Monday, January 5, 2009

Closing 13 Catholic schools cost the MCCS $3.2 million

GSS at The Sad Saga alerts us to the posting of the 2007-08 MCCS financial report on the schools.dor.org website.  A quick read through the report turned up a few areas of interest.

First, it cost the MCCS a pretty penny to do away with 13 of its schools.  According to the auditors' report,

During fiscal 2008, the Bishop's Task Force on Schools recommended the closure of 13 schools effective July 1, 2008. In connection with this plan of closures, MCCS wrote-off assets with an original cost of $7,562,695 and a net book value of $2,006,948 related to the school closures. MCCS also accrued $975,000 of unemployment costs, $137,453 of health insurance costs and $100,000 of other costs in connection with the school closures.

Second, the MCCS had some pretty lucrative financial investments going for it during the fiscal year ending last June 30.  According to the auditors, it earned $176,910 in interest and dividends on investments of $1,172,520.  That is a rate of return in excess of 15%, no small feat given last year's market conditions. 

The auditors concluded their report with this heads-up:

Subsequent to year-end there has been substantial volatility in the United States financial markets. Major investment indices have experienced significant declines. The S&P 500 index, a stock market index comprised of 500 of the largest United States corporations, has declined from 1,280 at June 30, 2008, to 955 at October 21, 2008, an approximate 25% decline. In addition, many fixed income securities have also experienced significant valuation pressure as a result of turmoil in the credit markets. As a result, it is likely that the value of the investments has declined since year-end.

Finally, the MCCS still owes more than $840,000 on various notes used to finance the expansion of All Saints Catholic Academy, one of the 13 schools closed by Bishop Clark last June.  And it is still obligated to pay in excess of $136,000 for the leasing of various copiers, at least one of which it removed from Holy Cross, another of the closed schools.

9 comments:

Dr. K said...

They could have spent half that much on increasing the advertising of their product, and maybe generating some additional revenue that way, let alone educate our children in the faith. Just another reason why our Diocese is so stagnant.

~Dr. K

Dr. K said...

Mike, 6pm tonight NBC is going to show an investigative report about the MCCS costs to close the schools.

I hope you'll get the message in time, or are watching.

~Dr. K

Dr. K said...

They've got an article up at the NBC site, but no clip yet.

Here's the article: http://www.whec.com/article/stories/S731322.shtml?cat=566

~Dr. K

Mike said...

Got it, Dr. K. Thanks.

Anonymous said...

When I was the Marketing chairperson for our school's SAC, I asked the Doug Mandelaro why there was so little marketing for the schools, particularly in our part of the city. "It's so expensive" I was told. So we cobbled together enough money to do our own brochure, local ads, and grass roots marketing, which was having an effect. Then we were closed, and the diocese DENIED that there was no marketing done for our school. I even pointed out in the schools Marketing Plan that they provided me that we were excluded!

If they are 200 students short of projections, it's most likely because they didn't market the schools properly and took away all school choice from parents.

There were some underperforming DOR staff members who should have been the ones to take responsibility for declining enrollment, both at Buffalo Rd. and in the schools. But the kids and teachers are the ones who got the punishment.

Who will take responsibility for these new failures? Will Doug M. lose his job? How about Ms. Passero? Nope--it will be the rest of us who bear the brunt of mismanagement.
-HCMOM

Mike said...

HCMom said, "If they are 200 students short of projections, it's most likely because they didn't market the schools properly ..."

It's not that DOR didn't market their schools properly last year, but that they did not market them at all.

A proper marketing campaign most likely would have produced more students than their "experts" had predicted and that they could have accommodated in their scaled-down system.

Ergo, no marketing and their self-fulfilling prophecy became a reality.

Mike said...

HCMom,

From time to time there used to be a Catholic schools ad on the south facing billboard overlooking the little strip mall on the northeast corner of Lake Ave. and Latta Rd.

Was this one on the Holy Cross SAC projects?

Anonymous said...

Mike:
I'm not sure what you mean about that billboard. Had we wanted to use it, most likely we would have not had the money to create the ad (our budget was all but non-existent, but we managed to pull enough $ together for the brochure).

The DOR is no different than some of these companies seeking federal bailout--they have mismanaged their business, disrespected their core constituents, and now want the "taxpayers" (those of us who put money in the Sunday basket) to foot the bill. None of this has anything whatsoever to do with spreading Catholicism, educating kids in our faith, or even spreading the social justice that our liberal Diocese keeps yammering about. It's all about $$$$.
-HCMOM

Mike said...

HCMom,

The billboard is here. In 2005 and, I believe, 2006 it displayed whatever was the standard MCCS ad at that time for a couple of months early in the year.

A friend and I used to go to breakfast every week at the strip mall's greasy spoon. You can't miss the billboard from the parking lot and one of us would comment when the ad first went up each year.