2011 Annual Report – Statements

| March 1, 2012 | 0 Comments

THE ARCHDIOCESE OF ST. PAUL AND MINNEAPOLIS

Notes to condensed financial statements for the years ended June 30, 2011 and 2010

Organization

Condensed Statements - Click to enlarge

The St. Paul and Minneapolis archdiocese is an ecclesiastical division of the Roman Catholic Church comprised of 12 Minnesota counties. It was established in 1850 and elevated to an archdiocese in 1888.

The Archdiocese of St. Paul and Minneapolis (the “Archdiocesan Corporation”) was incorporated under the laws of the State of Minnesota as a religious corporation in 1883. The Archdiocesan Corporation exists as part of the jurisdiction of its archbishop over the spiritual and temporal affairs of the ecclesiastical division. While the Archdiocesan Corporation owns temporal goods (personal and real property) and conducts spiritual and charitable activities of its own, it does not own parishes, schools, and other separately administered and organized operations of the Roman Catholic Church within the geographic area.

Basis of presentation

The financial statements include all administrative and program offices and departments of the Archdiocesan Corporation. The financial statements do not include the assets, liabilities and operations of the parishes, schools, and other separately incorporated and administered operations of the Roman Catholic Church within the archdiocese. The Archdiocesan Corporation is related to these organizations and entities through some common board members.

The financial statements recognize restrictions on certain net assets of the Archdiocesan Corporation. Where contributions carry temporary or permanent restrictions on use, the related net assets are carried separately.

The Archdiocesan Corporation secures coverage and comprehensive, uniform risk protection for affiliated entities throughout the archdiocese, including parishes and schools through an activity known as the Archdiocesan General Insurance Program. The program has a separate committee of advisors. In addition to the accounts identified in the condensed financial statements, the program has $13.5 million of funded reserves that are co-invested with other funds of the Archdiocesan Corporation. While assets and reserves for the program are shown on the financial statements of the Archdiocesan Corporation, they are held for the benefit of the program and its participants.

Financial statements

The financial statements of the Archdiocese of St. Paul and Minneapolis for the above periods were audited by independent certified public accountants who rendered unqualified opinions on the financial statements. The accompanying condensed statements of financial position and activities are prepared from the audited financial statements but, in the interest of brevity, do not contain a similar level of detail and are not accompanied by complete explanatory footnotes. Accordingly, the opinion of the independent certified public accountants is not presented.

Other related entities

Benefits

The Archdiocesan Corporation administers several independent activities that are organized as trusts for pensions and other benefits for affiliated entities throughout the archdiocese. There are individual trustee boards for these functions, namely the Pension Plan for Priests of the Archdiocese of St. Paul and Minneapolis, Pension Plan for Lay Employees of the Archdiocese of St. Paul and Minneapolis, and the Archdiocese of St. Paul and Minneapolis Medical Benefit Plan Trust. At December 31, 2010, these plans had actuarial present value of accumulated plan benefits of approximately $193 million which is calculated at an interest rate of 8 percent; earlier years were calculated at 9 percent. The value of the underlying invested assets were adversely effected by the severe general market decline which began in mid-calendar 2008 and partially corrected in calendar 2009 and 2010, such that the pension plans were underfunded by approximately 40 percent at Dec. 31, 2010.  The funding obligation is of a multi-employer nature and is expected to be satisfied by 2025. Current contributions and cash investment income are adequate to fund current obligations. The contribution rate to pension plans was significantly increased effective July 1, 2010. Effective Jan. 31, 2011, participation in the Lay Employees Pension Plan was frozen.

Other programs

The Archdiocesan Corporation acts as a conduit for special collections in the parishes designated by the U.S. Conference of Catholic Bishops (“USCCB National Collections”) or for local purposes. During 2011, $5.1 million was contributed by parish communities for such collections and sent to the Archdiocesan Corporation for remittance. This amount includes $3.4 million for retirement of debt at the Cathedral parish resulting from building restoration.

The Growing In Faith Campaign was initiated in 2001 and is currently in the collection phase. While the Archdiocesan Corporation is not a direct beneficiary of the campaign, its development department manages the campaign effort and a separate cash function. The goal of the campaign was $115 million and as of June 30, 2011 approximately $110 million was pledged which, after allowances and discounts, had an estimated realizable present value of $90 million. Pledges of approximately $210,000 were collected in 2011 and $1.6 million is expected subsequent to June 30, 2011.

The Archdiocesan Corporation acts as agent for The Catholic Spirit in collection and transmittal of an assessment on parishes for subscriptions to the newspaper. During 2011, $1.1 million was paid to the newspaper.

Commitments

The Archdiocesan Corporation has entered into a number of contracts with lending institutions to assist affiliated parishes and schools with credit for facility additions. This includes loan guarantees that aggregate approximately $57 million at June 30, 2011.

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