THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OF'FICE JEFFERSON CITY, MISSOTIRI
FINA¡{CIAL STATEMENTS
June 30,2019 and 2018 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CrrY, MTSSOURT
TABLE OF'CONTENTS
Page
INDEPENDENT AUDITORS' REPORT J
F'INAI\CIAL STATEMENTS
Statements of Financial Position 4
Statements of Activities 5
Statements of Functional Expenses 7
Statements of Cash Flows 9
Notes to Financial Statements l0 CPAs and lYanagement Consultants
One South Memorial Drive, Ste.900 St. Louis, MO ó3 102 ph. 314.231.6232 Kerber, Eck & Braeckel fax 3 14.880.9307 '-'-' wwwkebcpa.com
Independent Auditors' Report
Board of Directors The Catholic Diocese of Jefferson City - Chancery Office Jefferson City, Missouri We have audited the accompanying financial statements of The Catholic Diocese of Jefferson City - Chancery Office (a Missouri corporation, not-for-profit), which comprise the statements of financial position as of June 30, 2019 and 2018, and the related statements of activities, functional expenses and cash flows for the years then ended, and the related notes to the financial statements
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements thatare free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Catholic Diocese of Jefferson City - Chancery Ofüce as of June 30,2019 and 2018, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. K'"1,*,f), tß,.'LLß St. Louis, Missouri January 22,2020 THE CATHOLIC DIOCESE OF JEFFERSON CITY. CHANCERY OFFICE JEFFERSON CrrY, MTSSOURT
STATEMENTS OF' F'INANCIAL POSITION June 30,
2019 2018 Assets Cash and cash equivalents $ 1,522,634 g 907,794 Investments Funds held on deposit with The Catholic Diocese of Jefferson City Fund Pooled investments 1,063,233 l,olg,7g2 Depositor's Fund 14,775,335 6,495,213 Other investments 147,420 258,83 I Accounts receivable, net 163,336 86,214 Promised contributions receivable, net 493,561 492,603 Prepaid expenses 160,509 158,587 Loans made to parishes and other entities, net 335,476 137,784 Land, buildings and equipment, net 691,092 756,393 Accrued pension asset 721,972 1,856,420 Pooled investments held on deposit with the Catholic Diocese of Jefferson City Fund for endowment |,517,852 1,446,117
Total assets $ 21,592,420 $ 13,614,738
Liabilities Accounts payable s 673,698 $ 210,809 Accrued liabilities Compensated absences 69,826 68,865 Payroll and other employee benefits 68,933 57,838 Property and casualty insurance claims 319,357 296,422 Deferred revenue 49,925 1,700 Liability under support agreement I19,481 Funds held in custody for others 349 782 442,077
Total liabilities 1,651,002 1,077,711
Net assets Without donor restrictions 9,472,509 7,815,282 With donor restrictions 4,721,745
Total net assets 19,94 1,418 12,537,027
Total liabilities and net assets $ 21,s92,420 $ 13,614,738
See notes to financial statements.
4 THE CATHOLIC DIOCESE OX'JEFFERSON CITY - CHANCERY OFF'ICE JEFFERSON CrrY, MrSSOrlRr
STATEMENT OF ACTIVITIES Year ended June 2019
Without donor With donor restrictions restrictions Total
Support and revenues Parish assessments g 1,906,282 $ $ 1,906,282 Contributions and bequests 2,003,838 9,624,574 10,628,412 gg,3gl Contributions from related parties 332,741 856,650 l,l Grants 142,000 142,000 Program sales and fees 730,506 71,450 801,956 Insurance premiums Health insurance 512,037 512,037 Property and casualty insurance l,g47,gg2 1,947,892 Net investment income 219,541 96,998 316,539 Other 100,358 4,417 104,775 Net assets released from restrictions Restrictions satisfied by time 2,137,697 (2,137,697) Restrictions satisfied by purpose 1,9 11,228 (r,9 11.228\
Total support and revenues 11,802,120 5,747,164 17,549,284
Expenses Program services Faith formation 1,933,478 1,933,479 Mission advancement 825,663 825,663 Marriage tribunal l3l,954 131,954 Care for parishes and schools 3,196,477 3,186,477 Care for clergy 276,018 276,018 6,253,590 6,253,s90 Supporting services Management and general Administration 1,924,400 1,924,400 Office of Bishop and Curia s64.999 564,999 Total management and general 2,489,399 2,4gg,3gg Fundraising 267,4s6 267,456 Total supporting services 2,756,955 2,756,855
g,olo,445 Total expenses 9,010,445
Excess ofrevenues over expsnses 2,791,675 5,747,164 8,538,839
Minimum pension asset adjustment (1,134,448) (1, 134.448)
Increase (decrease) in net assets 1,657,227 5,747,164 7,404,391
Net assets, July 1,2018 7,8 15,282 4,721,745 12,537,027
Net assets, June 30, 2019 $ 9,472.509 $ 10,468,909 $ 19,941,418
See notes to financial statements.
5 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFT'ICE JEFFERSON CITY, MISSOURI
STATEMENT OF' ACTIVITIES Year ended June 30,2018
Without donor With donor restrictions restrictions Total
Support and revenues Parish assessments $ 1,980,207 $ $ 1,980,207 Contributions and bequests 558,395 2,548,435 3,106,830 Contributions from related parties 332,625 822,391 1,155,016 Grants 185,508 185,508 Program sales and fees 981,022 68,394 1,049,476 Insurance premiums Health insurance 753,770 753,770 Property and casualty insurance 1,875,002 1,875,002 Net investment income 189,977 95,616 285,593 Other 98,355 I,351 99,706 Net assets released from restrictions Restrictions satisfied by time 2,082,790 (2,082,790) Restrictions satisfied by purpose 1,839,641 (1,839,641)
Total support and revenues 10,691,784 (200,736) 10,491,048
Expenses Program services Faith formation 2,024,632 2,024,632 Mission advancement 755,637 755,637 Marriage tribunal 161,026 161,026 Care for parishes and schools 3,097,506 3,097,506 Care for clergy 557 t45 557 145 6,595,946 6,595,946 Supporting services Management and general Administration 2,010,747 2,010,747 Office of Bishop and Curia 644,201 644,201 Total management and general 2,654,949 2,654,949 Fundraising 147,276 147,276 Total supporting services 2,902,224 2,902,224
Total expenses 9,398,170 9,398,170
Excess (deficiency) of revenues over expenses 1,293,614 (200,736) 1,092,878
Minimum pension liability adjustment 5,416,915 5,416,915
Increase (decrease) in net assets 6,710,529 (200,736) 6,509,793
Net assets, July 1,2017 1,104,753 4,922,491 6,027,234
Net assets, June 30,2018 $ z,a 15.282 s 4,721,745 $ 12,537,027
See notes to financial statements.
6 THE CATHOLIC DIOCESE OF JEFFERSON CITY. CHANCERY OFFICE JEFFERSON CITY, MISSOURI
STATEMENT OF FUNCTIONAL EXPENSES
P¡ogm sewices Suppo¡ting serices Maasement æd seneËl Cæe fo¡ Ofüce of Total Mission Mmiage Paishes æd Cae fo¡ Bishop md Meagement Faith Fomation Adveæmmt Tribu¡al Schools Clerg¡r Tota.l Administration Cuia ad General Fund¡aising Tot¿l Total expenses
Activities $ 350,302 3,t82 $ 353,484 $ $ 1,495 $ 1,495 $ 2,950 $ 4,445 $ 351,929 G@ts æd æsistanæ 37t,864 177,776 190,160 146,451, 886,25t 24,Ot1 24,Ot7 24,O17 910,268 Contæts 5,500 5,500 5,500 Paish ærviæs Health insuroce progm 55'1,940 557,940 55't,940 Propqty ad øualty insuæce progrm 1,462,620 1,462,620 t,462,620 Retirement fo¡ diocew priests 50,000 50,000 5,2t7 5,2r7 5,217 55,217 Retiremøt for paish æd school employees 801,359 801,359 801,359 Pffionnel æsts Salary ad wages 458,13 I 184,249 76,041 59,874 50,052 828,34? 475,896 256,846 '132,742 I I 5,164 847,906 1,676,253 Benefits æd taxes 168,106 49,213 16,087 2,026 29,479 264,91:i 99,863 65,534 165,397 42,t58 207,555 472,466 Professional servicæ 157,178 138,706 260 111,463 407,607 323,170 13,1'16 336,346 10,185 346,531 754,138 Fmishings, fixtues ad equipment 6,371 7tz 7,083 84,566 28,002 112,568 28 r12,596 1t9,679 q q4? Supplies 14,878 998 752 16,628 10,953 20,895 2,223 23,118 39,746 Communications ad infomation æchnolog¡r 4,737 79,264 20,131 104,132 175,333 8,156 183,489 64,206 ta1 Âas 35t,82't Postage md shipping 2,381 81,880 t,975 36 86,272 5,964 4,350 10,3 l4 8,054 18,368 104,640 Printing æd publishing I 1,616 86,806 1,318 99,',740 (2,330) 5,318 2,988 12,t95 15,183 t14,923 Tmvel, meetings æd training 55,964 16,938 9,315 5't9 82,796 I 1,490 65,504 76,994 7,729 84,723 t67,5t9 Academic expenses 194,731 194,73'- t94,'t3t Rents, utilities ad othq occupacy costs tt,9'16 1t,976 400,'121 s1,980 452,701 452,701 464,6'7'¡ Dues æd ææssmqts 9,978 515 10,553 150,639 4,1 l9 154,758 1,550 156,308 166,861 Depmiation 108,921 108,921 108,921 108,921 Othq 15,265 5,939
Total expmæs $ ,833,478 $ 82s,663 $ 131,954 S 3,t86,4't't $276,018 $ ó,2s3,590 $1,924,400 S 564,999 52,489,399 5267,456 92,756,855 $ 9,010,445
See notes to finecial statments. 7 THE CATHOLIC DIOCESE OF JEFFERSON CITY. CHANCERY OFFICE JEFFERSON CITY, MISSOURI
STATEMENT OT FUNCTIONAL EXPENSES Yqr ended Ju¡e 30,2018
Prog¡m *rviæs SuDDortinc æryices Maagemqt ed gtreml Cae fo¡ Ofüæ of Total Mission Maiage Pæishæ æd Cæ for Bishop æd Mæagment Faith Fomation Advræmmt T¡ibunal Schools Clerglr Total Administ¡ation Curia æd General Fundraising Total Total expenses
Activities $ 529,454 S 16,926 $ 143 $ $ 546,523 $ g 12,023 $ t2,023 $ 12,O23 $ 558,546 G@ts ed æsislanæ 424,594 aa1 \Ã\ 10,341 183,799 846,279 18,079 18,079 18,079 864,358 Cont¡æts 1,400 1,400 1,400 Paish ærviæs Health insurace progrm 619,696 619,696 619,696 Property ad cæualty insuraæ progm 1,662,382 1,662,382 1,662,382 Retiremqt fo¡ dioæsæ priests 285,500 285,500 z't24 2,124 2,124 287,624 Retimøt for paish ad whool employæs 790,256 790,256 790"256 Pssnnel costs Salary æd wages 529,OO7 205,513 I l8,l 87 2,171 60,487 915,365 438,647 307,815 746,462 79,664 826,126 1,741,491 Bøefits ad taxes t47,t24 \1 a)a 16,544 63 27,359 242,312 123,656 64,992 188,648 16,477 205,125 447,43'l 't2,971 P¡ofsional swices 28,550 l,0ss 12,59'1 I I 5,173 382,605 102,3t2 484,917 I l"l7l 496,088 6tl,26t Fumishingq fixtures æd equipmmt 8,64l 356 8,997 43,495 t7,790 61,245 61,285 70,282 Suppliæ 13,1O7 4,416 346 18,329 7,672 11,O97 t8,169 699 19,468 37,'19'l qa Commwications æd infomation technologj¡ 9,674 8,026 t2,264 ,q 121,473 6,024 127,497 15,002 t42,499 t72,463 'I Posage md shipping 4"212 105,095 2,t06 I1,413 2,274 3,039 5,313 8,038 13,351 124,764 Printing md publishing 8,653 106,550 1,715 I 16,918 Q,s52) 7,697 5,145 12,869 18,014 134,932 qq? Travel, mætings ad training 47,O73 153 6,766
Total *penses
See notes to finæcial statemmts. 8 THE CATHOLIC DIOCESE OFJEFFERSON CITY. CHANCERY OFX'ICE JEFFERSON CrrY, MISSOURT
STATEMENTS OF CASH FLOWS Years ended June 30,
2019 2018 Increase (decrease) in cash and cash equivalents
Cash flows from operating activities Change in net assets s 7,404,391 $ 6,509,793 Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 108,921 86,644 Gain on sale of assets (38,250) Net realized and unrealized gain on investments (l 13,593) (138,6e3) Decrease (increase) in: Accounts receivable; net (77,122) 127,266 Promised contributions receivable, net (e58) 358,297 Prepaid expenses (1,e22) (135,558) Accrued pension asset 1,134,448 (l,856,420) Increase (decrease) in: Accounts payable 462,889 (13,866) Accrued liabilities 34,991 7,306 Defened revenue 48,225 (e3,e03) Accrued pension liability (3,560,495) Liability under support agreement 119,48r Funds held in custody for others (92,295) 180,818
Net cash provided by operating activities 8,989,206 1,471,189
Cash flows from investing activities Loan collections from parishes and other entities I13,208 20,500 Loans issued to parishes and other entities (3 l 0,e00) (140,000) Purchase of investments (12,069,220) (4,716,333) Sale of investments 3,gg7,916 2,725,341 Purchase of land, buildings and equipment (64,213) (280,393) Proceeds from sale of land, buildings and equipment 58,843
Net cash used in investing activities (8,374,366) (2,390,885)
Net change in cash and cash equivalents 614,840 (919,696)
Cash and cash equivalents, beginning ofyear 907 794 1,827,490
Cash and cash equivalents, end ofyear s r,522,634 s 907,794
See notes to hnancial statements.
9 THE CATHOLIC DIOCESE OF'JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CITY, MISSOT]RI
NOTES TO FINANCIAL STATEMENTS
NOTE 1- SUMMARY OF SIGMFICANT ACCOTJNTING POLICIES
General Information
The Catholic Diocese of Jefferson City - Chancery Office (Diocese) is a not-for-profit organization that is exempt from income tax under section 501(c)(3) of the Internal Revenue Code. The Diocese is also a corporate body under the Code of Canon Law of the Roman Catholic Church and as such is recognized by the case law and common law of the State of Missouri and the United States of America. The Bishop, as local ordinary, exercises the pastoral mission entrusted to him by the Lord Jesus of sanctification, teaching and leadership, in communion with the Church Universal, under the leadership of its chief pastor, the Pope.
To carry out this mission, the Diocese is organized into five strategic areas of ministry plus oversight:
Faith Formation encompasses all aspects of passing on the faith, including educating our youth in our Catholic Schools, vocations, prolife activities, family/youth programs, seminarian and diaconate formation. It also includes direct ministerial services provided through our Hispanic and multicultural activities, hospital ministries and our support of the poor and disenfranchised.
Mission Advancement promotes the evangelization work of the Diocese in supporting God's children in various parts of the world and our communication efforts including the Diocesan Catholic Missourian newspaper, along with our development efforts to provide resources for all of the activities the Diocese embraces.
Marriage Tribunal provides direct support of couples seeking to enter into the Sacrament of Marriage and for those seeking a decree of nullity.
Care of Parishes and Schools provides for the various benefit programs (health insurance and retirement) for parish and school employees along with property and casualty insurance programs. In addition, parishes and schools may apply for direct assistance when facing financial difficulties in meeting their own obligations.
Care for Clergy includes funding of retirement benefits, retreats, continuing education opportunities and fellowship activities for priests of the Diocese. In addition, it provides support for priest with medical needs that exceed their available resources.
Oversight includes the administrative offices of the Diocese along with shared expenses for the other ministry areas that are not readily assignable.
l0 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CITY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
The accompanying financial statements include the assets, liabilities, net assets and financial activities of the Diocese, which are fiscally responsible to the Bishop of the Diocese of Jefferson City. The following entities, being separate 501(cX3) corporations or trusts are excluded from this report:
Priests' Mutual Benefit Society Diocesan Excellence in Education Fund, Inc. The Jefferson City Diocesan Chancery Building Fund, Inc. The Catholic Diocese of Jefferson City Fund The Diocese of Jefferson City Parish Development Corporation Jubilee Retirement Trust Fund Parishes within the Jefferson City Diocese Fr. Augustine Tolton Regional Catholic High School in Columbia Helias Catholic High School in Jeffèrson City Catholic Charities of Central and Northern Missouri Diocese of Jefferson City Real Estate Corporation
Various religious orders, lay societies and religious organizations which operate within the Diocese, but which are not fiscally responsible to the Bishop, and parishes and their related institutions, have not been included in the accompanying financial statements.
Net assets
Net assets, revenues, gains and losses are classified based on the existence or absence ofdonor- imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:
Net assets without donor restrictions - Net assets available for use in general operations and not subject to donor restrictions. The Board of Directors has designated, from net assets without donor restrictions, net assets for support ofvarious diocesan operations.
1l THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CrTY, MISSOURT
NOTES TO FINANCIAL STATEME,NTS
Net assets with donor restrictions - Net assets subject to donor-imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will be satisfied by actions of the Diocese or the passage of time. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates resources be maintained in perpetuity. Donor-imposed restrictions are released when a restriction expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both.
Cash and Cash Equivalents
Cash and cash equivalents are defined as cash balances held in bank accounts and short-term investments with an original maturity no longer than three months. Deposit accounts designated for long-term purposes or received with donor-imposed restrictions limiting the use to long-term pu{poses are not considered cash and cash equivalents.
The Diocese also maintains some deposits with The Catholic Diocese of Jefferson City Fund. However, the Diocese does not consider funds on deposit with The Catholic Diocese of Jefferson City Fund to be cash equivalents and accounts for them like other investments.
Investments
The Diocese's investments are managed with investments of affiliates in The Catholic Diocese of Jefferson City Fund. Pooled investment fund interest and dividends, realized gains and losses, and unrealized gains and losses are allocated based on the proportionate share of each entity's fair value at the time of allocation. The financial statements of each entity reflect only that entþ's share of the pooled fund.
Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for the asset or liability.
Fair value of the underþing investments in The Catholic Diocese of Jefferson City Fund was determined using Level 1 inputs for common stocks, and equity, fixed income, and altemative mutual funds, which are quoted market prices for identical securities in active markets. Fair value is determined using Level 2 inputs for cash and cash equivalents, municipal bonds, U.S. govemment agency securities, and certificates of deposit, which are quoted prices for similar securities in active markets. Level2 inputs were derived using the market approach, which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable (that is, similar) assets, liabilities or a group of assets and liabilities. Fair values were provided by invesünent broker statements as of June 30, 2019 and 20 I 8.
t2 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFF'ICE JEFFERSON CITY, MISSOT]RI
NOTES TO FINANCIAL STATEMENTS
Accounts Receivable
Accounts receivable are stated at unpaid balances, less an allowance for doubtful accounts. The Diocese provides for losses on accounts receivable using the allowance method. The allowance is based on experience and other circumstances. It is the Diocese's policy to charge off uncollectible accounts receivable when management determines the receivable will not be collected.
Promised Contributions Receivable
Unconditional promises to give, cash, securities or other assets are recognized as revenues or gains in the period received, less an allowance for uncollectible amounts. Conditional promises to give are recognized only when the conditions on which they depend are substantially met and the promises become unconditional.
Contributed Services and Facilities
No amounts have been reflected in the financial statements for donated services. The Diocese pays for most services requiring specific expertise. However, individuals volunteer their time and perform a variety of tasks that assist the Diocese with specific programs, campaign solicitations and various committee assignments. The number of volunteer hours donated could not be estimated.
The Diocese conducts operations primarily in the Alphonse J. Schwartze Memorial Catholic Center. This facility is held in trust by the Diocese of Jefferson City Real Estate Corporation. The facility is currently leased to the Diocese for a nominal amount. The Diocese also provides a residence for the Bishop of Jefferson City that is also held in trust by the Diocese of Jefferson City Real Estate Corporation. The residence is currently leased to the Diocese for a nominal amount under an informal arrangement. For the years ended June 30, 2019 and2018, use of the donated facility was valued at$320,625 and the residence at $12,000 and both are reported as a contribution and related rent expense in the accompanying Statements of Activities.
13 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CITY, MTSSOURT
NOTES TO FINANCIAL STATEMENTS
Land, Buildings and Equipment
Land, buildings and equipment are stated at cost if purchased or at fair value as of the date received, if contributed. Significant additions are capitalized while maintenance and repairs are charged to operating expenses. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives on a straight-line basis as follows:
Buildings and improvements 15 - 40 years Furnishings 5 years Equipment 5 years Vehicles 5 years
Program Service Fees
Program service fees are recognized when earned. Program service fees received in advance are deferred to the applicable period in which the related services are performed.
Liability Under Support Agreement
During the year ended June 30, 2019, the Diocese and the Discalced Carmelite Nuns of Jefferson City, Monastery of the Sacred Heart and St. Joseph (the Monastery) executed a support agreement whereby the Monastery contributed $2,000,000 to the Diocese and the Diocese agreed to provide ongoing support and maintenance for the nuns of the Monastery. The estimated present value of this ongoing support and maintenance is reported as a liability in the statements of financial position. The difference between the contributed assets and the liability for ongoing support is reported as contributions on the statement of activities.
Assessments
Parish assessments represent the current year's assessment to each parish. The Diocese has three assessments. The Cathedraticum is assessed at the beginning of the fiscal year and billed in monthly installments. The Infirm Priest and the Seminary/Priest Retirement are assessed and billed in full at Christmas and Easter, respectively.
Health fnsurance Premiums
The Diocese offers all diocesan employees (parish, school, clergy and diocesan staff) a health insurance plan provided by Christian Brothers Employee Benefit Trust. Premiums were paid by the Diocese on behalf of the participants and the various parishes and schools were then billed by the Diocese through April 2017. Beginning in May 2017, Christian Brothers Employee Benefit Trust began billing the majorþ of the parishes and schools directly. The amounts reported as support and revenues in the Statements of Activities reflects the premiums and benefits billed and received on behalf of parishes, schools and non-diocesan staff. l4 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CITY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
Functional Allocation of Expenses
The costs of providing various programs and activities have been summarized on a functional basis in the statements of activities. The statements of functional expenses presents the natural classification detail of expenses by function. All expenses are charged directly to program and supporting services based on specific identification. Income Taxes
The Diocese is exempt from Federal income taxes under Section 501(c)(3) of the Intemal Revenue Code (IRC) and State of Missouri taxes under the applicable statute. In addition, due to religious activities, the Diocese is not required to file an Internal Revenue Service (IRS) Form 990. With the exception of third party advertising in the Catholic Missourian, the Diocese has no activities that would cause imposition of the unrelated business tax provision of the IRC. The Diocese has no unrelated business income tax for the years ended June 30, 2019 and 2018.
Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In 2019, the Diocese implemented the requirements of the Financial Accounting Standards Board's Accounting Standards Update (ASU) 2016-14, Not-for-Profit Entities (Topic 958) - Presentation of Financial Statements of Not-for-Profit Entities. All applicable requirements of ASU 2016-l4have been applied retrospectively to all periods presented. ASU 2016-14 requires certain changes to the presentation of financial statements of not-for-profit entities and additional new disclosures. A key change required by ASU 2016-14 are the net asset classes used in these financial statements. Amounts previously reported as unrestricted net assets are now reported as net assets without donor restrictions and amounts previously reported as temporarily restricted net assets and permanently restricted net assets are now reported as net assets with donor restrictions.
Subsequent Events
In preparing these financial statements, the Diocese has evaluated events and transactions for potential recognition or disclosure through January 22, 2020, the date the financial statements were available to be issued.
15 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CrTYo MTSSOURT
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS
The following represents financial assets as of the financial position date, reduced by amounts not available for general use within one year of the financial position date because of contractual or donor-imposed restrictions or internal designations. Amounts not available include amounts set aside for operating and other reserves that could be drawn upon if the Board of Directors approves the actions.
June 30, 2019 2018
Cash and cash equivalents s 1,522,634 $ 907,794 Investments 15,985,988 7,772,826 Accounts receivable, net L63,336 86,214 Promised contributions receivable, net 493,561 492,603 Loans made to parishes and other entities, net 335,476 137,784 Pooled investments held for endowment 1,5 17,852 1,446,117
Total financial assets 20,018,847 10,843,338
Loans made to parishes and other entities to be collected in more than one year (121,806) (123,032) Contractual or donor-imposed restrictions Restricted by donor for time or purpose (8,951,057) (3,275,628) Endowment funds (1,517,852) (1,446,117) Board designated funds (3,930,317) (3,170,148)
$ 5,497,815 s 2,828,413
The endowment funds consist of donor-restricted endowments. Income from donor-restricted endowments is available for general use, however, funds remain restricted until the board appropriates them for expenditure.
In the event of an unanticipated liquidity need, the Diocese can draw upon $350,000 of an available line of credit as disclosed in Note 7.
t6 THE CATHOLIC DIOCESE OF JEF'FERSON CITY _ CHANCERY OFFICE JEFF'ERSON CITY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - DETAIL OF SELECTED ACCOUNT BALANCES
Accounts Receivable
Accounts receivable as of June 30, is summarized as follows:
2019 2018
Parishes within the Catholic Diocese of Jefferson City $ 84,236 8 44,02r Jubilee Retirement Trust Fund 71,642 27,249 Helias Catholic High School in Jefferson City t02 Catholic Charities of Central and Northern Missouri 183 155 Priest Mutual Benefit Society 1,964 Other accounts receivable 7,7r2 13,160 Total accounts receivable 163,773 86,651 Allowance for uncollectable accounts (437) (437)
Net accounts receivable $ 163,336 $ 86,214
Promised Contributions Receivable
Promised contributions receivable as of June 30, is summarized as follows:
2019 2018
Restricted for Catholic Stewardship Appeal s 270,622 s 264,113 Restricted for Special Bishop Appeal 250,000 255,000
Total promised contributions receivable $ 520,622 _$ 51eJ_13_
Receivable in less than one year s 520,622 $ 519,1 13 Less: allowance for doubtful accounts Q7,06r) 1
Net promised contributions receivable $ 493,561 $ 492,603
t7 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEF'FERSON CITY, MrSSOtru
NOTES TO F'INANCIAL STATEMENTS
Loans Made to Parishes and Other Entities
The Diocese has given loans to various parishes and entities. As of June 30, the outstanding balances of these loans were as follows:
2019 2018
Immaculate Conception $ 6,502 $ 7,115 St. Clement 90,478 95,542 Fr. Tolton Catholic High School 200,000 Other entities 38,496 35,127 Total loans outstanding 335,476 137,784 Less: current loans outstanding (2t3,670) (14,752)
Long-term loans outstanding $ 121,806 S 123,032
Land, Buildings and Equipment
Land, buildings and equipment consist of the following at June 30,:
2019 2018
Buildings and improvements $ 1,655,636 s 1,694,258 Equipment, vehicles and fumishings 490,196 478,245 2,145,832 2,172,503 Less accumulated depreciation (1,703,824) (1,667,194) 442,008 505,309 Land 249,084 251,084
ß 691,092 $ 756,393
The real property for the Diocese of Jefferson City is held in a trust in the name of the Diocese of Jefferson City Real Estate Corporation.
18 THE CATHOLIC DIOCESE OF JEF'FERSON CITY - CHANCERY OFFICE JEF'FERSON CITY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
Funds Held in Custody for Others
This amount represents funds received and held by the Diocese as an agent for others. The composition of balances at June 30, is as follows:
2019 201 I
Retirement payments $ s 21,199 Overseas relief collection 3,292 1,627 Mission Sunday collection 19,498 11,794 Catholic campaign for human development 11,426 10,762 Communications/education collection 28,291 55,887 Retired Religious Collection 32,222 21,529 Home missions collection 78,591 78,753 Mass stipends 10,055 3,473 Mission cooperative 6,455 4,370 Operation Rice Bowl 29,475 37,640 Helias Catholic High School in Jefferson City 2,484 2,829 Fr. Augustine Tolton Regional Catholic High School in Columbia 100,580 Priests' Mutual Benefit Society 50,000 Our Lady of the Lourdes Interparish School 100,000 Other 27,993 41,634
Total funds held in custody for others s 349,782 s 442,077
t9 THE CATHOLIC DIOCESE OF'JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CITY, MISSOT]RI
NOTES TO FINANCIAL STATEMENTS
NOTE4_NETASSETS
The nature and amount of net assets at June 30, were as follows:
Net assets without donor restrictions:
2019 2018
Undesignated s 4,t2g,t2g $ 3,888,741
Designated Land, buildings and equipment 69r,092 756,393 Accrued pension asset 721,972 Property and casualty insurance 1,700,903 1,228,289 School technology 11,370 Aquinas Academy 13,671 3,109 Permanent diaconate r,290 1,290 Seminarian studies 530,643 449,035 PAL League 16,731 Infi rm clergy/consecrated life r,647,422 1,477,055 Sacred Heart High School 3,368 Kirksville Newman Center 3,534 Fr. Tolton Catholic High School 12,755 Total designated 5,343,381 3,926,54r
Total net assets without donor restrictions s 9,472,509 $ 7,815,282
20 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CrrY, MTSSOURT
NOTES TO FINANCIAL STATEMENTS
Net assets with donor-imposed restrictions were restricted for the following purposes or periods at June 30,:
2019 2018
Subject to expenditure for specified purpose Peru and Central American Mission $ 363,663 $ 339,645 Pro-Life 2,397 13,690 Seminarians, Priests, and Religious Education Fund 211,283 2tr,479 Parish Technology Fund 446,466 Sacred Heart High School 950,000 Kirksville Newman Center 1,ooo,ooo Fr. Tolton Catholic High School 1,ooo,ooo Camp Sienna 89,871 I1,781 Camp Maccabee 90,972 CHRISTPoweT 34,815 Totus Tuus 633 10,410 Community Reconciliation 979,928 64,764 Seminarian Studies I 16,108 I 15,108 Hispanic Children School Grant 6,500 6,500 Hispanic Ministry-Mission Project I1,856 12,035 Ministry to Priests Education 191,330 77,236 SPIRE 4,115 4,115 Permanent Diaconate Office 5,390 5,390 Ext Soc Hispanic Immersion Grant 6,632 2,101 Catholic Campaign for Human Development 1,974 526 Bishop's Fund 459,522 260,373 Warack Scholarship Fund 45,51 I 44,889 Women's Ministry Fund 149,981 Stewardship Director 500,000 Technology 353,003 Miscellaneous I 508 7,021,940 1,181,550
Subject to the passage of time Catholic Stewardship Appeal 1,929,117 2,094,078
2l THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEFF'ERSON CrrY, MISSOIIRT
NOTES TO FINANCIAL STATEMENTS
2019 2018
Endowments subject to spending policy and appropriation by Board of Directors Seminary Burses Fund, includes original gift amount of $9,1l0 in 2019 and 2018 $ 9,110 $ 9,110 Sauer Scholarship Endowment, includes original gift amount of $88,550 in20l9 and 2018 124,903 119,006 Simon Scholarship Fund, includes original gift amount of $429,108 in20l9 and 2018 563,261 532,741 Albert Johns Education Fund, includes original gift amount of 552,277 in20l9 and552,249 in 2018 52,281 52,257 Leong Poetry Project, includes the original gift amount of $12,000 in20l9 and 2018 16,920 16,432 Seminarians and Priests Education Fund, includes original amount of $310,882 in 2019 and 2018 581,880 551,314 Seminarian Endowment Fund, includes original gift amount of $1 19,795 in 2019 and $l 19,133 in 201 8 159,543 155,283 Mudd Family Endowment, includes original gift amount of S7,865 in20l9 and 2018 9,9s4 9,974 1,517,852 1,446,117
$ 10,468,909 g 4,721,745
22 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CITYO MISSOI]RI
NOTES TO FINANCIAL STATEMENTS
Net assets were released from donor restrictions by incurring expenses satis$ing the restricted purpose or by occurrence of the passage of time or other events specified by the donors as follows for the years ended June 30,:
2019 201 8 Expiration of time restrictions Catholic Stewardship Appeal $ 2,137,697 $ 2,082,790
Satisfaction of purpose restrictions Peru and Central American Mission 269,727 317,006 Pro-Life 55,603 41,412
Seminarians, Priests, and Religious Education Fund 496 1 Parish Technology Fund 141,534 Sacred Heart High School 50,000 Camp Sienna 9,795 2t7 Camp Maccabee 8,693 Knights of Columbus Communication Grant 14,000 14,000 Totus Tuus 31,891 20,481 Community Reconciliation 163,101 14,645 Seminarian Studies 42,000 40,000 Hispanic Ministry-Mission Proj ect 179 2,084 Ministry to Priests Education 35,906 Ext Soc Hispanic Immersion Grant 6,529 Catholic Campaign for Human Development 20,127 24,259 Bishop's Fund 38,719 363,776 Home Mission's - Hispanic Ministry Grant 70,000 105,000 Women's Ministry Fund t9 Vocations Day 13,067 Jubilee Retirement 856,650 822,391 Technology 46,997 Event Coordinator 15,000 Miscellaneous 1,809 13,324 Spending rate distributions and appropriations from endowment Seminarians and Priests Education Fund 34,689 Mudd Family Endowment 300 Sauer Scholarship Endowment 7,037 Simon Scholarship Fund 22,767 18,000 Albert Johns Education Fund 1,821 1,827 1,911,228 1,839,641
s 4,048,925 $ 3,922,431
ZJ THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEF'FERSON CITY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
NOTE 5 _ RETIREMENT PLANS
There are three retirement plans. Substantially all lay personnel and clergy of the Diocese are participants in a defined contribution plan. Priests are also members of a retirement plan through the Priests' Mutual Benefit Society. In addition, the priests also have the option to participate in the Diocesan Priests 403(b) retirement plan. The Bishop authorizes annual contributions to each of the three plans.
Employee Retirement PIan
The lay retirement plan is a non-ERISA 403(b) plan. Contributions to this plan are not taxable to the employee and are deposited into individual annuity contracts. Individual parishes and diocesan entities contribute a fixed 3%o of their eligible employee's gross wages. Beginning July I,2012, individual parishes and diocesan entities began providing 100% matching contributions for any elective deferrals made by eligible employees up to 2Yo of the eligible employee's gross wages. To be eligible, an employee must be customarily employed the equivalent of 20 hours per week. Lay personnel throughout the Diocese who were participating in the plan and hired prior to January 1, 2008 are fully vested. Beginning January l, 2008, newly hired employees vest over a six year period. The contribution by the Diocese on behalf of eligible Chancery employees totaled 535,296 and 837,296 for the years ended June 30, 2019 and20l8, respectively.
The Jubilee Retirement Trust Fund is a not-for-profit corporation established June 26,2008 to provide support to the Bishop, The Catholic Diocese of Jefferson City, and the participating entities to assist them in providing for the retirement needs of the lay employees and permanent deacons covered under the Catholic Diocese of Jefferson City's Tax Deferred Annuity Plan. The Trust Fund makes contributions to retirement accounts of eligible employees on behalf of individual parishes and diocesan entities to offset one-third of the fixed contribution and 100% of the matching contribution obligations incurred by those entities. During the years ended June 30, 2019 and 2018, the Trust Fund made contributions on behalf of eligible Chancery employees totaling $35,982 and $3I,626, respectively. These amounts are included as both contribution income and as an expense in the Statements of Activities.
Priests' Retirement and Health Plans
The Diocese maintains a defined benefit plan to provide retirement, health and dental insurance benefits exclusively for retired and disabled priests of The Catholic Diocese of Jefferson City who retire after July 1, 1981. The assets of the plan are held in the Priests'Mutual Benefit Society (the Society) which was organized on April 1, 1988. The Society's assets are administered by a Board of Trustees consisting of the Bishop, four elected priests, and two persons appointed by the Bishop.
24 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CITY, MISSOTJRI
NOTES TO FINANCIAL STATEMENTS
Benefits provided under the Plan are determined by the Bishop following a recommendation by the Trustees of the Trust. The monthly pension benefit was $1,910 and $1,872 as of June 30, 2019 and 2018, respectively. A priest is normally eligible to participate in the Plan at age 70 with at least 20 years of service. A priest who retires prior to age 70 will have a reduced benefit of one half of one percent per month for every month prior to age 70 the priest actually retires. A priest who retires prior to completing 20 years of service with the Diocese because he was incardinated into the Diocese or ordained after age 50, would have a reduced benefit as determined by the Bishop after consultation with the Trustees of the Trust. The amount of benefit payable to a participant in the Plan may be adjusted upward, downward or eliminated altogether by the Bishop at arry time following consultation with the Trustees of the Trust.
The following tables provide further information about the plan based on actuarial information at the measurement date of June 30,:
2019 2018
Fair value of plan assets s r6,t25,475 S 15,944,046 Proj ected benefit obligation Retirement benefits 11,303,856 10,406,367 Medical and dental insurance 4,099,647 3,591,259 Total projected benefit obligation 15,403,503 13,987,626
Funded status _s ?T,n2_ $ 1,856,420
Accumulated benefit obligation $ 15,403,503 S 13,997,626
Assumptions used to determine projected benefit obligation: Discount rate 3.4s% 4.t0%
Net pension cost $ 144,469 s 282,533
Effective July 1, 2018, the maximum monthly pension benefit was increased from $1,872 to $1,910 which increased the plan's projected benefit obligation by approximately $211,000. Also effective July 1, 2018, the discount rate was changed from 3.8Yo to 4.1%o and the mortality improvement scale was updated from MP16 to MP17 which decreased the plan's projected benefit obligation approximately $701,000. Effective July l, 2019, the maximum monthly pension benefit was increased from $1,910 to $1,948 which increased the plan's projected benefit obligation by approximately $206,000. Also effective July 1,2019, the discount rate was changed ftom 4.10%o to 3.45Yo and the mortality improvement scale was updated from MP-l7 to MP-2018 which increased the plan's projected benefit obligation approximately $1,150,000.
25 THE CATHOLIC DIOCESE OF'JEFFERSON CITY - CHANCERY OFF'ICE JEFFERSON CrTY, MTSSOURI
NOTES TO FINANCIAL STATEMENTS
20t9 2018 Contributions The Catholic Diocese of Jefferson City Chancery Office $ 55,217 $ 287,624 Other 140 4,750,300
Total $ 55,357 $ 5,037,924
Benefits paid g 786,044 S 59t,529
Assumptions used to determine net pension cost: Discount rate 3.45% 4.10% Expected rate of return on plan assets 6% 6%
Amounts recognized in the accompanying financial statements are as follows for the years ended June 30,:
2019 2018 Total asset recognized in the Statements of Financial Position g 721,972 $ 1,956,420
Minimum pension asset adjustment recognized in the Statements of Activities $ (1.13 4,449) $ 5,416,915
The plan provides health and dental insurance coverage for retired or disabled priests of The Catholic Diocese of Jefferson City. The assumed health care cost trend rate used to measure the expected cost of benefits under the plan was 7.0Yo and 6.5%;o during the years ended June 30, 2019 and 2018, respectively. Thereafter, this rate is assumed to gradually decrease each year until it reaches 4.5o/o.
26 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CITY, MISSOtru
NOTES TO FINANCIAL STATEMENTS
The fair values of the Priests' Retirement and Health Plan assets at June 30,2019 are as follows:
Fair value Level I Level2 Level3
Cash and cash equivalents $ 81,016 $ 91,016 Pooled investments Cash and cash equivalents 104,335 104,335 Equity securities 7,840,731 7,840,731 Fixed income securities 7,224,292 3,395,417 3,929,975 Total 15,169,358 11,236,148 3,933,210
Depositor's Fund 875,101 875,101
s 16,125,475 $ 11,317,164 $ 4,909,311 $
The fair values of the Priests' Retirement and Health Plan assets at June 30, 2018 are as follows:
Fair value Level I Level2 Level3
Cash and cash equivalents $ 110,234 $ 110,234 $ $ Accounts receivable 50,000 Pooled investments Cash and cash equivalents 102,786 102,786 Equity securities 5,764,639 5,764,639 Fixed income securities 5,610,702 2,790,103 2,830,599 Total 11,478,127 8,544,742 2,933,385
Depositor's Fund 4,207,649 4,207,649
$ 15,846,010 S 8,654,976 s 7,141,034 $
The expected rate of return on plan assets is determined by the plan asset's historical long-term investment performance, current asset allocation and estimates of future long-term retums by asset class. The plan adopted an investment policy, approved by the Board of Trustees of the Priests' Mutual Benefit Society, that attempts to provide a predictable stream of funding to the plan while also maintaining the purchasing power of the plan's assets. Accordingly, the investment process seeks to achieve an average total annual rate of return which consists of the Consumer Price Index (CPD plus 4Yo. Accordingly, the composition of the plan assets is broadly targeted at a 50o/ol50Yo allocation between equity securities and fixed income securities.
The Diocese expects to contribute $50,000 to the defined benefit plan in the year ended June 30, 2020.
27 THE CATHOLIC DIOCESE OF'JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CITY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
The pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid to beneficiaries as follows for the year ended June 30:
Retirement Health and Total benefits dental
June 30,2020 $ 623,601 $ 163,lt5 $ 786,776 June 30,2021 649,976 t75,lll 825,087 Jtne 30,2022 672,892 193,196 866,088 June 30,2023 692,432 212,948 905,380 June 30,2024 667,527 215,636 883,163 June 30, 2025-2029 3,086,774 r,r03,703 4,190,477 June 30, 2030 584,376 229,341 813,717
The Diocese also administers the Diocesan Priest 403(b) Retirement Plan which was created February l, 200I, as a supplement to the Priests' Mutual Benefit Society. For the fiscal year ended June 30, 2019 and2018, individual parishes and diocesan entities contributed $2,400 and $2,600, respectively, por priest to the priests 403(b) plan. The amount is paid 100% by the parish unless a priest is assigned to multiple parishes or other diocesan entities, in which case the amount is allocated proportionately. All active priests are eligible. Priests are I00%o vested in both the employer contribution and any elective deferrals they may make. The amount paid by the Diocese for its share of priest's 403(b) contribution allocation was $21,600 and522,750 for the years ended June 30, 2019 and20l8, respectively.
Detailed information on specific coverage and eligibility under each plan is available in the respective plan documents which is available from the Finance Office of the Diocese.
NOTE 6 _ COMMUNITY RECONCILIATION
As part of the Charter for the Protection of Children and Young People, the Diocese must undergo an on-site compliance audit every three years to measure its compliance. The most recent compliance audit was completed December 11,2017. The results of that audit showed that the Diocese was fully compliant with the Charter for the Protection of Children and Young People and there were no recoÍìmendations or required actions to be taken.
28 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEFFERSON CITY, MISSOTJRI
NOTES TO FINANCIAL STATEMENTS
In addition to committing to the protection of children and young people, the Bishop also assured the people of the Diocese that "...no part of your contributions to the Catholic Stewardship Appeal will be used for any costs related to the abuse issue. Nor will these needs be met from any parish assessments. For these costs, we are raising funds from private donors." As such, all expenses incurred because of the abuse have been paid from restricted donations made specifically for that purpose and other funds that have not come from any Stewardship Appeal or parish assessment.
For the fiscal years ending June 30,2019 and 2018, The Diocese had expenses of$163,101 and $14,645, respectively, directly related to the Community Reconciliation efforts described above. As of June 30, 2019 and 201 8, the balance of net assets restricted for Community Reconciliation was $979,928 and 564,764, respectively, as listed in Note 4 to these financial statements.
NOTET_RELATEDPARTIES
The Diocese is related through the Bishop of the Diocese of Jefferson City to the following entities: Priests' Mutual Benefit Society; The Catholic Diocese of Jefferson City Fund; Diocesan Excellence in Education Fund, Inc.; The Jefferson City Diocesan Chancery Building Fund, Inc.; Parishes within the Jefferson City Diocese; the Fr. Augustine Tolton Regional Catholic High School in Columbia; Helias Catholic High School in Jefferson City; The Diocese of Jefferson City Parish Development Corporation; Catholic Charities of Central and Northern Missouri; Diocese of Jefferson City Real Estate Corporation and Jubilee Retirement Trust Fund. The Diocese maintains separate books and records. All financial information for the above entities is presented separately and is excluded from this report.
The Catholic Diocese of Jefferson City Fund holds deposits on account of $14,775,335 and $6,495,213 and investments of $2,581,085 and $2,464,899 as of June 30, 2019 and 2018, respectively, for the Diocese.
The Catholic Diocese of Jefferson Crty Fund extended a $350,000 line of credit to the Diocese throughout the years ended June 30, 2019 and 2018. The full $350,0001ine of credit was available as ofJune 30,2019 and 2018.
29 THE CATHOLIC DIOCESE OF JEFF'ERSON CITY _ CHANCERY OFFICE JEFFERSON CrTY, MrSSOtru
NOTES TO FINANCIAL STATEMENTS
The Diocese had the following transactions with related parties during the years ended June 30,:
20t9 1900 The Catholic Diocese of Jefferson City Fund Depositor's fund interest $ 762,348 $ 93,705 Net investment income from pooled investments 166,103 174,204 Payments made for accounting services provided for the Fund 52,000 52,000
Priests' Mutual Benefit Society Contributions to the Plan 55,217 287,624 Amounts invoiced to the Plan for reimbursement of health insurance premiums, accounting, professional, administrative support, conference fees and office supplies 17,050 15,037 Amounts invoiced and due from the Plan 1,964
Catholic Charities of Central and Northern Missouri Amounts contributed to Catholic Charities by the Diocese 200,000 267,546
Diocese of Jefferson City Jubilee Retirement Trust Fund Payments for accounting services provided by the Diocese 9,000 9,000 Pension benefit payments for Chancery and Diocesan employees made by the Jubilee Retirement Trust Fund 856,650 822,391
The Diocese recognized revenue of $3,448,254 and 53,442,176 from the various parishes for the years ended June 30, 2019 and20l8, respectively. As of June30,20l9 and 2018, the Diocese holds 5335,476 and $137,784, respectively, in loans outstanding for various parishes and related entities, net of any allowance for uncollectable loans.
During the fiscal years ended June 30,2019 and 2018, the Diocese invoiced Helias Catholic High School $96,208 and $70,312, respectively, for miscellaneous expenses paid on their behalf.
30 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CITY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
As of June 30, the Diocese held related party accounts receivable for:
2019 201 8
Parishes within the Catholic Diocese of Jefferson City $ 84,236 $ 44,021 Jubilee Retirement Trust Fund 71,642 27,249 Catholic Charities of Central and Northem Missouri 183 155 Priests' Mutual Benefit Society 1,964 Helias Catholic High School in Jefferson City 102
$ 156,061 S 73,49r
NOTE 8 _ CONCENTRATION OF CREDIT RISK
The Diocese places its cash and cash equivalents with credit-worthy high quality financial institutions. Balances on accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. From time to time, cash balances may exceed FDIC insurance limits. The Diocese has not experienced any losses in its accounts with the financial institutions and believes it is not exposed to any significant credit risk.
Investment securities are exposed to various risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain invesfnent securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risk in the near term would materially affect the amounts reported in the financial statements.
NOTE 9 _ DONOR. RESTRICTED ENDOWMENTS
The Diocese holds and maintains the following endowments: Albert Johns Education Fund, Seminarians, Priests, and Religious Education Fund, Leong Poetry Project, Mudd Family Endowment, Sauer Scholarship Endowment, Seminary Burses Fund, Seminarian Endowment Fund, and Simon Scholarship Fund. Each endowment has been established with donor restricted funds. As required by generally accepted accounting principles, net assets associated with endo"r¡ment funds are classified and reported based on the existence or absence of donor-imposed restrictions.
31 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OF'FICE JEFFERSON CITY, MTSSOURT
NOTES TO FINANCIAL STATEMENTS
The Board of Directors of the Diocese has interpreted Missouri's enacted version of the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds unless there are explicit donor stþulations to the contrary. As a result of this interpretation, the Diocese classifies as net assets with donor restrictions (a) the original value of gifts donated to the perpetual endowment, þ) the original value of subsequent gifts donated to the perpetual endowment and (c) accumulations of the perpetual endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fi.md. The remaining portion of the donor restricted endowment fund that is not retained in perpetuity is appropriated for expenditure by the Diocese in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with the UPMIFA, the Diocese considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds.
The duration and preservation of the fund The purposes of the Diocese and the donor-restricted endowment fund General economic conditions The possible effect of inflation and deflation The expected total return from income and the appropriation of investrnents Other resources of the Diocese The invesünent policies of the Diocese
Endowment net asset composition by type of fund as of June 30,2019 is as follows:
Total Without donor With donor endowment restrictions restrictions net assets
Donor-restricted endowment funds $ $ 1,517,852 $ 1,517,852
Endowment net asset composition by type of fund as of June 30,2018 is as follows:
Total Without donor With donor endowment restrictions restrictions net assets
Donor-restricted endowment funds $ g 1,446,117 $ 1,446,117
32 THE CATHOLIC DIOCESE OF JEFFERSON CITY - CHANCERY OFFICE JEFFERSON CITY, MISSOTJRI
NOTES TO FINANCIAL STATEMENTS
Changes in endowment net assets as of June 30, are as follows:
Total V/ithout donor With donor endowment restrictions restrictions net assets
Endowment net assets, June30,20l7 $ s r,402,228 $ 1,402,228 Contributions 3,889 3,889 Net investment income 94,516 94,516 Amounts appropriated for expenditure (54,516) (54,516)
Endowment net assets, June 30, 2018 1,446,117 1,446,117
Contributions 662 662 Net investment income 96,998 96,998 Amounts appropriated for expenditure 5,925) (25,925)
Endowment net assets, June 30, 2019 $ $ 1,517,852 $ 1.s17 ,852
NOTE 10 - FAIR VALUE MEASUREMENT
A portion of the Diocese investments are held in a pooled investment account with The Catholic Diocese of Jefferson City Fund. Pooled investments include cash and cash equivalents, common stocks, certificates of deposit, municipal bonds, U.S. government agency securities, fixed income mutual funds and alternative mutual funds. The Diocese investments were allocated 48% equities and 52Yo fixed income at June 30,2019 and at June 30, 2018.
The Diocese deposits funds in excess of three months of operating needs in The Catholic Diocese of Jefferson City Fund. The Depositor's fund program operates similar to a money market account and pays interest on the deposited funds competitive with current market rates. Interest rates on deposits varied at June 30,2019 and 2018, from 1.50% to 3.50%o, depending on the term of the deposit.
A portion of the Diocese investments are held in a pooled investment account with the Mission Diocese Fund, LLC. These pooled investments include coÍrmon stocks (86%) and fixed income securities (14%).
JJ THE CATHOLIC DIOCESE OF'JEFFERSON CITY _ CHANCERY OFF'ICE JEFFERSON CITY, MTSSOURI
NOTES TO FINANCIAL STATEMENTS
Fair values of assets at June 30,2019 are as follows:
Fair value Level I Level2 Level 3
Pooled investments Equity securities $ 1,236,441 $ 1,236,441 $ $ Fixed income securities r,344,644 666,334 678,3r0 Total 2,581,085 1,902,775 678,310
Depositor's Fund 14,775,335 14,775,335
Mission Diocese Fund 147,420 147,420
Total investments $ 17,503,940 $ r,902,775 $ 15,601,065 $
Fair values of assets at June 30,2018 are as follows:
Fair value Level 1 Level2 Level 3
Pooled investments Equity securities $ 1,174,901 $ 1,174,901 $ $ Fixed income securities I,289,998 639,254 650,744 Total 2,464,899 1,914,155 650,744
Depositor's Fund 6,495,2r3 6,495,213
Mission Diocese Fund 143,454 143,454
Other 115,377 115,377
Total investments s 9,218,943 $ 1,929,532 $ 7,2gg,4ll $
NOTE 11- PROPERTY AND CASUALTY INSURANCE
The Diocese administers a property and casuaþ insurance program for the Diocese, parishes, schools and other Diocesan entities. The Diocese's risk management plan includes retention of the first $45,000 for each property claim, $95,000 to $498,000 for each flood claim and $25,000 of each general liability claim. Claim amounts in excess of the selÊinsured retentions are covered by commercial excess insurance.
34 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEF'FERSON CrTY, MISSOURI
NOTES TO FINANCIAL STATEMENTS
Generally accepted accounting principles require tha/' a liability be accrued for reported claims as well as claims incurred but not reported. The Diocese has recorded an estimated liability for losses under this selÊinsured program of $319,357 and9296,422 at June 30,2019 and 2018, respectively, which includes an estimate for known losses and for estimated losses incurred but not reported. The estimated loss for incurred but not reported claims is based on an actuarial determination. Although management believes the estimated liability for losses is adequate, the ultimate liabilities may be in excess of or less than the amounts provided.
A summary of the activity in the property and casualty accrued liability account for the years ended June 30, follows:
Property and casualty accrued liability at June 30,2017 $ 319,673 Current year claims expense 347,232 Claims paid 70,483
Property and casualty accrued liability at June 30, 2018 296,422
Current year claims expense 98,766 Claims paid (75,831)
Property and casualty accrued liability at June 30,2019 $ 319,357
NOTE 12 _ CONTINGENCIES
In December 2010, the Diocese guaranteed regularly scheduled principal and interest payments to the Missouri Health and Educational Facilities Authority on behalf of Fr. Augustine Tolton Regional Catholic High School for construction bonds. The original bonds were refinanced in November 2016 with a new maturity date of December 203I. The terms of this refinancing require the Diocese to continue to guaranty the regularly scheduled principal and interest payments. In conjunction with this guarantee, the High School and Diocese executed a reimbursement agreement requiring the High School to reimburse the Diocese for any amounts paid by the Diocese under the guarantee agreement. The High School and Diocese also executed a subordinated deed of trust and security agreement that grants to the Diocese a secwity interest in the real and personal properly of the High School. The principal balance of the High School bonds outstanding at June 30,2019 and June 30, 2018 was $6,062,015 and $6,828,308, respectively. The High School is current with its scheduled principal and interest payments.
35 THE CATHOLIC DIOCESE OF JEFFERSON CITY _ CHANCERY OFFICE JEF FERSON CrTYo MTSSOURT
NOTES TO FINANCIAL STATEMENTS
The Diocese is involved in various pending or potential claims. At this time, few of the matters have involved formal complaints, demands for specific remedies or litigation. Among the pending or potential legal claims against the Diocese, some are related to allegations of past misconduct by priests. Based upon consultation with outside council, the ultimate resolution of the pending or potential claims cannot be predicted with certainty, thus it is impossible to estimate the amount or range of potential loss.
36