Financial Safeguards

Sound Business Practices, Resounding Mission

Financial Controls in the Diocese of Youngstown

The Diocese of Youngstown takes seriously its responsibility to safeguard the financial contributions of the People of God. That responsibility plays out every day, in our diocese’s parishes, schools, and diocesan ministries in service to our six counties, sustained through the financial generosity and active participation of the Faithful.

In the Diocese of Youngstown, a robust spirituality of stewardship is matched by stringent, uniform, and transparent financial controls for diocesan offices, parishes, schools, and entities. All entities of the Diocese of Youngstown must adhere to its detailed Financial Procedures and Controls Manual, which can be found, along with additional reporting procedures and forms, at https://doy.org/financial-manual/. The Diocese of Youngstown’s Finance Office assists diocesan parishes and entities in their execution of these measures and oversees a vigorous system of compliance.

Every member of the Faithful has a baptismal right and responsibility to participate in the mission of the Church, with an expectation of transparency about the finances and financial controls of one’s own parish and other diocesan entities. Here are some of our safeguards, drawn from the more detailed Financial Procedures and Controls Manual.

Parish Collections

Tamper-resistant locked bank bags: The diocese has provided each parish with multiple tamper-resistant bags, one for each weekend Mass. This is in addition to a visible collection process involving the entire assembly and multiple volunteers. Bags are stored securely in a locked fireproof safe and/or delivered for secure storage at a bank until counted, and then used again for transport to the bank after counting.

Parish Collections – Count Team/Reporting: Parish collections (including Mass collections and fundraisers) are counted by a “count team” of no less than three unrelated individuals, excluding parish employees, parish bookkeepers, and the parish pastor/administrator. Count teams follow a detailed procedure that includes opening collection bags together in the presence of a staff person, counting and verifying collections as a team using standard paperwork, filling out a deposit slip verified by the parish staff, and sealing money and the deposit slip in a tamper-resistant bag for transport to the bank. The bookkeeper records all contributions into parish software and balances to the bank deposit. All collections are listed in the parish bulletin.

Training, Orientation and Reinforcing Internal Controls

Transfer of Financial Records for new pastors/administrators: Upon the appointment of a new pastor or parish administrator, a diocesan parish auditor meets with both the outgoing and incoming pastor and reviews the parish’s financial books.

Periodic Mandatory Meeting for all pastors/administrators, parochial vicars, administrators, diocesan pastoral associates, and bookkeepers: to review internal financial controls policies and procedures, including the permission-to-spend process, parish capital campaigns and all parish accounts

Annual Bookkeepers Meeting: The Diocesan Chief Financial Officer, Compliance Officer, and Finance Staff meet annually with parish and high school bookkeepers, sometimes including Senior Staff Accountants from our external auditing firm. Meetings consist of reviews of internal controls, permission-to-spend procedures, and timeframe for completion of audits/reviews.

Financial Controls, Oversight and Transparency

Parish Finance Council: By Canon Law (Church Law), every parish must have a Finance Council. The Finance Council consists of 2-7 persons, not related to the pastor/administrator, who serve three-year terms (once renewable). The Finance Council works with the pastor/administrator to develop the parish’s annual budget and long-range financial forecasting, including contingencies for unexpected financial challenges and opportunities. The Finance Council meets throughout the year to evaluate the financial condition of the parish by analyzing revenues and expenses against the budget for revenues and expenses and providing a thorough review of the parish’s balance sheet, which must be inclusive of all parish financial assets. The Finance Council also performs the reporting and oversight functions noted below.

Financial Condition Reports to the Parish: The Finance Council provides parishioners with semi-annual and annual written reports on the financial condition of the parish. The reports include a summary of revenues and expenses as well as a summary of the balance sheet.

Segregation of Financial Duties: Parish financial offices in the Diocese of Youngstown should practice a segregation of financial duties to ensure accountability. Custody of assets should be separated from the record-keeping of those assets, and authorizing transactions should be segregated from recording the transactions. The Financial Procedures and Controls Manual gives detailed suggested guidelines for parishes and diocesan entities to follow for all transactions.

Bank Accounts: Parishes and other diocesan entities should limit the number of bank accounts to what is absolutely required.

Chart of Accounts: Each parish and diocesan entity should establish a clear and defined chart of accounts which details income and expense categories allowing for accountability. The chart of accounts should include enough account level detail to sufficiently complete the annual parish financial report.

Permission to Spend Forms: As an additional layer to normal financial controls, parishes and diocesan entities must complete a “permission to spend form” for expenditures $10,000 and above, completed by the pastor/administrator and parish finance council and sent to the diocesan finance office for approval by the bishop, vicar general, and diocesan chief financial officer prior to beginning the relevant project.

Capital Expenses and Bidding Process: For capital projects, in addition to a “permission to spend form,” parishes and diocesan entities must establish a competitive bidding process that includes no less than 3 bids.

Accounting Procedures and Auditing: Each parish and diocesan entity is to follow accounting procedures established in the Financial Procedures and Controls Manual and complete the required forms.

Diocesan Parish/School Auditors: The Diocese of Youngstown has two diocesan auditors on staff to evaluate, monitor and report on internal financial controls for all parishes throughout the diocese. Audits are regularly performed at each parish every three years, or more frequent as deemed necessary.

Diocesan Finance Council: As with parishes, Canon Law (Church Law) mandates that all Catholic dioceses establish a Diocesan Finance Council (DFC) over which the diocesan bishop or his delegate presides, with at least three members of the Christian faithful who are experts in finance and civil law appointed by the bishop to the DFC for five-year terms. The Diocese of Youngstown DFC also includes the Vicar General, Chief Financial Officer, and appointed religious DFC members, and holds meetings four times per year. The DFC is responsible for the preparation of the diocesan budget as to income and expenses for the year and examines an account of revenues and expenses at the end of the year. The Bishop or his delegate presents a Statement of Income & Expenses and balance sheet to the DFC for all entities under his jurisdiction after the close of each year.

Diocesan Audit: Annually, the Diocese of Youngstown engages in an independent audit of its financial operations, which is posted to the diocesan website.

Diocesan Compliance Officer: The Diocese of Youngstown’s Compliance Officer oversees adherence to diocesan policies, including monitoring the Whistle Blower Policy.

Whistleblower System: The diocese uses VERIFI, a third-party system to facilitate confidential and transparent employee reporting of possible financial and operational violations or irregularities.

 

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