A report from an independent commission of laity has recently scorched the fiscal management of the Roman Catholic Diocese of Wheeling-Charleston, West Virginia. The diocesan bishop was rather unceremoniously retired by the Vatican after being credibly accused of sexual improprieties and financial mismanagement.   Pope Francis appointed an Apostolic Administrator (temporary manager of the diocese) to review the activities of the retired bishop. Since this is a management blog, the harassment charges will be put aside for others more qualified to deal with that subject.

Financial mismanagement of a not-for-profit organization is fair game here.  The Washington Post reports the bishop was able to spend an exorbitant amount of money on travel, luxury hotels and gifts. [1]  While the amount of the gifts seems staggering (over $350,000), one must remember the bishop had been in authority for over thirteen years.  It is also common for dioceses to make gifts to other prelates on occasions.   For example, the Archbishop of the province, William Lori received $5,000 at his installation as Archbishop from the bishop in question.   The odd thing is how the payments were made.  The bishop personally wrote the checks to deceive the recipients. The diocese not only reimbursed the bishop, but “grossed-up” the reimbursement for income tax purposes. Being fair to the bishop on the gift issue doesn’t explain his other plain extravagances such as the $4.6 million spent to renovate the bishop’s residence.

Each Catholic diocese must have a Finance Council that approves larger expenditures and sets the salary for the bishop.  The independent report described this body as “very passive”.   An active finance council may have stopped this financial carnage.   Eternal vigilance over fiscal management is needed in the NFPs as many of the checks and balances found in the corporate world do not exist there.  The lack of action by the finance council was compounded by the climate of fear the bishop had allegedly instilled in his staff.  In short, no one was would stand up to him.  This too had disastrous consequences.  

Sadly, this lack of fiscal management is repeated again and again in church chanceries across the United States.  Make no mistake, this is not only an issue for the Catholic Church, it is widespread in other denominations as well.[2] Financial watchdogs may grow complacent when dealing with management they trust.  They must remember the most financial damage is done by those that are trusted.  Who is more trustworthy than the bishop?  No responsible NFP manager should object to financial oversight or audit.  It comes with the territory.  An NFP manager that objects to fiscal oversight and transparency is the first sign of financial trouble at the organization. My final advice to those tasked with financial oversight for any church or other NFP entity is: semper vigilans.

[1] https://www.washingtonpost.com/investigations/a-wva-bishop-spent-millions-on-himself-and-sent-cash-gifts-to-cardinals-and-to-young-priests-he-was-accused-of-mistreating-confidential-vatican-report-says/2019/06/05/98af7ae6-7686-11e9-b3f5-5673edf2d127_story.html?utm_term=.f2d555d8540c (accessed June 14,2019)

[2] For instance, see https://nypost.com/2018/04/07/feds-probe-80m-construction-scandal-at-church-wrecked-on-9-11/ (accessed June 14,2019) as just one example.  Simply do an internet search for “church fraud”.  My search yielded approximately 3.3 million hits.