As a grand jury investigates the financial irregularities of one Roman Catholic priest in the Diocese of Brooklyn and church officials try to recover $1.8 million that was improperly spent by another, diocesan leaders acknowledge that as many as one out of five parishes lack the basic lay oversight of finances required by church law.
Even in some parishes that have the oversight panels, which are called parish finance committees, the small groups of parishioners rarely meet, or they serve as a rubber stamp for the pastors who appoint them, church officials say.
Diocesan leaders assert that the finance committees are not intended to act as pastor police and may not have been able to prevent the kinds of problems that surfaced in the two parishes. But they worry that the financial misdeeds may have eroded the trust between parishioners and their pastors that, until now, has underpinned the system of financial accountability.
"I could never do my job unless there was a level of trust," said Msgr. John J. Bracken, who as vicar for temporalities oversees diocesan finances. "If there were constant suspicions, it would become us against them."
Trust already has been replaced by confrontation in some parts of a church that has been battered by five months of scandal brought on by accusations of sexual abuse by priests. The role of lay finance committees has drawn increasing attention as the scandal has given new momentum to demands that the people in the pews be given greater say in governing the church — a promise held out by the Second Vatican Council in the 1960's but, in the eyes of many, one that remains unfulfilled.
"We have to make a real, significant effort to be transparent and accountable," Monsignor Bracken said. "It is the people's money, and we have to be very conscious of how we account for it."
American bishops have long been concerned about financial controls. In 1995, the United States Conference of Catholic Bishops, citing an increasing incidence of embezzlement and fraud at that time, published tough, detailed guidelines on maintaining internal controls.
Earlier, a revision of canon law completed in 1983 required every pastor to establish a finance committee, composed of Catholics drawn from the parish or from outside of it.
Pastors are expected to consult the committees on any expenditure of more than $30,000 before seeking diocesan approval. The committees also are supposed to play an active role in preparing parish budgets and financial reports.
In practice, however, compliance with the canon law requirement is spotty. No reliable figure exists on the number of parishes that have finance committees, but Mark F. Fischer, associate professor of theology at St. John's Seminary in Camarillo, Calif., and an expert on lay involvement in the church, estimated that about 75 percent of parishes nationwide have them.
In an internal survey, 176 of 220 parishes in the Diocese of Brooklyn said they had finance committees. The survey was started in 1999 but was rushed toward completion this week after inquiries from reporters for The New York Times.
The Archdiocese of New York has 413 parishes, but the number of finance committees was not readily available, said the diocese's spokesman, Joseph Zwilling. He said the late Cardinal John O'Connor had waged a campaign to have all the parishes institute them. He also encouraged them to set up parish councils, which are not mandatory, to advise pastors on nonfinancial matters. There have been no recent accusations of financial mismanagement in parishes in the New York Archdiocese.
In a survey of parishes in the Brooklyn Diocese by The Times, pastors gave a variety of reasons for why they had not followed canon law and formed finance committees. Some pastors said they had just arrived and were in the process of setting them up. Others said they relied on trustees or on the parish council to do the same job.
Just finding people with the time or expertise to serve on a committee can be difficult, some pastors say, especially in poor or immigrant parishes. Other pastors, used to almost complete control, view greater lay involvement as bureaucratic interference, church officials say.
Monsignor Bracken said he has given pastors until the fall to comply or be ordered to create committees. "In this day and age this is unacceptable," he said. "Not to do it is dumb."
Monsignor Bracken took over as vicar for temporalities five years ago and had no financial background. He says he has a staff of a dozen people to supervise the finances of 220 parishes serving 1.8 million Catholics in Brooklyn and Queens.
In parishes where finance committees do exist, he conceded, it is impossible to gauge how effectively they safeguard finances.
The current system of financial accountability clearly failed in the two cases in the Diocese of Brooklyn, a diocese where parishioners have already had to absorb reports of sexual abuse allegations against at least seven priests in recent months.
Parishioners at Our Lady Queen of Martyrs in Forest Hills are still reeling from disclosures in the fall of 2000 that their pastor, Msgr. Thomas J. Gradilone, had funneled $1.8 million from parish collections into a secret account. He gave away most of the money to three ex-convicts in what Bishop Thomas V. Daily called "clearly fraudulent" actions.
The Forest Hills parish, one of the largest in the diocese, never had a finance committee to oversee its pastor's financial dealings. But after parishioners complained that the church looked run-down despite bountiful Sunday collections, Bishop Daily asked the Queens district attorney to investigate.
Prosecutors found a "disturbing pattern of questionable financial transactions," but no charges were ever brought against Monsignor Gradilone, who is now retired. The broad discretion that a pastor has in his own parish allowed him to claim that the disbursements were charitable contributions, thwarting the prosecutor's efforts to charge him.
The diocese and the parish are now attempting to recover the lost money through insurance claims.