Notes to Condensed Financial Statements FY 2015

The Management Discussion and Analysis and Financial Statements with footnotes are posted here.

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The Archdiocese
The Archdiocese of St. Paul and Minneapolis (the Archdiocese) was first established as a diocese by the Holy See in 1850 (originally Minnesota and the Dakotas) and elevated to an archdiocese 38 years later. Now comprising a 12-county area, there are 187 parishes and 90 Catholic schools (including elementary and high schools) within the Archdiocese.

The Archdiocese is home to roughly 825,000 Catholics, hundreds of clergy and religious men and women, and thousands of lay leaders, employees and volunteers who serve in parishes, Catholic schools and many other ministries.

The mission of the Archdiocese is to make the name of Jesus Christ known and loved by promoting and proclaiming the Gospel in word and deed through vibrant parish communities, quality Catholic education, and ready outreach to the poor and marginalized.

Petition for Relief under Chapter 11
On Jan. 16, 2015, the Archdiocese of St. Paul and Minneapolis (the “Debtor-in-Possession”) (the “Debtor”) filed a petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court (the “Court”) for the District of Minnesota. Under Chapter 11, certain claims against the Debtor in existence prior to the filing are stayed while the Debtor continues business operations as a Debtor-in-Possession.

These claims are reflected on the June 30, 2015, Statement of Financial Position as “Pre-Petition Accounts Payable and Accrued Liabilities” within the liabilities section of the statement. Additional claims may arise subsequent to the filing date resulting from rejection of executory contracts and a determination by the Court of allowed claims. The timely filing deadline for the filing of claims of sexual abuse and general creditor claims was Aug. 3, 2015.

The Debtor received permission from the Court to pay or otherwise honor certain of its pre-petition obligations, including the costs of employee wages, benefits and expense reimbursements.

Nature of Organization
The financial statements include all administrative and program offices and departments of the Chancery Corporation. Parishes, Catholic schools and other separately incorporated and operated Catholic entities within the 12-county area of the Archdiocese are not under the fiscal or operating control of the Chancery Corporation and therefore, in accordance with generally accepted accounting principles, are not included in the Chancery Corporation’s financial statements.

Basis of Presentation
The financial statements of the Chancery Corporation have been prepared on the accrual basis of accounting. The Chancery Corporation reports information regarding its financial position and activities according to three classes of net assets: unrestricted net assets; temporarily restricted net assets; and permanently restricted net assets, based on the existence or absence of donor-imposed restrictions.

Financial Statements
The financial statements of the Chancery Corporation for FY 2015 were not audited by an independent certified public accountant as a result of our inability to estimate our liability related to sexual abuse claims at June 30, 2015, due to each claim being unique and requiring factual development to determine the financial exposure. For FY 2014, our auditors issued a disclaimer of opinion and a going concern qualification on the sole basis of the uncertainty of the financial impact due to sexual abuse litigation and our resulting inability to provide sufficient evidence to form a basis for an audit opinion on litigation matters.

The accompanying condensed Statement of Financial Position and condensed Statement of Activities were prepared from our internal financial statements and in the interest of brevity, do not contain a similar level of detail and are not accompanied by complete explanatory footnotes. The full footnotes may be found here.

The Chancery Corporation acts as a conduit for special collections in the parishes designated by the U. S. Conference of Catholic Bishops or for local purposes. During 2015, $1,485,000 was contributed by parish communities for such collections and sent to the Chancery Corporation for remittance to the intended recipient. This amount includes $192,000 for service of debt at the Cathedral parish resulting from the building restoration.