WHEELING, W.Va. — For the first time in the history of the Diocese of Wheeling-Charleston, the Catholic body has released a financial audit and it shows a significant loss.
According to the audit released to the public on Friday with a letter from Bishop Mark Brennan, the Catholic Church in West Virginia lost nearly $5 million in cash flow in the 2019 fiscal year. The audit also showed 2018 fiscal year numbers.
The $4.7 million in losses, compared to a deficit of just under $1 million in 2018, comes following a tumultuous last couple of years.
Brennan was named bishop of the diocese in July 2019, one month after the fiscal year ended.
He took over following an investigation into sexual harassment allegations and lavish spending by former Bishop Michael Bransfield.
The investigation cost the diocese nearly $1.5 million, according to the audit, that Brennan called “significant expenses” in his letter.
VIEW: The complete financial audit of the Diocese of Wheeling-Charleston
The diocese has used the method of selling off investments to make up for the deficits, the audit shows. A loss in net assets of nearly $500,000 from the Diocesan Real Estate, Inc listed under revenues and loss of $6.3 million of oil and gas properties was shown in the report.
“We’ve been forced to offset a number of costs related to operating the diocese with the selling off of investments and that’s not a wise move,” Tim Bishop, Diocese of Wheeling-Charleston spokesperson told MetroNews.
Brennan said in his letter to the diocese that, “Deficits are made up by selling off investments, which if this pattern continues unchecked, will eventually eliminate any benefit to future West Virginia Catholics from the legacy which the mineral rights have provided.”
The report shows mineral rights have provided the diocese with the largest investment income and revenue. Nearly $18 million in income for the diocese last fiscal year ending on June 30, 2019 came from mineral rights royalties and lease bonus revenue.
“Without that investment income, we are a mission diocese,” Bishop said. “Clearly, the audit shows we are not bringing in enough to operate our parishes and schools, to fully fund chancery operations, to fully fund the work that Catholic Charities is doing.”
The audit showed total program expenses including Catholic Charities was just over $33 million. More than $1 million went to Wheeling University, which the report says is not expected to be paid back.
More than $5 million went to the parish and school subsidies across the state and almost $4 million to pastoral centers. $1.3 million was given to the Catholic Charities subsidies.
The audit stated that the diocese’s value on investments at the end of the fiscal year was just over $240 million. Mineral rights assets in the diocese totaled $51.5 million.
“Bishop Brennan feels that we need to do a better job of being good stewards of that money so future generations can take advantage,” Bishop said of the mineral rights assets.
The diocese plans to release an audit annually, according to Bishop. The audit done by national firm Clifton Larsen Allen, LLP, was hired in July following recommendation of the Diocesan Finance Council.
Brennan said in his letter that the roles of the finance council has and will continue to expand as well as the Sexual Abuse Review Board to be “enduring benefits for our people.”
“This is Bishop’s Brennan’s commitment to a new era of stewardship, accountability and transparency,” Bishop said.