Copyright © 2002, United States Conference of Catholic Bishops, Inc. All rights reserved.
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In April 1971, the United States Catholic Conference (USCC; now the United States Conference of Catholic Bishops [USCCB]) published Diocesan Accounting and Financial Reporting. This manual resulted from the work of an Ad Hoc Committee on Diocesan Financial Statements with the assistance of one of the then-"Big 8" accounting firms.
In 1981—after ten years of experience with the original manual, coupled with developments in the accounting profession (especially SOP 78-10) and the recommendation of the Diocesan Fiscal Management Conference (DFMC)—the need for a revision of this landmark document was clearly evident. This task was undertaken by the Accounting Practices Committee (APC) of the USCCB. The committee's work was aided by advisors from six public accounting firms and input from dioceses across the country. The revision consisted of the preparation of acceptable accounting principles and reporting practices for external financial reports. Titled Accounting Principles and Reporting Practices for Churches and Church-Related Organizations, the revision was approved at the November 1981 General Meeting of the U.S. Catholic bishops; subsequently three appendices, including illustrative financial statements, were prepared and released by the APC.
While the development of generally accepted accounting principles (GAAP) in the not-for-profit sector has traditionally been slower than in the commercial sector, this situation has changed dramatically since the last rewrite of the USCCB accounting manual. For example, in 1993, the Financial Accounting Standards Board (FASB) issued two Statements of Financial Accounting Standards (SFAS) that represented significant changes in accounting and reporting for not-for-profits entities:
These two FASB Statements established standards applicable to all not-for-profit organizations, with the consequence that provisions in AICPA Guides and Statements of Position that are inconsistent with these standards were no longer acceptable specialized accounting and reporting principles and practices. As significant as these two statements were to not-for-profits, the FASB has not slowed the pace of change, and the complexity of accounting principles and reporting practices has increased significantly. Today more than one hundred pronouncements define GAAP for not-for-profit organizations. Generally accepted auditing standards (GAAS) have also been radically changed by the Office of Management and Budget's issuance of Circular A-133, which impacts virtually every social service program sponsored by the Catholic Church in the United States today.
- SFAS No. 116—Accounting for Contributions Received and Contributions Made
- SFAS No. 117—Financial Statements of Not-For-Profit Organizations
With this background, it was apparent that Accounting Principles and Reporting Practices for Churches and Church-Related Organizations was out of date and provided little, if any, guidance to those it was intended to serve. Couple this with demands from donors for increased accountability and increased scrutiny from government entities, and a major rewrite of this manual was not only obviously necessary but also long overdue. This monumental task was once again given to the APC.
After a thorough study and review, the APC has recommended the use of Practitioners Publishing Company's Guide to Preparing Nonprofit Financial Statements (PPC) as a replacement for the outdated manual. Therefore, the PPC will provide general accounting guidance for the Catholic Church in the United States. However, due to the unique nature of various church financial accounting and reporting issues, the APC has prepared this companion manual to the PPC. The companion manual is intended to offer additional guidance to dioceses concerning these unique issues that are not covered in the PPC manual.
Finally, I offer my deep gratitude and profound appreciation as well as that of my brother bishops to the APC for their professionalism, time, and talent in completing this most important project.
Most Reverend Henry J. Mansell
Bishop of Buffalo
USCCB Accounting Practices Committee
Mr. Paul A. Ward Jr., Chairperson, CPA
Diocese of St. Petersburg
Mr. Thomas J. Baker, CPA
Archdiocese of St. Paul and Minneapolis
Rev. Henry T. Chamberlain, SJ, MBA
General Curia, Society of Jesus
Sr. M. Diane Cook, OSB, CPA
Benedictine Sisters of Erie, Inc.
Mr. Anthony G. Depenbrock, CPA
Diocese of Covington
Sr. M. Pius Fahlstrom, OFS, CPA
Sisters of St. Francis
Joseph E. Ingraham
Diocese of Baton Rouge
Thomas A. Kurkowski, CPA, MST
Diocese of Green Bay
Mr. Joseph LiPari, CPA
Diocese of Paterson
Robert Metzger, SM, CPA
Mr. Philip J. Ries, CPA
Diocese of Orange
Mr. Wayne A. Schneider, CPA
Archdiocese of Milwaukee
Mr. William G. Weldon, CPA
Diocese of Charlotte
Mr. Ken Korotky, CPA
Chief Financial Officer, USCCB
Ellen Harrison, CPA
KPMG Peat Marwick LLPMs.
Deborah Ringer, CPA
Kerber, Eck & Braeckel, LLP
Mr. Karl R. Sening, CPA
Mr. J. Malcolm Visbal, CPA
Grant Thornton, LLP