Explanation of financial report

By Peter McNamee, Finance Officer
Diocese of Helena

This issue of the Montana Catholic contains a summary comparison of the financial reports for the fiscal years that ended June 30, 2002, 2003, 2004, and 2005. Some items on the reports require explanation.

Each of the six funds has cash accounts, even though there are only two checking accounts. This causes some accounts to have an item called “Checks Written In Advance of Deposits.” Each year, at the end of June we write numerous checks for National Collections, Deposit and Loan Fund interest and other year-end items. The cash needed for this is difficult to estimate. In early July, after transferring cash as necessary from the first two items listed under “Assets,” we mail the checks. In some years, there is a large cash balance at the end of June because there are building projects in process that require large payments early in July.

The contributions receivable asset reflects DOP pledges and grant award notifications that apply to future years.

Our investment portfolio suffered because of the downturn in the market over the years. Recently, the remaining portfolio is increasing because of the market.

The beneficial interest in annuities held for the Foundation for the Diocese of Helena (FDH) includes the amounts that will transfer to the FDH upon the death of the annuitant.

Deferred revenue and support are mainly camp fees paid for Legendary Lodge camps in July and August.

Unconditional promises to give are grants from the diocese to others scheduled for payment over a number of years.

The unfunded incurred but not reported (ibnr) liability reflects an estimate of claims to our self-insured health plan that were for services before July 1 and paid in subsequent months that are not covered by the current plan reserves. We had unforeseen large claims in late FY 2004-2005. Since then, we have restructured the plan and are rebuilding the reserves.

“Annuity Obligations” are the amount of the charitable gift annuities that are estimated to be due to annuitants based on life expectancy. Funding for this obligation is met by setting aside a portion of each gift annuity received. The remainder is the future estate planning gift to the diocese.

The accounting standards require that we report the long-term future cost of “Post-Retirement Benefits.” These are medical costs associated with some laypersons who retire from the Diocese of Helena at age 65 with 20 years of service, and for senior status priests (the bulk of the cost). These costs are funded from annual income. Therefore, if we did not have to report this benefit liability, the “Total Net Assets” would increase by the “Post-Retirement Benefits” amount.

This report and additional information is available on the diocesan website www.diocesehelena.org/finance.

If you have comments on this report, or would like further clarification, please write to Peter McNamee, Diocesan Finance Officer, PO Box 1729, Helena MT 59624-1729 or e-mail to pmcnamee@diocesehelena.org. I will consolidate the information and respond on the website or in the Montana Catholic.

Published in The Montana Catholic, Vol. 22, No. 1, January 20, 2006.