To read Bishop William E. Lori's homily, delivered at all Masses on January 20 and 21, 2007, click here

GREENWICH, Sunday, January 21, 2007 - Citing the need to continue to ensure a high standard of financial responsibility that parishioners of the Catholic Church in the Diocese of Bridgeport deserve, Bishop William E. Lori has requested and received the resignation of Father Michael R. Moynihan as Pastor of Saint Michael the Archangel Parish (right) and Saint Timothy Chapel (below) in Greenwich.

Effective immediately, Msgr. J. Peter Cullen, Moderator of the Curia and Vicar General, has been appointed Temporary Administrator of the Parish until a new Pastor is named.

Bishop Lori made the announcement yesterday at the 4:00 p.m. Mass at Saint Timothy Chapel and the 5:00 p.m. Mass at Saint Michael Church. He is speaking at Masses today at the parish.

Father Moynihan has departed from the parish for a period of rest and reflection. He remains a priest in good standing and will be discussing a new assignment with Bishop Lori.

Financial Review Commenced Last Summer

"In his 14 years as Pastor, Father Moynihan has dedicated himself to deepening the faith of his parish family, and displaying a genuine concern for the spiritual welfare of both young and old, whether in Saint Michael's, Saint Timothy's, or Greenwich Catholic School," says Bishop Lori. "Those accomplishments are not in dispute here, as we come to terms with this sad news. Father Moynihan's failure to properly manage the financial administration of the parish is why a change must be made."

Father Moynihan's resignation was received based on the preliminary findings of a review of parish finances by an independent external auditing firm, which began in July 2006 (see timeline below).

When the Diocese was contacted by the civil authorities in July 2006 regarding whether a second operating account for the parish existed, the Diocese discovered one did exist. It was not reflected on the books of the parish and was unknown to both the Diocese and the Parish Finance Council (in violation of Diocesan policy, implemented in 2002, requiring only one operating account). The Diocese directed that this account be closed immediately, and the financial review was expanded.

This financial review was conducted with the knowledge and assistance of Father Moynihan and members of the Parish Finance Council.

Despite assurances from Father Moynihan and the Parish Finance Council that expenditures from this account were proper, on August 16, 2006, the auditors indicated that additional documentation was needed to complete the review and listed a number of "red flags," including large dollar amount reimbursements paid to Father Moynihan and other individuals without supporting documentation on file.

As a result of these preliminary findings, that same day, Bishop Lori, as a precaution to safeguard parish finances, relieved Father Moynihan of financial administration of the parish, pending the completion of the financial review. Since that date, Msgr. Cullen has been overseeing the financial administration for the parish, with Father Moynihan in charge of pastoral ministry.

Preliminary Findings

The external audit firm has completed a preliminary review for the period from February 2004 (when the last financial review of Saint Michael Parish was conducted by the Diocese) to July 2006, and the findings have been made available to parishioners (see summary letter below).

The audit firm has found that the substantial majority of expenditures from the off-the-books account appear to be for legitimate Church purposes, although approximately $529,000 are characterized as having "no supporting documentation" apart from "descriptions provided by the Pastor."

In late December 2006, five months into the process, yet another off-the-books account was discovered by the Diocese, in violation again of Diocesan policy. This second off-the-books account was not disclosed by Father Moynihan who, in August 2006, signed a certification that all parish accounts were included on the parish's books.

The report also reveals that the February 2004 review by the Diocese had several recommendations that were not adopted by the parish. Among these: all payments must be supported by invoices, and checks must never be paid to cash.

"Over the course of the past six months, we have offered Father Moynihan ample opportunity to provide documentation of the many unresolved items. His inability to do so has delayed the completion of the review," says Norm Walker, Chief Financial Officer of the Diocese of Bridgeport. "The preliminary findings of the review demonstrate that he simply cannot fulfill the financial administration duties required of a Pastor. We are particularly disappointed to discover that, in addition to the undocumented expenses and undisclosed accounts, the recommendations of the 2004 review were never implemented. Parish financial records, moreover, are badly tangled and, at points not yet well explained, they are intertwined with Father Moynihan's personal finances."

Father Moynihan's Letter to Parishioners

In an open letter to Saint Michael's parishioners (see letter below) distributed at Masses this weekend, Father Moynihan wrote, "This weekend, you will see the preliminary results of the ongoing financial review that will illustrate my deficiencies as a financial administrator. I am truly sorry for this, and this has prompted me to resign. I will continue to work with the audit firm to respond to the unresolved issues. I believe at the end of this process that there will be no findings of impropriety or wrongdoing on my part as your Pastor. If the final report should indicate unresolved or questionable expenditures, I will, to the extent that I can, make an appropriate financial contribution back to the Parish I love so much."

Father Moynihan added that he believes "the parish to be in sound financial condition - in a debt-free position and with significant assets."

Diocese-Wide Financial Improvement Plan Under Way

As part of the program of enhanced financial controls launched in the Diocese last fall, all 87 parishes in Fairfield County will undergo a financial review this year. At the conclusion of each financial review, the findings will be provided to, and reviewed by, the members of the applicable Parish Corporation, Parish Finance Council, and Parish Council. Among the key elements of this program, headed by the new Director of Parish Finance Services, Deacon William Koniers, are: to refine and update the 2002 Parish Accounting and Procedures Manual and deliver related training; provide guidance to parishes for improved controls over income; design new parish financial reports to provide more useful reporting and monitoring at all levels; and encourage parishioners with concerns about parish financial matters to speak directly with their pastors.

"Every parishioner has the right to expect that his or her contribution is being well spent on the good works of the Church," concludes Bishop Lori. "It is in that spirit that I wish to apologize for the financial mismanagement at Saint Michael's. I want to assure everyone in the Diocese of Bridgeport that, as each day passes, we are ever more vigilant in our efforts for the financial accountability and transparency necessary to earn your continued trust."

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Timeline: Saint Michael the Archangel Parish Financial Review Chronology

2/10/2004: Financial and operations review of Saint Michael the Archangel Parish conducted by the Parish Accounting and Finance Office of the Diocese of Bridgeport.

2/27/2004: Off-the-books parish account opened by Father Michael Moynihan.

4/7/2004: Report and recommendations from Financial and Operations Review of Saint Michael's issued by the Diocese to the parish.

6/2006: Saint Michael's selected for review of financial accounting procedures as part of a program to review all 87 parishes in the Diocese.

7/7/2006: External auditing firm is contacted by the Diocese regarding the financial review of larger parishes and, specifically, to begin with Saint Michael's.

7/12/2006: Diocese schedules financial review for Saint Michael Parish for 7/24/2006.

7/14/2006: Following contact from the civil authorities, the Diocese learns that an off-the-books parish operating account exists; Diocese had no prior knowledge of account and directed that it be closed immediately.

7/17/2006: Meeting with Bishop William Lori and Diocesan officials and Father Moynihan; Bishop Lori instructs Father Moynihan to inform the Parish Finance Council about the off-the-books account.

7/18/2006: Diocese engages an external audit firm to review Saint Michael's.

7/29/2006: Diocese receives a letter from the Parish Finance Council stating that off-the-books account has been closed and that they are conducting review of the account; Diocese contacts the Parish Finance Council to discuss their 7/27/2006 letter and inform them of the external review.

8/10/2006: Letter from the Parish Finance Council to the Diocese regarding their findings.

8/11/2006: Diocese sends a letter to the Parish Finance Council responding to its 8/10/2006 letter, thanking the Parish Finance Council for its work and requesting that work product be provided to external audit firm and reiterating that the external review will continue.

8/16/2006: External audit firm issues a letter to the Diocese listing "red flags" identified in the review and listing the records and information required to complete its review; meeting with Father Moynihan, Parish Finance Council, Bishop Lori, Diocesan officials, and the external audit firm; Bishop issues a Decree removing Father Moynihan from financial administration of the parish and appointing Msgr. J. Peter Cullen as acting financial administrator; Father Moynihan continues as pastor with all non-financial authority; Father Moynihan signs a certification that all parish accounts are included on the parish's books.

8/17/2006: Diocese completes the process of changing signing authority on parish accounts and removing Father Moynihan from accounts; Bishop's directive issued that all checks are to be sent to Diocese for approval and signature.

During September and October 2006, various conference calls and meetings occur with the Diocese, external audit firm, and Father Moynihan to discuss status of the review and outstanding requested information and documentation needed to complete the review.

11/20/2006: External audit firm issues letter requesting information from Father Moynihan in order to obtain, through selected samplings, confirmations of expenditures that lack independent corroboration.

12/14/2006: External audit firm issues letter listing information still needed from Father Moynihan for third party confirmations and to confirm unsupported expenditures and disbursements.

12/15/2006: Meeting with Bishop Lori, Diocesan officials, external audit firm, Father Moynihan, and Parish Finance Council members to review status of review and outstanding documentation and information needed for confirmation.

12/20/2006: Diocese learns of a second off-the-books parish account not reflected on the parish's records.

12/21/2006: Norm Walker, Chief Financial Officer, requests bank records for second off-the-books parish account from bank (receipt by Diocese still pending).

12/30/2006: Bishop Lori meets with Father Moynihan, and Bishop Lori requests Father Moynihan to consider resigning as Pastor.

1/18/2007: Bishop Lori and Diocesan officials meet with Father Moynihan and Parish Finance Council members; Bishop reiterates his request for Father Moynihan's resignation.

1/19/2007: External audit firm communicates to the Diocese the preliminary findings of its review; Father Moynihan delivers his resignation as Pastor to Bishop Lori.

Summary prepared by Norm Walker,
Chief Financial Office of the Diocese of Bridgeport,
of the Preliminary Findings by the External Auditors

January 19, 2007

Note: The External Auditing Firm has authorized the release of the preliminary report only to members of Saint Michael the Archangel Parish in Greenwich. For the general public's information, Norm Walker has prepared a summary of the significant preliminary findings in the following letter to Bishop William E. Lori.

The following is a summary of the significant preliminary findings as communicated to me by external auditors in their ongoing review of the Saint Michael the Archangel Parish's financial controls and accounting procedures and an expanded forensic review of the unrecorded bank account identified by the Diocese shortly after external auditors had been contacted to review the parish.

1. Most of the recommendations from the Diocesan internal review, completed February 10, 2004, of Saint Michael Parish, were not implemented. These recommendations included:

• Hiring a competent Parish accountant
• All payments should be supported by invoices
• Checks should never made payable to cash
• Budgets should be prepared and entered into the accounting system
• Annual financial reports should be made to the parish on a timely basis
• Proper employee documentation and filings should be maintained in personnel files

There were others but these are the most basic. In addition, the practice of the parish has been to record all funds received as a unrestricted contributions without regard to donor restriction or designated purposes.

2. The preliminary findings indicates significant violations of Diocesan policy:

• Multiple operating accounts (the investment account had checks and a credit card that were used to pay certain operating expenses)
• Not all parish bank accounts were included in the parish accounting system and reflected in parish financial statements
• Inadequate record keeping (failure to keep copies of invoices, employee records, etc.)

3. The unrecorded bank account first identified by the Diocese in July 2006 shortly before the beginning of the parish review, was used to pay operating and capital expenditures for parish and school as well as direct payments to Father Moynihan, payments to cash, and payments to Father Moynihan's personal credit cards. While the majority of expenditures have supporting documentation evidencing their legitimacy as parish expenditures, there is the lack of documentation for approximately $529,000 of disbursements.

The unsupported disbursements consist of the following:

• Payments to vendors. These vendor names also appear in the category of supported disbursements: $194,000
• Payments to Father Moynihan and Cash: $44,000
• Payments to Father Moynihan's personal credit cards: $141,000
• Payments by check to individuals of which at least $45 K was paid to the employees: $ 89,000
• Payments to other vendors: $ 60,000
  

• Father Moynihan and the Parish Finance Council have provided descriptions and explanations for most of the undocumented disbursements to Father Moynihan and to cash ($44,000) and to Father Moynihan's personal credit cards ($141,000). The payments to Father Moynihan have been explained as reimbursements to him for legitimate parish or school expenditures. However, most of these disbursements lack the necessary third party corroboration that is a minimum requirement for reimbursement. The audit firm has selected a sample of 75 such disbursements to seek independent confirmation and those requests have been sent out. That review continues.
  
  
• Additionally, there is inadequate documentation of the contributions from donors deposited into that account and a sample of 40 contributors have been sent confirmation requests. Based on the lack of documentation, it cannot be determined whether or not such funds had any restrictions associated with their donation.
  
  
• Additionally, significant sums were disbursed to two colleges from the unrecorded parish account. Father Moynihan has represented that he was given contributions specifically for these disbursements but no supporting documentation or information to corroborate this representation has been provided.
  
  
• Confirmations of the undocumented expenditures have been requested from a selection of the vendors who have provided other products or services to the parish or school that were documented.

4. As you know, in very late December, we discovered another unrecorded parish account that remains to be examined, although it is known that certain disbursements from this account were deposited to Father Moynihan's personal bank account.

Norman R. Walker
Chief Financial Officer, Diocese of Bridgeport

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