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Archdiocesan financial report

The accompanying condensed financial statements represent the activities of the chancery offices of the Archdiocese of Kansas City in Kansas for the fiscal year 2010-2011. These statements do not include the activities of our many parishes, schools and other ministries that are governed by their own boards and report their financial information separately.

Financial statements of the chancery offices of the Archdiocese of Kansas City in Kansas are audited by the independent CPA firm of McGladdery & Pullen, LLP.

This audit is conducted according to the generally accepted accounting principles in the United States. Their complete audit report of the financial statements for the fiscal years ended June 30, 2011 & 2010 is available on the archdiocesan website at: www.archkck.org. The condensed financial statements referenced above have not been audited by any independent public accountants. June 2011 & 2010 in this review relate to the archdiocesan fiscal year ending June 30, of both respective years.

CONDENSED STATEMENT OF FINANCIAL POSITION

Total assets of the chancery offices as of June 30, 2011, were approximately $117 million compared with $107 million in the previous year. Cash and investments increased approximately $13 million in the current year from the prior year. The majority of this is a reflection in the Deposit and Loan system operated by the archdiocese. Each year, the archdiocese takes in deposits from parishes that have excess funds and loans them back out to parishes that are constructing churches, schools and other facilities. During the latest fiscal year, our deposits increased from $55 to $60 million and, at the same time, loans were paid down from almost $62 million to $55 million. The combination of these two events generated an additional $12 million in liquid assets on the balance sheet of the chancery offices.

Over the last several years, we have talked about the significant amount of new building that has been taking place throughout our many parishes. The economic realities of the difficult financial period that we are operating in is finally reflected in our financial statements, which have seen almost no new lending in the last two years. And our parishes, like many other enterprises, are being careful with their finances and are trying to add to their reserve balances which in turn increases the amount of deposits on our balance sheet.

On the liability side of the ledger, total liability is increased from $59 million to just slightly over $64 million. As mentioned above, the significant increase in this area was the $5 million in additional deposits. All other liability accounts remained at about the same level as they were at the previous fiscal year-end. Unlike the year 2009 when the archdiocese was borrowing significantly from outside banks in order to fund our building activity, at year-end 2010 and 2011 the archdiocese had no funds borrowed from external sources.

Total net assets, which includes restricted and unrestricted funds, increased from approximately $49 million in 2010 to $52.5 million in 2011. Most of this increase in net assets is a result of continuing to add to our health care and dental care plan reserves.

CONDENSED STATEMENT OF ACTIVITIES

The condensed statement of activities shows the revenue and expenses related to all of the various ministries and programs that are carried out through the offices of the chancery. Total unrestricted revenue increased from $27.7 million in 2010 to $30.2 million in 2011. The single largest increase was in our investment income, which shows the strength of the financial markets for the last two years. During fiscal year 2011, investment income amounted to $5.7 million compared with $4.2 million in the year 2010.

The other significant increase in the revenue side was in the area of health and dental care premiums. The archdiocese manages a self-insured fund to provide health and dental care to all of our religious and lay employees. For the second consecutive year, gross revenue has increased over a million dollars while expenses remain fairly constant at approximately $15 million each year.

On the expense side of the equation, total cost increased approximately $1 million from 2010 to 2011. The most significant increase was approximately $600,000 in fundraising expenses which was primarily due to the introduction of the new Offertory Enhancement Program which was paid for by the archdiocese and offered free of charge to any parish in the archdiocese that wished to participate. The early results of this program are very encouraging and we think that the investment will pay significant dividends in the future.

Net assets increased almost $4 million from 2010 to 2011, with the most significant activity being about a $2.4 million increase in health and dental care reserves due to our significant increase in revenues mentioned above and the fact that claims expense has been fairly flat the last two years despite trends nationally that indicate significant increases in health care cost.

CONCLUSION

The staff at the Archdiocese of Kansas City in Kansas is pleased to provide you with this brief summary of our financial picture and the results of operations for the last two years. For those who have a keen interest in financial affairs, we would encourage you to take the time to review our complete audit report which, as mentioned above, is included on our website. The entire staff of the chancery office, both religious and lay, continues to be committed to the principles of good stewardship in the use of the resources that you make available to us.

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The Leaven

The Leaven is the official newspaper for the Archdiocese of Kansas City in Kansas.

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