2011-12 Diocesan annual report of financial information

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The annual report of financial information demonstrates how the Diocese of Tucson Administrative Offices use the funds that are so generously contributed by parishioners, benefactors and grantors to enable the Diocese to fulfill its mission to serve spiritual, pastoral, social service, educational and other needs of the faithful of the Diocese.
The financial information presented includes only that related to the Diocese of Tucson Administrative Offices under the direct control of the Bishop of Tucson.
In addition to the Office of the Bishop, the Administrative Offices include: Chancellor (Archives); Judicial Vicar (Tribunal); Vicar General/Moderator of the Curia (Corporate Matters); Communications; The New Vision newspaper; Vocations; Human Resources, Fiscal and Administrative Services; Property Management and Insurance Administration; Child, Adolescent and Adult Protection; Department of Pastoral Services (Catechesis, Catholic Social Mission, Divine Worship, Evangelization and Hispanic Ministry, Formation and Youth, Young Adult and Family Ministry); Department of Catholic Schools; Vicar for Deacons and Vicar for Religious.
Not included is financial information for parishes; Catholic schools; Diocese of Tucson Catholic Cemeteries; the Catholic Foundation for the Diocese of Tucson; Catholic Community Services of Southern Arizona; Our Faith, Our Hope, Our Future, Inc., Priests Assurance Corporation and the Catholic Tuition Support Organization, all of which are separate entities.
The information includes sources and uses of income and net assets (that assist and support the Bishop of Tucson in fulfilling his many responsibilities for pastoral care and leadership of the Diocese) and liabilities.
The information included in this annual report is excerpted from the audit report as performed by Keegan, Linscott & Kenon, P.C., who rendered an unqualified opinion.  The complete audit report, including all accompanying notes, is available at the Diocese of Tucson website www.diocesetucson.org under “Reports, Statements, Letters.”

NOTES
Note 1: Insurance expense continues to be a significant cost for all diocesan entities.  The Diocese of Tucson Administrative Offices negotiates for and secures the health, workmen’s compensation, property, liability and auto insurance for parishes and other Catholic organizations affiliated with the mission of the Diocese. Currently, workmen’s compensation, property, liability and auto coverage are a combination of self-insurance, participation in risk retention captive companies, and re-insurance coverage from major insurance carriers.
As part of the insurance program, the Diocese of Tucson has joined with other dioceses and archdioceses across the country to form two captive risk retention insurance companies.  The Bishops’ Property Insurance Company (BPIC) provides coverage for property, casualty and workmen’s compensation losses. The Diocese is also a shareholder in The Ordinary Mutual (TOM), which provides general and auto liability insurance. The Ordinary Mutual is currently in a rundown mode and will cease operations with the next few years once it has settled all pending claims.  Coverages previously provided by TOM are now being provided by a new captive risk retention company, the Western Catholic Insurance Company (WCIC), which was formed jointly by the Diocese of Tucson and four other dioceses in November 2011.

Note 2: Parish assessments consist of two separate assessments made on parishes according to the provisions of canon law: the priests’ salary subsidy assessment and the Chancery assessment.
The priests’ salary subsidy assessment is applied to parishes in proportion to their offertory income relative to all parish offertory income diocese-wide and is used to help pay the salaries of priests in poorer parishes.
The Diocese collects the assessments and disburses the monies to poor parishes and missions throughout the Diocese. No portion of the salary subsidy assessment is retained by the Diocese.
The second assessment, the Chancery assessment, is a levy or tax on a parish’s offertory collection. For parishes with annual ordinary income of less than $30,000, the assessment is 3.5 percent of income; for parishes with ordinary income greater than or equal to $30,000 the assessment is 7 percent of ordinary income. The Chancery assessment is the primary funding source for the administrative functions of the Diocese, including: Human Resources, Fiscal and Administrative Services, Office of Child, Adolescent and Adult Protection, General and Administrative expenses and debt service.

DIOCESAN FINANCE COUNCIL:

The Diocesan Finance Council provides advice and counsel to Bishop Gerald F. Kicanas. The Council members are Nancy Stephan (chair), Msgr. Al Schifano, Father Patrick Crino, Lawrence McDonough, Luis Dabdoub, John Lauer, Humberto Lopez, Lirain Urreiztieta, Ray Bargull and Richard Van Egeren.