The following is the text of a letter I sent to Ted Sherman, and investigative reporter for NJ.Com, on May 2, 2022:
Dear Mr. Sherman:
By way of introduction I am a CPA and an assistant professor of accounting practice at Moravian University in Bethlehem PA. Among the courses I teach is Accounting for Not-For-Profit Entities. Over the course of my career I have served in several capacities in NFP organizations including being the Finance Officer (CFO) of a Catholic Diocese in New Jersey.
I thought your article was a very fair and balanced treatment of a terrible subject, and you are to be commended for your work. I am writing about a collateral issue that you might want to consider for a future article: the absence of transparency in financial affairs of large religious organizations. For instance, your article mentions the Roman Catholic Diocese of Camden will be setting up a payment fund of $87.5 million. This will take four years but I have found only limited disclosure about how the Diocese will obtain this amount of money. Do parishioners of the diocese know that their donations will go to partially fund this litigation settlement? I suspect not. NPR has reported that by 2018 $3 billion in liability had already been incurred to pay for the mismanagement of this scandal by Catholic bishops. The amount will only continue to skyrocket.
Sadly, many dioceses do not even bother to publish financial information for fear of what parishioners would say. This is all the more the shame since in many religious traditions adherents can only “vote” in the management of their religious organizations through two media: their feet (by leaving) and their wallet (their contributions). The lack of financial transparency hinders the exercise of the latter.
As sad as it sounds, I have long advocated large religious organizations (say, for organizations with gross receipts in excess of $1 million per annum) be required to complete and file Form 990 with the Internal Revenue Service. The link to the most recent form can be found here. I understand we as a society do not want the federal government mucking around in religious matters, but the Form 990 provides critical information for any member of a religious organization. It not only includes financial disclosures but also provides information about internal controls over assets of the organization. Unfortunately, internal controls are often an after-thought in NFP and religious organizations. You need only run an internet search on church financial scandals to see that!
With Kind Regards,
Mark Koscinski
Mark Koscinski CPA D.Litt. 