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Is the Church Too Trusting? (3346)

Arrest of Philadelphia archdiocesan financial officer renews questions about protecting the Church from mismanagment.

03/16/2012 Comments (16)
John Moore/Getty Images

Archbishop Charles Chaput of Philadelphia: 'People are angry about this loss, and they’re right. So am I. There’s no excuse for it.'

– John Moore/Getty Images

PHILADELPHIA —  The former chief financial officer of the Archdiocese of Philadelphia, Anita Guzzardi, turned herself in this week to the Philadelphia District Attorney’s Office on charges relating to the alleged embezzlement of more than $900,000.

She faces charges of theft, forgery, unlawful use of a computer and related crimes.

Guzzardi was promoted to CFO last July, but before even one month on the job, the D.A.’s office alerted the archdiocese to certain accounting irregularities reported to the D.A.’s office by a credit-card company. After a preliminary internal forensic financial investigation by the archdiocese, she was terminated a week later, according to the archdiocese. The archdiocese continued the financial investigation and has shared all of its findings with the D.A.’s office.

“It was discovered that [Guzzardi] had used numerous checks drawn from the Archdiocese of Philadelphia general fund to pay on her two personal accounts,” the D.A.’s statement said. “In total, from 2005 to July 2011, Guzzardi used 184 archdiocesan checks to pay her AmEx [American Express] bills.”

Archbishop Charles Chaput said in a statement, “People are angry about this loss, and they’re right. So am I. There’s no excuse for it.”

As shocking as this case is, it’s hardly an anomaly. In January, Anita Collins, 67, was charged with embezzling more than $1 million dollars using a sophisticated system to manipulate the accounts-payable system of the Archdiocese of New York over a seven-year period. Nobody questioned the hundreds of checks she wrote at the archdiocese to cover small expenses, like office supplies and utility bills. In reality, the money paid for expensive dolls she kept in her home, according to published reports.

“Sadly, there will always be individuals who seek to exploit and circumvent whatever system is established,” said Joseph Zwilling, spokesman for the Archdiocese of New York, at the time. “But we will remain vigilant in our oversight.”

Archbishop Chaput said that while most employees are honest, a few are not.

“Precisely because religious organizations run on the good will of the people they serve and the dedication of their staffs, they can easily become too trusting in their internal safeguards,” he said. “But that only makes the need for tight financial controls and accounting procedures more urgent.”

The archbishop wrote that new procedures are in place, along with more rigorous internal controls and tighter budget discipline, as well as a demand for improved skills in everyone tasked with the management of archdiocesan resources.

In 2007, the U.S. Conference of Catholic Bishops’ Accounting Practices Committee recommended several ways to enhance the financial governance in the thousands of parishes across the country, including diocesan-wide training of parish councils, completion of an annual internal-control questionnaire, as well as internal audits.

Chuck Zech, founder of the Center for Study of Church Management at the Villanova School of Business, performed a study which surveyed Catholic diocesan CFOs and found that 85% of the reporting dioceses had experienced embezzlements within the past five years.

“The basic underlying problem is, as a Church, we’re too trusting,” Zech told the Register.

Zech said that one of the best things a parish or diocese can do is have, as the USCCB recommended, random internal audits and ensure that multiple people sign off on transactions.

Zech did say that the Church as a whole is improving with both preventing and identifying financial improprieties. “In the past we tried to be pastoral about it. We attempted to work it out behind the scenes,” he said. “Now, we go to the police. And that’s an improvement.”

He added, “One of the prime tools to finding an embezzler is when someone goes on vacation. See if there’s a jump in donations.”

Experts like Zech express the hope that media coverage of church embezzlement scandals will lead other dioceses and parishes to take notice and begin scrutinizing their own systems.

“This doesn’t just happen in churches. It happens everywhere,” said Zech. “These incidents simply serve to remind us that we’re all human.”

Register correspondent Matthew Archbold writes from Philadelphia.

 

Filed under archdiocese of philadelphia, embezzlement, financial mismanagement