New York diocese has free cash reserves of $130 million

by Tom Gallagher

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Investment expert Richard Grafer of Pathway Investments, LLC, in Port Washington, N.Y., has analyzed Rockville Centre, N.Y., diocese's financial statements and makes the following observation:

"The Diocese of Rockville Centre ('DRVC') has finally published its last audited financial statement for the year ended August 31, 2010. A report summarizing my analysis of all the DRVC financial statements on a consolidated basis is attached.

"As you can see, Diocesan free cash reserves remain at the very high level of $130 million. Approximately $80-96 million of these reserves are excessive based upon the maximum allowed per generally accepted industry standards. Despite the existence of these excess reserves, the DRVC has taken some actions in the past two years that appear to effectively cut services at a time when they are most needed."

In 2006, the diocese released a statement explaining why it has excess cash reserves. While dated, in its conclusion the diocese said:

"The Diocese of Rockville Centre has true discretionary funds in reserve that can be used for cross funding other diocesan entities if and when necessary. These discretionary funds are found in the diocesan administrative offices and pastoral center budget and amount to the combination of funds with special purpose designation ($37,780,000) less the carry forward deficit ($4,469,000). These are the only central diocesan funds that can be tapped to address needs in other entities. Hence true discretionary funds amounts to $33.31 million.

As noted earlier, however, the diocese seeks to invest these funds to yield income supporting its mission and to make principal expenditures only when it best serves the balanced needs of all of the Catholic entities it supports. Without these funds, the diocese would have to cut back on levels of serves in almost every diocesan entity."

Read the full statement.

Read Richard Grafer's full analysis.

Read the Rockville Centre diocese's financial statements.