Today's Boston Globe has a story covering an unreleased partial audit of the Archdiocese of Boston, a copy of which it received from a church dissident group (no disparagement is intended by calling them dissidents, it is simply a fact that they are now engaged in a dispute with the Archdiocese). The audit is by Grant Thornton LLP (you may have heard of them in connection with one of their European clients who recently made news - Parmalat). The audit declines to express any opinion about the financial statements of the Archdiocese, which is what G-T wishes they had said earlier about Parmalat.

The Globe story makes a big deal about the difference between the operating deficit figure in the audit compared to one mentioned in a letter of the Archbishop ($20M vs $10M). The Globe story correctly notes the following:

The audit covers only the archdiocese's central fund, which covers the centralized spending and administrative expenses of the archdiocese. The archdiocese's parishes, its endowments, a revolving loan fund, and insurance funds are not included in the audit, nor are the statements of other Catholic institutions affiliated with the archdiocese, such as schools, seminaries, hospitals, charities, and Boston Catholic Television.

The financial openness of the archdiocese has become an issue of growing concern to critics of the archdiocese. Voice of the Faithful, a lay organization, has called for greater disclosure by the archdiocese, and 33 legislators, led by state Senator Marian Walsh, a West Roxbury Democrat, have responded by sponsoring a bill that would require more detailed financial reporting by religious organizations.

The archdiocese has in the past released only the financial statements of its central fund, also the subject of the current audit, and not the statements for parishes or other archdiocesan funds.

Now here is what the Globe story did NOT report. The Archbishop's letter of November 13, referred to in the Globe story as the source of the $10M deficit figure, said quite a few things about the financial state of the Archdiocese. Here is what the Archbishop wrote (emphasis mine):

The financial situation of the Archdiocese is much worse than most people realize. This is not so much a result of the settlements for the sexual abuse cases which have been paid in great part by the sale of the Archbishop's Residence and adjacent property, as well as by insurance. The 50 % reduction of annual income to the diocese caused by the scandal has dealt a very serious blow to our local Church. At the same time troubles in the stock market that have adversely affected pension plans and retirement accounts across the country have left us with an unfunded pension liability of $80 million.

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