an organization to perform bookkeeping, accounting, or other financial functions.  Tonight’s presentation is available online at www.dosp.org by clicking on: Offices Finance www.dosp.org Annual Finance Update 1/15/14 quick link

25. Q UESTIONS ?