V iewpoint
Special Issue – DFMC
Annual Conference
September 2014
Welcome to DFMC 2014 in Chicago.
SCHEDULE OF EVENTS
“Chicago–A City of Cultural Treasures”*
Inside This Issue
Welcome to Chicago!..................1
Convocation 2014 –Remarkable
Spirit and Great Memories...........2
Gallagher at DFMC 2014
We hope to see you at our many events.
Audax Award Winner— 2014.......3
SUNDAY, SEPTEMBER 21
Preparing for the Unthinkable –
Wet Document Loss ...................4
Evening
Gallagher Exhibit. Gold Sponsor
Gallagher Exhibit at DFMC
Maximizing your Social Good: .....5
h
The Evolution and Impact of Socially
Responsible Investing..................5
MONDAY, SEPTEMBER 22
Morning
Afternoon
Evening
Exhibit at DFMC
DFMC Tours
Cubs vs. Cardinals at Wrigley
with Brit & BPIC
h
TUESDAY, SEPTEMBER 23
Morning
Noon
Evening
Gallagher Religious Practice
internal meeting
Munch Re Luncheon
Gallagher hosts annual Gala
Dinner
in the Grand Ballroom AB at the
Hyatt Regency, Chicago
“Pope Francis declared that sound financial
management was a pillar of his greater
mission: aiding the poor and underprivileged.”
Shawn Tully, Fortune Magazine, August 14, 2014
Stop “Wining” Property Data and
CAT Modeling: See the Light, Get it
Right!..........................................6
*see pg. 35 for The Key to the Treasure Chest
Dear Colleagues of the DFMC –
We are honored to once again participate in the events of DFMC,
where we reinforce the profession of the diocesan finance officer
and its many temporal responsibilities for the Church. Gallagher
has been supporting this event for more than 30 years and I was
thinking about that perspective, let alone the feeling of the newly
hired CFO that is here for his or her first time. Actually, our CEO
and Chairman, Pat Gallagher, would be the one I could turn to, to
get that 30 year perspective! His untiring support and commitment
to participate in this event year after year is a witness to Gallagher’s
taking very serious this work for the Church.
Let’s think back 30 years ago - Pat was a young producer serving the
Archdiocese of Chicago, having grown up in a home where his Dad spent
a good deal of his career working to forge the Bishop’s Plan program. So
back then, Gallagher maybe had 800 employees and revenue of $10
million. Today Arthur J. Gallagher & Co. will exceed $3 Billion in revenue
and employ over 20,000 around the world, and the Church remains the
cornerstone of our work…and Pat is leading the charge.
Thank You Partners!....................7
KEEP CALM AND CHARTER ON..8
Convocation 2014 • Napa CA.....8
Risk Management and the Catholic
Church: Are We Exposed? ..........9
Trends, Challenges and Insight
in Property & Casualty (P&C)
Underwriting of Diocesan
Accounts - summary of session at
Convocation 2014.....................12
The Benefits of Accessing Payroll
Data in a Decentralized Payroll
Environment..............................13
Defined Contribution and
Total Rewards – Trends in
Diocesan Approaches to Employee
benefits....................................15
Merits of Costs Allocation
Methodologies...........................15
The Florida Dioceses -Collaboration
is the Heart & Soul....................16
Convocation Presentation –
June 2014.................................16
And as I reflect on the new CFOs attending for the first time, I also
quickly think about Patrick Markey, the new Executive Director of
DFMC, who is carrying the weight of this, his first DFMC! We
can certainly feel his presence, his leadership and his compassion to
serve. We at Gallagher are so grateful for his hospitable touch &
engagement and wholeheartedly embrace his leadership.
Church Facilities Use – Exempt from
Regulation or Open to the Public?.17
So whether this is your first or your 30th or somewhere in between,
welcome to DFMC and make the most of it – energize, learn, pray,
share relax, prepare, collaborate - we are so fortunate to have this
experience together.
Resources Online @ The Post .. 23
Religious Employers
and PPACA................................18
What is the Reta Trust?..............20
Clergy Benefits..........................22
EventUs!....................................24
An update on The POST............26
Napa Think Tank — A Collaborative
Roundtable Since 2012.............28
What Every Chancery Needs
to Know.....................................29
14BSD26054B
Peter A. Persuitti & the Gallagher Diocesan Team
Parish and School Accounting in the
Cloud - Success Stories from the
US Catholic Dioceses...............32
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Viewpoint
September 2014
Bringing
COLLABORATION
to the forefront.
Thank You Partners!
2014BSD23491C1
Meritage Resort & Spa | Napa, CA | June 4-5, 2014
Viewpoint
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September 2014
Audax Award Winner— 2014
Most Reverend Dale J. Melczek, Bishop of the Diocese of Gary
I have been so fortunate to have been able to work with Bishop Dale Melczek during his entire twenty-two years
as Bishop of the Diocese of Gary. Appointed Bishop of the Diocese of Gary on August 19, 1992 by Pope John
Paul II, Bishop Melczek has worked tirelessly to combat racism and poverty in Gary and throughout the world.
Bishop Melczek has never shied away from any challenge or task.
A native of Detroit, Michigan, Bishop Melczek was ordained to the priesthood on June 6, 1964. On December
3, 1982, Pope John Paul II appointed him Auxiliary Bishop of Detroit. Cardinal Szoka ordained him Bishop on
January 27, 1983. He was then appointed Bishop of the Diocese of Gary on August 19, 1992.
Within a few short years of his arrival in Gary, Bishop Melczek was elected to the Board of Catholic Relief
Services. Starting in 1996, he has visited the Philippines, Myanmar, Cambodia, Indonesia, East Timor, the
Democratic Republic of Congo, Congo Brazzaville, and Tanzania. Bishop Melczek’s work on behalf of
Catholic Relief Services only underscores his deep-rooted belief in the dignity of all men and women.
Most Rev. Dale J. Melczek
Diocese of Gary
In 2002, Bishop Melczek began to address the sin of racism in Northwest Indiana as a major priority with his
first pastoral Letter: “The Many Faces of Our Church: a Pastoral Letter on Cultural Diversity.” In the parishbased discussions that followed the issuance of the Pastoral Letter, Catholics came together to examine the
contributions of their diverse cultures to the Church and to society. The following year, Bishop Melczek wrote
his Pastoral Letter “Created in God’s Image: a Pastoral Letter on the Sin of Racism and a Call to Conversion.”
This second Pastoral Letter was also discussed in parish-based small faith-sharing groups. These were followed
with listening sessions in four areas of the diocese and with a Rite of Atonement in the Cathedral.
Bishop Melczek also co-chaired the Race Relations Council of Northwest Indiana from 2002-2007.
From Detroit to Gary with trips to many foreign countries in between,
Bishop Dale Melczek has fearlessly confronted the most difficult and the most
emotionally charged issues of man’s dignity, of poverty, and of racism. He is truly
a bold and courageous leader.
—Mike Wroblewski, Managing Director, Gallagher Bassett Religious Practice
Bishop Paprocki with the J.P. Gallagher “Audax” Award 2013 Boston
Past J.P. Gallagher
Audax Award Recipients
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Convocation 2014 –Remarkable Spirit and Great Memories
Peter A. Persuitti, Managing Director, Arthur J. Gallagher & Co.
In early June, more than 200 diocesan and service provider
professionals, dedicated to the temporal administration of
the Church, came together for a two-day 2014 gathering at
The Meritage Resort & Spa in Napa, California. Since 2002,
Convocation has brought together diocesan partners to share best
practices and network around issues in the financial, legal and
human resource areas.
We selected the Napa location, given the Catholic setting that Tim
Busch has demonstrated in all of his hotels in the Pacific Hospitality
Group (each with a Chapel and Christian Art) and the success of the
emerging Napa Institute for the Catholic Laity and Clergy.
This time around, though, we found ourselves with a larger than
life challenge of funding an event that would certainly exceed any
one partner’s budget. Yet, there was a sense of wanting to pull
We had an overwhelming positive response on the “Post
Convocation Survey” and thought his comment from a survey
was so welcomed:
“I was very impressed with the enthusiasm and engagement
of the clients / attendees / workshop speakers. The event went
beyond my expectations.”
together on this and we began asking other service provider partners
to help with contributions. All of a sudden we had more than 50
partners, contributing over $120,000. We had a strong financial base
on which to now go forward with a remarkable program.
The meeting kicked off with speaker Patrick Lencioni, Founder
and President of The Table Group, a consulting firm dedicated
to building healthy organizations. Patrick is a bestselling author,
speaker and consultant with more than two decades of experience
working with CEOs and their executive teams. He is also the
author of many bestselling books including The Five Dysfunctions
of a Team, which continues to be a weekly fixture on national
bestseller lists; his books have sold over three million copies. I am
just learning of Patrick’s role with the Amazingparish.org and that
too is an exciting initiative.
The meeting was filled with great spirit against the backdrop of
vineyards, a lovely chapel, a reception in the large cave below the
vineyards and a fun entertainment center for bowling and pool
during the late hours of the evening.
Attendees were able to choose which of the workshops they would like
to attend, as the meeting offered six workshops per hour over a five
hour span over two days – that’s 30 workshops. Some were repeated to
allow flexibility in scheduling. A sampling of the presentations (all are
posted online at the Convocation website) include:
• Insights - Trends and Challenges in P&C Underwriting of
Diocesan Programs
• A Faith-Based Journey from Wellness to Total Wellbeing
• Document Recovery Awareness – Now What Do We Do?
• An Update on Diocesan Loss Trends in the Context of The
Business of Catholic Education: 2014
• Improving Financial Performance through Enhanced
Operational Efficiency and Resource Allocation
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2
3
• Spotlight on Religious Employers under PPACA
• Keeping Children Safe in a Changing Environment
The meeting ended with a closing luncheon and speaker, Deacon
Bernard Nojader, MSW, MA, USCCB, the Executive Director of
the Secretariat of Child and Youth Protection at the United States
Conference of Catholic Bishops, reporting on the Charter, ten
years later.
From top to bottom: 1. Mass Concelebrated by Bishop Vasa of the Diocese of Santa Rosa with
Archdiocese of San Francisco’s Rev. John Piderot and Rev. Tarantino. 2. The meeting kicked off
with speaker Patrick Lencioni, Founder and President of The Table Group. 3. Lupe Moncivaiz
Warren of the Diocese of San Jose and Ampy Jimenez of Gallagher’s Miami Team in the front row!
From the very beginning the message Patrick Lencioni gave us “be
open and communicate.” We lived this out through our Convocation
experience and I hope we all have taken this back, not just letting it
be a wonderful memory but the spirit of what we can become!
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Convocation
Beat
September 2014
Preparing for the Unthinkable – Wet Document Loss
An overview of the presentation by BMS CAT at the Convocation in Napa
Documents are
those items that have
different meaning
based on your needs
and business. It can be
records and X-rays at
hospitals, collections
at libraries, baptismal
and property records at
churches; all items that
we keep use and can’t
be replaced. Records
and documents
can be damaged by
water (flood, broken
plumbing fixtures,
water from fire
suppression, black
water sewage), by improper storage and are affected by rodents or
microbial issues and area wide disasters (hurricanes, tornados, floods,
earthquakes). So what can be done when documents are affected?
• First are my documents wet
»» Use moisture meters to determine the level of moisture in the
paper (Delmhorst Meter is a brand and is available for
purchase to have on hand)
»» Acceptable levels of moisture 25% to 39% or 4.5 to 7 on the
Delmhorst Meter
»» Humid – damp 44% to 56% moisture content or 8.0 to 10 on
the Delmhorst meter
»» Unacceptable Moisture level 61% to 100% OR 11 TO 18 on
the Delmhorst meter
• Corrective Actions – handle with urgency to avoid loss of
documents
»» Humid – Damp levels – dehumidification equipment
(portable desiccant units) brought into the storage area and
run to reduce the moisture in the area and out of the paper
»» Unacceptable Moisture levels in the paper – to stop the
deterioration, freeze the documents in the storage boxes or put in
storage boxes if on shelves and freeze. Place frozen documents in
freeze dry chambers where the moisture leaves the document as a
gas and the document is never wet again. Documents once dried
can be cleaned and re-boxed for use or storage
• Large quantities of documents can be stored in a refrigerated
semi-trailer where they will be frozen and kept frozen during
transport to chambers
• Special Media – Schools, hospitals and churches may store
massive amounts of special media (X-rays, micro film/fiche,
historic documents deeds, plans)
• Most important thing on microfilm is that once it is wet do not
let it dry. The film must be processed while it is wet or the
gelatin layer will stick to other things and be ruined
• Use gloves when handling wet material
»» For long term storage it can be frozen but not freeze dried,
must be thawed and wet processed
»» Historic records may need special handling depending on the
media and age
• Regulatory Compliance Must be Considered to Maintain Privacy
»» HIPPAA Health laws
»» FACTA-FTC consumer information laws
»» Gramm leach Bailey Act requires financial institutions to
protect consumers
»» Various State Laws on privacy
»» Must meet reasonable standards to protect the information to
avoid liability
• Destruction of Unwanted documents to meet laws listed previously
»» Special disposal may be required
»» Use of secure shredding facilities
»» Employees are screened and are aware of privacy laws
»» Chain of custody is tracked
»» Certificate of destruction is issued
• Wrap Up
»» Documents are important to consider in your emergency plans
»» Consider which documents are needed for continuing
operation
»» Sort documents after they are frozen (while you are sorting
they are deteriorating)
»» Consider your storage area and is it the right place to store
paper or film
»» Are your documents required to be kept by law and you must
maintain their privacy
»» Disposal of documents may require secure handling
»» Replacement maybe expensive or not available
• Documents, records and collections can be easily damaged but
can be recovered with proper procedures in place, knowledge of
what to do and the use of proper equipment to complete the
drying and recovery process
For additional information contact Tim Coumbe
tcoumbe@bmsmanagement.com
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Maximizing your Social Good:
The Evolution and Impact of Socially Responsible Investing
Doing Good Work
Sustainable and responsible investing continues to grow. Why
should you invest responsibly? Many organizations participate to
provide positive social impact and support their mission, as well
as to consider Environmental, Social and corporate Governance
criteria (“ESG”), all while not compromising competitive longterm returns. Many are called to exercise faithful, competent
and socially responsible stewardship in how they manage the
organization’s financial resources. In particular, Diocesan leaders
are focused on the socially responsible investment guidelines of the
United States Conference of Catholic Bishops, as set forth in their
statement, Principles for USCCB Investments, on November 12,
2003. The USCCB investment policies cover the following areas:
protecting human life; promoting human dignity; reducing arms
production; pursuing economic justice; protecting the environment
and encouraging corporate responsibility.
How do you use SRI?
The implementation of Socially Responsible Investment (“SRI”)
guidelines, which is an ongoing process, impacts the following
phases of portfolio construction:
• Investment Manager Selection
• Investment Policy Statement
• Investment Manager Evaluation
SRI allows financial assets to be invested in a proactive manner.
In doing so, your consultant should work with you to identify
and evaluate investment managers that share your mission,
support issues on your behalf (i.e. corporate resolutions), suggest
the elimination of companies that may violate the spirit of the
investment guidelines and conduct independent reviews to assess
social criteria of portfolio companies.
A critical element to SRI strategies is the Investment Policy
Statement (“IPS”). The IPS must reflect the values of your
organization by:
• Stating the purpose of the investments and the investment
strategy
• Providing detail regarding SRI guidelines for managers, as well
as risk tolerance and performance objectives
• Assigning responsibilities and defining expectations of the
investment consultant and investment managers
• Outlining specific attributes of companies that are either:
»» Prohibited investments
»» Preferred investments
Lastly, you must monitor your investment performance and your
mission. Reporting should not only compare the performance
of portfolio’s investment assets against comparable benchmarks
(indexes), but should also review your managers against peer groups
and stated objectives within the investment policy statement on an
ongoing basis.
Your portfolio requires careful alignment of your mission, goals and
investment objectives, and you should not have to choose between
fiduciary responsibility and moral or social beliefs. At Arthur J.
Gallagher & Co., we listen intently to understand your purpose
and mission – so that it can be perpetuated in the work that we do
so that your mission may be achieved.
For nearly 40 years, the Institutional Investment & Fiduciary
Services team of Arthur J. Gallagher & Co. (Gallagher
Fiduciary Advisors, LLC, “Gallagher”) has worked with faithbased organizations to establish realistic investment goals and
objectives. For more about our services, visit www.ajg.com/
institutionalinvestment.
Karen D. Watson, CFA, AIF®
Area Senior Vice President
Institutional Investment & Fiduciary Services
Karen_Watson@ajg.com
Investment advisory services, corresponding named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an S.E.C. Registered Investment
Adviser. Gallagher Fiduciary Advisors, LLC is a single-member, limited liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Gallagher Benefit
Services, Inc., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal, or tax advice.
Quotation from SURVEYS post Convocation 2014 Napa
“This was a great contribution to the Church. It shows how much Gallagher and the collaborating partners care.”
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Convocation
Beat
September 2014
Stop “Wining” Property Data and CAT Modeling: See the Light, Get it Right!
CAT Modeling: The Benefit of Including Secondary Modifiers
In recent years, catastrophe (CAT) modeling for hurricanes and
earthquakes has become an essential resource for all players in the
property insurance marketplace. Underwriters use CAT models to
accurately assess risk and determine capacity and pricing; brokers
look to the models to help in program design; and insureds use
modeled results to better understand the property exposures in
their statement of values (SOV). As reliance on CAT modeling
grows, so does the need to better understand the numerous
variables that impact results, including secondary modifiers.
What are secondary modifiers?
There are certain primary data points required to model a given risk
(Year Built, Construction Class, Building Height and Occupancy
Type). Secondary modifiers are additional data points that provide
more detailed information on structural integrity and building
characteristics, including construction quality, roofing details,
cladding, opening protections such as storm shutters, and so
on. The list is comprehensive and changes occasionally with the
upgrade of modeling versions, so it is important to periodically
review the SOV.
Why are secondary modifiers used?
Proper assessment and inclusion of modifiers can have a significant
impact on the modeling results. Accurate secondary modifiers can
help the underwriter, broker and insured better understand the true
exposure inherent in a SOV. This knowledge of expected losses helps
insureds and insurers set acceptable program structure and sublimits.
How does the market use secondary modifiers?
Markets prefer information that is as detailed and accurate as
possible for their own analysis because it bolsters confidence in
their underwriting decisions. Full disclosure of information,
both good and bad, helps protect against unforeseen losses
and underwriters are more apt to bind the coverage if they are
comfortable with the information provided. Data accuracy also
bolsters the relationship with the market, as an aim for accuracy
and not the lowest price. Better data leads to better decisions. It
is important that these secondary modifiers are updated so that the
models can make the proper interpretations. Even if the available
information is unfavorable, it helps identify the risk – for both the
insurer and the insured. of a catastrophe.
How do secondary modifiers benefit insureds?
CAT models are instrumental in showing insureds where their
greatest exposures lie. One product of cat modeling is a heat map,
or an analysis that isolates building locations that are heavy drivers
of average annual loss (AAL) and probable maximum loss (PML).
Heat maps can help identify specific locations where secondary
modifiers could impact or influence coverage within a portfolio of
properties. Further analysis can determine construction upgrades
that will strengthen buildings against catastrophes. Some secondary
information may actually have a negative effect on model output.
Regardless of the impact of modifiers, insureds should declare and
include this information to obtain the most accurate results.
Conclusion
Beyond potentially affecting pricing and capacity offered, it is worth
noting that certain modifiers are rather easy to get and will provide
more accurate model results. For example, if a structural engineer
develops a certified plan that details design review (including
building characteristics such as the age and shape of the roof), it can
provide a better picture of what will happen when the structure is
exposed to certain stresses or forces. Further, best case scenarios can
be used for a cost / benefit analysis of upgrades, such as using adding
hurricane shutters to a particular location. Gathering complete
information and data points are essential for predictive modeling.
Detailed information about a building’s construction, coupled with
its usage, provide a predictive image of how the building will react
in the event of a catastrophe. And with better data comes more
informed decisions for insureds and markets.
For more information, contact:
Lori Flemming: 704.953.9780 or lflemming@american-appraisal.com
Rep Plasencia: 561.241-9767 or rep_plasencia@rpsins.com
DFMC 2014 – ENERGIZE  LEARN  PRAY  SHARE  RELAX  PREPARE  COLLABORATE
Sharing Stories From the Field
1) Arthur J. Gallagher (AJG) Production teams and Protected Self Insurance/Risk Placement Services
(PSI/RPS) Itasca assisted five Dioceses increase their Sexual Misconduct Liability (SML) limits this year.
Two Dioceses increased their SML limits with MunichRe and three other Dioceses expanded their SML
limits with a standalone SML London program.
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Convocation
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KEEP CALM AND CHARTER ON
Convocation 2014 • Napa CA
The operating principles for carrying out the mission of our
“Promise to Protect, Pledge to Heal” involves The Four C’s –
Competence, Consistency, Courage, and Compassion.
COMPETENCE
The following statistics support the level of competence in the
staffing, promulgation, and implementation of diocesan safe
environment and victim assistance programs. Since 2002, over
2.5 million individuals have been safe environment trained, over
5 million clergy, employees and volunteers have been background
checked, and since 2004 over $2.7 billion has been spent for child
protection, safe environment programs, and victim assistance.
The 2013 Annual Report – Finding and Recommendations:
Report on the Implementation of the Charter for the Protection of
Children and Young People (March 2014) shares a total spending
of $41,721,675 for child protection efforts alone (p 46).
Such efforts are the result of following a working model that
directs the United States Conference of Catholic Bishops to a)
act collaboratively and consistently, b) communicate, and c) offer
assistance to each bishop as needed. By employing highly skilled
and experienced individuals to staff safe environment and victim
assistance offices across the country, the bishops’ “Promise to
Protect, Pledge to Heal” is a reality.
COURAGE
The Nature and Scope and Causes and Context study carried out by
the John Jay College looked at the extent of the sexual abuse crisis in
the Catholic Church on a national level from 1950 – 2002 (Causes
and Context, p 7). I know of no other institution that has taken such
efforts at studying and making public the results of such introspection.
These studies are being used for current research. By taking the lead
and producing such instruments, the Catholic Church is taking a
leadership role and in essence becoming a change-agent in dealing with
this societal sin of child abuse/child sexual abuse.
But our work continues –
• There is a need to continually develop and implement the
Charter and our audit and the audit process.
• The NRB is carrying out a Safe Environment Efficacy Study and
the use of Root Cause Analysis with the goal of creating a culture
of reliability.
• There is an ongoing struggle with record keeping systems and the
reliability of databases.
• Likewise, background screening agencies need to use background
checks from all jurisdictions. There is a need to formalize
background procedures for international pastoral ministers.
• Continued work is needed in addressing boundary violations.
The Secretariat of Child and Youth Protection (SCYP) was
established by the Conference of Catholic Bishops as required
by Article 9 of the Charter. The SCYP provides staff support to
the Committee on the Protection of Children and Young People
(CPCYP) and the National Review Board (NRB). The SCYP is also
charged with assisting dioceses and eparchies with resources and the
office also produces the annual report that is mentioned above.
• Continued work is needed in addressing monitoring and
supervision of “Chartered” priests.
CONSISTENCY
We must also not forget that the majority of our clergy has carried,
and will carry, out their ordination in a manner that is healthy and
holy. We must continually support these men and pray for those
who have offended as well.
The 2013 Annual Report cites ten credible allegations involving
minors. Nine reports involving minors were diocesan (p 58) and one
report involving a minor was from a religious institute (p 62). Our
audit numbers consistently show a decline in reports of instances of
past abuse as well as far fewer allegations of abuse of current minors.
Consistency may also be seen in our documents and policies. The
2002 Charter traces its roots back to the 1992 Five Principles. The
1992 document carries the foundational message of 1) responding
promptly, 2) relieving the alleged offender, 3) complying with
obligations of civil law, 4) reaching out to the victims, and 5)
dealing with the situation as openly as possible.
The four sections of the Charter mirror the Five Principles. Dioceses
and eparchies are to 1) promote healing and reconciliation with
victims/survivors of sexual abuse, 2) guarantee an effective response
to allegations of sexual abuse of minors, 3) ensure the accountability
of our procedures, and 4) protect the faithful in the future.
COMPASSION
To be truly compassionate, we must work to heal broken
relationships and prioritize the needs of victims. The Charter for
the Protection of Children and Young People has helped to do this.
The next time you run into directors and coordinators of Safe
Environment Programs and Victim Assistance Programs, thank
them, offer your support, help, collaborate and think outside the
box. Work as a team and let’s be proactive.
Let us promote servant-leaders and recognize the work that is
being carried out by our bishops and their front-line staff. The
world is watching how we are dealing with this crisis. We have an
opportunity to lead by example.
Bernie Nojadera
Executive Director
Secretariat of Child and Youth Protection
United States Conference of Catholic Bishops
23 July 2014
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Convocation
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Viewpoint
September 2014
Article by: Erika Tyler Allen, J.D., Ph.D.
and Roger Duffield, CPCU, ARM
If you work in a school, church, or any other
organization that has students, your job just
got a lot more complicated. For the past
few years, we’ve seen increasing concern
for how organizations manage peer sexual
assault. For example:
•College women molested at parties,
•High school students made to feel
uncomfortable in class because of
leering or lewdness,
•Middle school students taunting others
sexually or about sexual orientation,
•Elementary kids pressuring others into
sex games.
As you can see, concern exists in university
settings all the way down to the youngest
elementary groups. This spring, the
government enacted important changes
to your responsibilities when it comes to
preventing and responding to reports of
this nature. Meeting these obligations
to manage peer sexual assault will create
a communications, record-keeping and
reporting nightmares for organizations that
do not manage them very carefully.
Why there is growing concern for peer sexual assault?
•Media coverage of suicides after non-sexual bullying,
especiallycyber-bullying.
•Universityactivismaboutadministration’snonchalance
towardspeersexualviolence.
•Mediacoverageofuniversityandschoolsystems’failure
torespondtosexualabuseofstudentminorsbyadults
(PennState,etc).
What exactly changed in the law?
April29,2014wasawatersheddayfornewrequirementson
howschoolsmustworktopreventandrespondtostudent
complaintsofpeersexualabuseandrespondtostudent
complaintsconcerningabuse.Threebigthingshappened
onthisdate:
1.First,theFirst Report of the White House Task Force to
Protect Students from Sexual Assaultwasreleased.The
TaskForcewasestablishedinJanuary2014.Thisfirstreport
addresseswomenincollege,thoughthepossibleapplication
toK–12educationisclearand,attheendofthereport,made
explicit.Amongotherpoints,theReport:
•Cites the now common (though not entirely lacking
in controversy) statistic that 1 in 5 college woman is a
victimofsexualharassment.
•Callsforclimatesurveysaswellaspreventionprograms
that engage men as “proactive bystanders” or “wingmen”
•Calls for higher and different standards for reporting
structures and responses. Most notable is the call
for each institution to name a confidential counselor/
identified expert with whom a victim can meet
confidentially,whoisnotamandatedreporterandwho
has no obligations to report internally to the school’s
TitleIXcoordinator.
•Callsforstrengtheningof“transparency”atinstitutionsso
studentswhoseneedsarenotmetattheinstitutionallevel
canfindalternativegovernmentresourcestostepin.
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Convocation
Beat
2. Second, the Department of Education, Office of
Civil Rights, issued a new guidance document called
Questions and Answers on Title IX and Sexual Violence.
Thiscountsasa“significantguidancedocument”andcontains
thesortofstandardsthatbest-practicesschoolswilladopt.
ItsupplementsOCR2001guidancethathasbeenheretofore
beentheprimarysourcetooutlineaschool’sobligationsin
respecttoastudentsexualharassmentbyemployeesor
peers.Amongotherpoints,theguidancedocument:
•AssertsthatallTitleIXobligationsapplytostudent-onstudentsexualharassment(nothingnew).
•AssertsthatallTitleIXobligationsapplytopreventing
andrespondingtosexualharassmentwhenvictimand
harasserarethesamesex(againnothingnew).
•Stronglyimpliesthatschoolsshouldidentifynameand
supportprofessionalswhoreceivesuchcomplaints,and
mightotherwisehavenoobligationtoreportexternally
or even to the Title IX coordinator , to make these
complaints known. This discussion, combined with the
stressofconfidentialcounselingintheWhiteHouseTask
ForceReport,representsasignificantchangeinemphasis.
3. Third, the US Center for Disease Control released its
Advance Findings on Preventing Sexual Violence on Campuses.
Thisreportviewssexualviolenceasacomplexpublichealth
issue.ItaddressesK–12institutionsaswellasuniversity
settings.Amongotherpoints,theFindings:
•Emphasize comprehensive efforts to prevent and
respondratherthanlimited“one-time”training.
•Listprogramsthathavedataforeffectiveness.
•Listprogramsthathavenodatabutseempromising.
How you must communicate differently with your
students and the adults who work with them?
1.Publicizenoticeofnondiscriminationaswellas
grievanceprocedurestoallstudents
2.Trainresponsibleadultsandotherwhommay
receiveareport
3.Trainstudentgroupsonprevention,
interventionandreporting
Most importantly, you now must record and respond
very differently to reports of peer sexual assault by:
1. Clearingseparatespecificindividualsforreporting
2.Separatingspecificrecord-keepingpractices
3.Coordinatingofresponse,whennecessary
4.Applyingofstatemandatedreporterlaws,
ClergyAct,FERPAandotherlaws.
Whiletheselegislativechangesareprimarily,butnot
exclusively,focusedoncollegesanduniversities,it
actuallyisamajorshiftinthoughtthatistryingto
balance victims need for healing with protecting
others from sexual abuse and assault. As more
specificdirectionisprovideditwillundoubtedlyhave
atrickledowneffectontrainingandorganizational
requirementsforreligiousinstitutions,thoseserving
youthandvulnerablepopulations.
Asyoucansee,preventingandrespondingwellto
complaints of peer sexual abuse prevention and
assault isn’t just important, it is administratively
complicated. If you need help, in2vate is ready
tosupportyou.WehaveteamedwithErikaTyler
Allen,JD,PhD,anationalexpertinlegalcompliance
initiatives, to provide a range of educational,
reporting,investigativeadrecord-keepingsources.
Reachin2vateatrduffield@in2vate.comor
Dr.Allenaterika@WordOfLaw.com.
Brought to you by in2vate, llc.
© Copyright 2014. All rights reserved.
12
Viewpoint
Convocation
Beat
September 2014
Risk Management and the Catholic Church: Are We Exposed?
The Diocesan Risk Mangers Forum (DRMF), as a Roman
Catholic risk management community, has been an active
networking group for more than seven years. The forum organizes
quarterly meetings/webinars to feature best practices and allow the
participating diocesan risk managers to share ideas, solutions and
ask questions of the group. Bi-annually, it gathers at a summer
Convocation in Napa, California.
Over the years there has been a focus on the detailed operations of
the risk management department along with other topics to better
equip risk managers to fulfill their responsibilities.
Earlier this year, the DRMF partnered with Integrated
Governance Solutions (IGS) to perform a risk management
processes study at the diocesan level to collect benchmark
information about key diocesan risk processes. IGS equips
organization leaders to govern more wisely by providing a
comprehensive framework for integrating the related disciplines
of governance, risk management and risk monitoring, delivered
through its cloud-based Solomon365® equipping platform.
:
t 6 sk
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me Ri
Ele ective ring &
Eff nito rting
Mo epo
R
Element 5:
Execution
Effective
Risk
Management
Strategies
Ele
m
Ac Clea ent
co r R 1:
un
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ilit
ies
Ownership
Element 2:
Appropriate
Risk
Capabilities
Understanding
Co
E
mp lem
en
r
As ehen t 4
ses siv :
sm e R
en isk
t
Round one of the study was launched in April. Risk Managers
and Finance Officers from twenty-six dioceses participated, and
responses were gathered within IGS’s diagnostic toolset.
3: ti
nt Iden
e
lem isk
E ve R
cti
a
Pro
The objectives of the study were to:
• Identify key strengths and challenges of today’s diocesan risk
management processes, based on a common perspective and risk
management framework. (see figure 1)
DRMF has plans to expand this initiative to perform a deeper
risk assessment, which will include both a quantitative scoring of
estimated impact and likelihood, along with qualitative comments.
• Build a risk process foundation leading to common diocesan risk
language.
Mike Witka, of the Diocese of Indianapolis, Indiana has been a risk
management leader within the DRMF. Contact Mike at mwitka@
archindy.org to participate in the study and receive a free report
showing how your diocese rates against the benchmark and be part
of this exciting initiative to enhance the role of risk management for
and within the Catholic Church.
• Set the stage for identification, codification and sharing of risk
management best practices to help dioceses manage risk more
effectively.
The results of the benchmark were presented at the June 2014
Convocation. Participants of the study rated themselves reasonably
strong when it comes to the identification of risks. Assessing the risks
identified and determining their level of impact and likelihood was
recognized as a significant improvement opportunity.
Mike Witka, Archdiocese of Indianapolis
mwitka@archindy.org
William Bojan, Integrated Governance Solutions
william.bojan@integratedgovernancesolutions.com
Peter Persuitti, Arthur J. Gallagher & Co.
peter_ persuitti@ajg.com
DFMC 2014 – ENERGIZE  LEARN  PRAY  SHARE  RELAX  PREPARE  COLLABORATE
Sharing Stories From the Field
One large Diocese increased the Casualty limits from $40 Million to $100 Million in limits
with assistance of an Arthur J Gallagher (AJG) Production team and PSI\RPS Itasca.
13
Convocation
Beat
Trends, Challenges and Insight in Property & Casualty (P&C) Underwriting
of Diocesan Accounts - summary of session at Convocation 2014
Protected Self Insurance/Risk Placement Services (RPS/PSI) were
honored to have six specialist Diocesan underwriters from Munich
Re, Brit, Church Mutual, Ironshore, Safety National, Allied World
(AWAC) and a London representative for standalone Sexual
Misconduct Liability (SML) provide a perspective on the Property
and Casualty market.
The overall theme is that the P&C market is stable.
However the industry is challenged, generally, by:
1.Low investment income relating to low interest rates
2.Medical Inflation
3.An increase in the number of slip and fall claims and property
losses from the difficult winter of 2014
There continues to be a limited number of carriers willing to
provide coverage to Dioceses due to the size and complexity of
exposures.
The carriers provided their Diocesan book loss ratios. Priest
Personal Auto continues to have a challenging loss trend.
Workers Compensation (WC) and Employment Practices Liability
Insurance (EPLI) continue to be the lines of Casualty coverage
seeing the biggest increases. Markets continue to push for increased
retentions on self-insured WC. Crime and Cyber coverage continue
to present a challenge because of lack of controls and loss problems.
There was a strong push for increased evidence of diligence
and planning when it comes to Disaster Recovery and Crisis
Management.
The lower layer Casualty carriers providing the first $15mil in
limits estimated 4-7% increases in 2014 and the upper layer
carriers sitting above $15mil were seeing mostly flat renewals.
SML rates continue to remain predominantly flat and there’s a
definite trend in purchasing increased limits. U.S. domiciled
underwriting companies, besides Munich Re and Church Mutual,
are still unwilling to provide SML coverage to Dioceses. There is
a continuing trend to see claims against lay employees, especially
coaches, and it was advocated that Dioceses need to be proactive in
adhering to their SML policies and procedures.
The Property market is varied dependent on geographic location.
Rates are generally flat or increasing if the insured is in a tornado
or hail storm-prone area where there has been significant claim
activity over recent years. Accounts in catastrophe-prone zones
(wind, hurricane and quake) have been seeing rate reductions.
There has been increased capacity in the market from the new
market entrants that have strengthened competition for good
accounts. While new carriers have entered the marketplace, there
remain few property carriers willing to deploy the full limits on
Diocesan risks. Again, this is due to the complexity of Diocesan
accounts, both from an exposure and valuation standpoint. Where
pricing makes sense and alternatives are needed, layered capacity in
the excess & surplus lines market can be explored.
For Additional Information Contact:
Shawn McCall
Senior Vice President
Risk Placement Services, Inc.
shawn_mccall@rpsins.com
Impressive Lineup for the P&C Markets’ Workshop, led by RPS Shawn McCall L to R Doug Trainor of Brit, Tim Jaggs of Integro, Jerry Bellin of Church
Mutual, Susan Costro of AIG, Michelle Intrepidi of Munich RE and Chris Roche or Safety (National).
14
Convocation
Beat
Viewpoint
September 2014
The Benefits of Accessing Payroll Data in a Decentralized Payroll Environment
With today’s technology, it is possible to access Diocesan-wide
payroll data in a decentralized payroll environment. The benefits
come from centralizing the data, not the payroll processing itself,
overcoming the need to implement a standard vendor or platform.
Instead of years to implement, in just a few months you can access
this valuable data from all of your locations.
• Identify ineligible employees who are enrolled in plans
• Receive payments electronically from locations (including assessments)
• Create consolidated filing reports for plan providers, workers
compensation reporting, etc.
This technology allows for Diocesan Finance, Human Resources,
and Insurance personnel to have access to this data, providing the
reporting tools needed to ensure compliance with the Affordable
Care Act, as well as other Diocesan benefit plans. This can all be
achieved without requiring parishes, schools, and other diocesan
locations to change their current payroll process.
Diocesan locations also benefit from this technology, as they do
not need to change their payroll process to provide the Diocese
with the ability to complete the required reporting. In addition,
some of their processes become more efficient with this technology
because they no longer will need to provide this data to the Diocese
using spreadsheets, ledger paper, email, etc. In addition, the same
reporting tools are available to them for any analysis that may be
requested by their pastors.
Technology that consolidates the payroll data into a data warehouse
alleviates the concerns related to changing to a centralized payroll
model. Tools such as this also allow for electronic invoicing and
remittance of benefit contributions, premiums, and fees in a realtime environment, versus a retroactive environment, resulting in
better cash flow for the Diocese.
Diocesan employees also benefit from technology, as consolidated
data provides the Diocese with more options for plan providers,
keeping administrative fees to a minimum while providing the best
plan options for the Diocese. Joe Braddock from the Diocese of
Jefferson City has saved over $50,000 per year in administrative
fees since implementing this technology.
With this actual payroll data, this technology can will give Diocese
tools to:
For more information on Who’s Where, visit them at Booth 121,
call 888-561-2072, or visit www.whoswhere.org.
• Identify employees who work 30 hours or more per week
(consolidating hours for employees who work in multiple locations)
By John Foucault, President and CEO, Who’s Where
• Identify employees who are eligible for various benefit plans based
on individual Diocesan plan rules (e.g., retirement, health, etc.)
Quotation from SURVEYS post Convocation 2014 Napa
“I liked the forum. I thought the collaboration amongst the attendees was fabulous”
LOOK FOR UPDATED WHITE PAPER
In 2008 we released a white paper on “Medicare as a Secondary
Payer & Diocesan Priests”. Phil Bushnell, Managing Director
of our Benefits Religious Practice, has informed us of a update
to this, in partnership with Mark Chopko of Stradley, Ronon,
Stevens & Young, LLP, is becoming available @ DFMC 2014.
It will also be available at The Gallagher Post
(www.gallagherpost.com)
NATIONAL STUDY ON RISK MANAGEMENT
AND THE CATHOLIC CHURCH
The Diocesan Risk Managers’ FORUM (DRMF) has taken on a
new national project in partnership with Integrated Governance
Solutions (IGS) of Minneapolis, MN. Co-created by Mike Witka,
Risk Manager for the Archdiocese of Indianapolis and Peter Persuitti
and the Gallagher Team, the DRMF has been networking quarterly
since 2007 to advance the work and profession of the diocesan
risk manager. Recently, The National Catholic Risk Retention
Group, Bishops’ Plan Insurance Company and Catholic Mutual
Group, along with the National Leadership Roundtable for Church
Management, met to discuss elevating this effort through an
interdisciplinary collaboration. Stay Tuned for more!
15
Convocation
Beat
Defined Contribution and Total Rewards – Trends in Diocesan Approaches
to Employee benefits
Since the term was coined, “Total Rewards” has been constantly
evolving as a concept. Traditional definitions have focused on
the linkages between an organization’s compensation, benefit and
retirement programs and the diocese’s overall strategic plan. One
example of this evolution was the move in retirement plans from
defined benefit (pension) plans to defined contribution plans (401k,
403b, etc.), as pension funding concerns and ongoing financial liability
questions were raised by large employers. Healthcare reform is now
acting as a catalyst for dioceses to consider the merits of a similar move
to a defined contribution framework for health and welfare benefits.
candidate for this Total Rewards approach. We have the resources and the
tools to help dioceses see their employee benefits picture as a whole, with
all components working towards your ultimate mission and strengthening
your culture. Gallagher is able to offer this Total Rewards philosophy
with the help of all of our internal resources and practices, including
Health and Welfare consulting, Multinational Benefits and HR,
Voluntary Benefits, Executive Benefits, Retirement consulting, Healthcare
Analytics, Employee Communications, and Wellness.
For more information contact your Arthur J. Gallagher & Co. representative
or Phil Bushnell at phil_bushnell@ajg.com
Total Rewards includes any tool a diocese can use to help recruit,
retain and engage their employees. Gallagher specialized in helping
organizations strategically align the largest total rewards cost
buckets: compensation, benefits and retirement – often referred to
as “core rewards”. Currently, healthcare reform is causing employers
to take a step back and look at their core rewards programs in a
more holistic fashion rather than continuing with the traditional
silo approach. This provides organizations with the opportunity to
approach their reward programs more strategically and proactively
with an eye toward effectiveness and sustainability
To help employers address these issues, Gallagher built Workforce
Evaluation, a methodology for identifying patterns within your workforce
and key talent populations to achieve maximum cost savings and
employee engagement. Gallagher believes that dioceses are the perfect
Merits of Costs Allocation Methodologies
Allocation methodologies require a blend of science and art in four
key aspects:
• Cost of Risk Allocation Target
»» Know your Costs of Risk: 1) Premium, 2) Broker/Consultant,
3) Retention, 4) Administrative
»» Decide to Underfund or Overfund
• Cost of Risk Segmentation
»» Know all your Types of Risk (i.e. Lines of Coverage)
»» Decide to combine or segment (i.e. Fire separate from
Catastrophe; GL separate from Abuse)
• Classification and Rates
»» Complex bottom-up approach based on occupancy (i.e.
Church, school, social services, etc.) possibly combined with
nuances such as claims surcharges, compliance discounts, etc.
»» Simple top-down (i.e. Target divided by insurable values or
square footage)
• Transition and Timing for a New Methodology
»» Leadership consensus, methodology selection, data clean-up,
new workflow
»» Phase-in cost transition for existing exposures; Immediate cost
impact for new exposures
Case Studies illustrate that a top-down methodology, such as target
divided by insurable value, will not be reflective of costs of risks
related to various Diocesan operations. For example:
• Charities will be significantly undercharged, i.e. 25% to 169%,
using a simple top-down methodology
• Cemetery charges can vary from +50% to -50% depending on
methodology, acreage and mausoleums
• Schools could be charged 50% more by allocating some costs
based on number of employees
Link: http://www.ajgrms.com/convocation, click on “Keynote Speakers
and Workshops” then select Session 5.5.
For additional information contact Zack Phillips at zack_phillips@ajg.com
16
Convocation
Beat
Viewpoint
September 2014
The Florida Dioceses - Collaboration is the Heart & Soul
Convocation Presentation – June 2014
same direction towards claim resolution. This all but eliminates
surprises, unless there is an unexpected and significant change
in the claim.
Over the past 5 years, the Ecclesiastical Province of Miami,
through collaboration with their Loss Control team, Claims
team and Brokerage team has recognized a significant reduction
in their shared loss fund.
Loss Control and TPA attend client safety meetings and
financial meetings to discuss claims prevention, relevant case
law or administrative changes that affect the client’s losses or
procedures.
By working together to prevent new claims, manage existing
claims inventories and using new, cutting edge data driven
analysis, the EPM is innovating like no other.
As a result of the shared efforts, the EPM has reduced their loss
fund by 30%.
Conduct training with entities, groups of employees, or those
involved in the claims process to ensure that all procedures are
followed to reduce risk.
Collaboration, through ongoing and timely communication,
shared vision, and strong partnership has driven remarkable
financial results and allowed the EPM use the savings for the
mission of the Church.
Regular claim reports are sent to all interested parties to allow
each entity (Client, Broker, Loss, Claims Advocacy, TPA) to
review and share observations to assist each other with planning
and proactive risk management.
How do they do it?
Initial reports of accidents sent to all parties to take action for
their specific expertise.
• Continued communication between the Diocese, Loss
Control, Claims Operations, Claims Advocacy, and
Brokerage Teams
Continued on page 17
• Data-gathering and reporting to ensure that
challenges are identified and addressed
Diocese
• Processes to communicate issues, claims, or
opportunities as they arise
• Cross-programming to ensure that all stakeholders
understand the road to success and driving with
purpose and clarity
Communication:
Quarterly claim review meetings with:
• CFO
• Risk Manager/Coordinator
Broker
Loss
Prevention
• Interested members of Diocese staff (HR, Finance)
• Broker
• Claims Advocate
• Loss Prevention/Risk Control
• TPA Claims Operations/Account Management
Rather than discussing a few high dollar claims,
we have a list of the open claims, with their paid,
reserves, total experience and number of days open.
The claims operation team gives an update on the
claim, along with any reserve or settlement recommendations,
and the estimated closure date.
By touching all open claims, and establishing an action plan
agreed to by all parties, we confirm that we are all moving in the
Account
Management
Claims
Convocation
Beat
17
Continued from page 16
Technology:
Client pyramids were expanded to allow
the EPM members to see where their risk
is by ministry and division.
Specialized reports were created using
payroll, property valuations, and other
relevant metrics to see how the client is
performing year over year.
New stewardship reports will be rolled
out to demonstrate successes and
opportunities.
Field ID developed to audit locations and
find potential risk before accidents happen.
Stratified by severity so that the entity can
prioritize necessary repairs or changes.
Training provided to review claim
information at the client convenience.
Procedures:
Client is establishing best practices to
share with each other and holding entities
accountable for following same.
Best Practices are based upon supporting
claims data, as well as experience on the
part of the client and the interested parties.
Loss Prevention dispatched to accident
scenes to photograph and make
suggestions for claim mitigation
Through close communication and
collaboration, the Ecclesiastical Province
of Miami, with their partners at AJG
and Gallagher Bassett have improved
claims processes, and thr results speak for
themselves!
For more information contact:
Maria_Vargo@ajg.com
Workshop Presenters:
Tony Abella Sr., CPCU, ARM,
Area Senior Vice President,
Arthur J. Gallagher
Tracy Dann, Risk Manager,
Diocese of Orlando
Kristy D. Sands, CWC, CWCL,
Account Principal,
Gallagher Bassett Services
Church Facilities Use – Exempt from Regulation
or Open to the Public?
The variety of property used by Church institutions is bewildering, and it is often
taken for granted that the use is properly restricted and protected by law. These old
assumptions are now just beginning to be challenged in ways that mirror the personnel
situation. As protected categories under civil law rise and the power of state regulators
increases, how can Catholic dioceses plan now for an uncertain future? Although one
thinks of traditional church property – houses of worship, schools, convents – religious
institutions over time acquire many kinds of property, including halls, office buildings
and parking facilities. All may be subject to increasing scrutiny.
Without free use of Church-related facilities, Catholic institutions would be unable to
carry on their mission. That said, many Church-related facilities have also been rented
or made available to non-Church groups for a long time. Sometimes the use of a church
hall is to be a good member of the community, such as when rooms are available to
scouting groups or social service providers, such as “AA.” Other times, the rental of a
church hall brings in vital funds for cash-strapped parishes, such as from weddings or
bar mitzvahs. Isn’t being a good neighbor part of mission?
A growing issue around the country is the demand by regulators and litigants that
Church property, once open to uses beyond the parish, must be made available to all on
a non-discriminatory basis as “public accommodations.” But just as the array and use of
Church facilities vary widely, so do State “public accommodation” laws and the scope of
a “religious exemption,” if any.
A key consideration is whether the facility is marketed to the general public or
restricted to “Church members.” While that is one way, in theory, to draw a
responsible line, the legal requirements often turn on questions of fact – are goods
or services made available to the public? In some situations the absence of a “fee” is
not relevant. Some state laws list categories of “accommodations.” The list includes
obvious categories such as taverns and hotels, but also includes “any place where
food is sold for consumption on the premises.” Would this include a school cafeteria
that sells lunch to parents and visitors? If a category includes “any beverage retailed
for consumption,” what about the parish hall where the Knights sell soda and beer
for a fund-raiser? The public accommodation laws are civil rights statutes which are
broadly construed and to which any exemption is narrow.
The point is not to trigger panic, but to raise the profile of advance planning before
there are situations where incompatible or hostile users and uses occur. The session at
Convocation used real examples of challenges to Church property use. [Add link to
Seminar slides.] These examples illustrate the need to assess how property is used and
why, articulate the connection between the property and the mission, and set down
guidelines in policy. The hard part will be for administrators to act consistently with
the policy.
This is a “horizon issue,” to be sure, but the time to act is now. In a rapidly-changing
social environment, there will be more pressure to conform and less willingness to
“accommodate” social norms for religious uses.
Mark Chopko, Stradley Ronon Stevens & Young, LLP, Washington, DC
mchopko@stradley.com
18
Convocation
Beat
Viewpoint
September 2014
Convocation 2014 Presentations Available Online
(but we do not have a précis prepared):
You can download
these presentations
at www.Ajgrms.com/
convocation
and/or make contact
with the key presenter
listed for each.
19
Convocation
Beat
Religious Employers and PPACA
The Patient Protection and Affordable Care Act (“PPACA”)
inundated employers with new mandates and requirements,
resulting in additional complexities for religious employers offering
coverage to employees and challenges arising from potential
conflicts between legal requirements and Church beliefs. Certain
issues unique to religious employers under PPACA can create
pitfalls for those employers. Below are five key pitfalls to avoid.
Shared Responsibility penalties until the beginning of their plan
years in 2015 if certain conditions are met. Employers eligible for
transitional relief will be required to certify their eligibility for that
relief on their IRS reporting. Otherwise, employers must be ready
to comply with the Employer Shared Responsibility mandate as
of January 1, 2015. If your organization has not yet determined
when then employer mandate will apply to your organization, steps
should be taken soon to allow time for any actions to be taken to
limit potential liability.
Pitfall #1
Pitfall #4
Not understanding the potential impact of losing grandfathered
status. Non-grandfathered health plans must provide coverage for
Phase I, II, III, and IV clinical trials for plan years beginning on or
after January 1, 2014. Only FDA-approved trials must be covered,
but some of those trials may conflict with religious and religiousaffiliated employers’ religious beliefs, such as clinical trials approved
for embryonic stem cell research. Careful consideration should be
taken to plan language if such clinical trials are to be excluded from
plan coverage.
Failing to prepare for IRS Reporting for 2015. While some
employers may enjoy transitional relief from the Employer
Shared Responsibility mandate until 2016 (or into 2015 for large
employers with plans that have non-calendar year plan years), IRS
reporting for applicable large employers has not been delayed.
Thus, all large employers and self-insured small employers should
be prepared to track employees’ hours of service beginning
January 1, 2015. If your organization has not yet taken steps to
track employee hours beginning January 1, 2015, steps should be
taken as soon as possible.
Pitfall #2
Misclassification of workers. Workers for religious and nonprofit
employers are sometimes incorrectly classified as independent
contractors when they are actually common law employees. Failure
to correctly classify workers as common law employees can have
a negative impact not only under PPACA’s Employer Shared
Responsibility provisions, but also Department of Labor regulations.
To avoid such issues, a careful review with legal counsel should be
made of any workers designated as “independent contractors.”
Pitfall #3
Overlooking potential transitional relief from the Employer Shared
Responsibility mandate. Employers that employ between 50
and 99 full-time and full-time equivalent employees (“mid-sized
employers”) may avoid Employer Shared Responsibility penalties
until the first day of their plan years starting in 2016 if they meet
certain conditions. Employers with 100 or more full-time and
full-time equivalent employees (and those mid-sized employers
who do not qualify for mid-sized employer transitional relief )
with non-calendar year plan years may also avoid Employer
Pitfall #5
Not considering Employer Shared Responsibility penalties on an
entity by entity basis. Employer Shared Responsibility penalties, if
any, will be assessed on each individual entity within a controlled
group, and each entity within the controlled group must individually
meet the requirement to offer coverage to 70% of its own employees
in 2015 (95% starting in 2016) in order to have “offered coverage”
for purposes of avoiding the 4980H(a) penalty ($2,000 multiplied
by the number of full-time employees). Until further guidance is
issued, churches must use a reasonable good faith effort interpreting
Section 414(b), (c), (m), (n), or (o) of the Internal Revenue Code
to determine whether they are part of a “controlled group” under
PPACA. If your diocese has not performed an analysis as to whether
the various parishes and schools are part of a controlled group, then
that analysis should be conducted soon.
This information was provided by Petula Workman, J.D., CEBS
Division Vice President, Compliance Counsel,
Arthur J. Gallagher & Co.
petula_workman@ajg.com
Quotation from SURVEYS post Convocation 2014 Napa
“The topics were very good. I also sensed that attendees were more engaged this time. There was different
attitude. It wasn’t that they wanted to hear what they had to do because someone (the government or
insurance company) was making them do it. It was more like many wanted to do the right thing and the
most correct way!”
20
Viewpoint
September 2014
What is the Reta Trust?
A 501(c)(9) nonprofit health plan, the Reta Trust (Reta) functions
as an ERISA trust for Catholic employers listed in the Official
Catholic Directory. Established in 1976, Reta is now one of the
country’s leading health benefits organizations serving Catholic
archdiocese, dioceses and affiliated entities. Reta’s growing
membership spans the U.S. and includes more than 22,000 priests,
religious, employees and dependents of over 60 Catholic employers
(“Trustors”). Because it is self-governed by a Board of Trustees
elected by its Trustor members, Reta always acts in the best interest
of its members.
Reta’s mission is to provide access to an affordable, quality
healthcare program for employees and members of Catholic
entities, which respects the social and moral teachings of the
Roman Catholic Church and supports Catholic healthcare
institutions.
What are the Reta Advantages for Catholic Employers?
Commitment to Catholic Values and Adherence to Catholic
Directives ~ Reta has deep expertise in serving Catholic
organizations. Reta exclusively contracts with health plan carriers
who are committed to delivering benefits in alignment with
Catholic Ethical Religious Directives (ERDs) as determined by a
team of advisors to Reta including morale theologians, physicians,
medical ethicists and health care/employee benefit attorneys. This
advisory team reviews hundreds of ICD-9 (and ICD-10 in 2015)
treatment codes for medical care that conflicts with the ERDs,
such as contraception, sterilization, infertility and abortion, and
determines based on diagnoses codes which procedures are ethically
appropriate to cover and which are not. Reta’s claim administrators
are continually updated with changes to their payment codes by
our advisors, and they are audited annually to confirm they are
complying in practice.
Competitive Market Pricing ~ As a self-funded plan, Reta is
able to keep administrative costs low while leveraging its size to
obtain competitive rates from high quality carriers and discounts
from top-performing vendors. Through sound and innovative
approaches to cost management, Reta’s health cost trend has been
well below the U.S. average. Pricing advantages that Reta enjoys
based on the volume of enrollment among its more than 60
employer groups includes low per capita fees covering:
• enrollment, eligibility and COBRA processing, diocese location
billing and collection, and data processing for PPACA reporting
including W2s and IRC Section 6055 and 6056;
• claim administrative services for all plans offered: PPO, EPO,
HSA-qualified high deductible health plans, pharmacy, dental
and vision;
• large claim stop-loss reinsurance premiums;
• wellness, biometric screening, health management, data analytics,
market-based pricing, legal compliance, audit services and
Trustor customer service.
Financial Affordability, Stability and Security ~ While the Trust
is self-insured, it establishes premium-equivalent funding rates
individually for each Trustor. Reta’s rates are:
• Set Based on Group Size: Reta uses an actuarial model and
underwriting guidelines that are consistent with industry best
practices. The end result is rates that are fair and equitable for all
and that distinguish between large, mid-sized and small groups.
• Predictable: Reta delivers it’s annual renewal of Trustor funding
rates five months in advance of the July 1st Trust anniversary,
including a pre-renewal estimate eight months prior to renewal.
Two years of rolling claims experience is used to project renewal
cost levels which lessens the impact of isolated large claims in
projecting future claim levels.
• Stable: Reta’s historical low trend adjustments reflecting the
Trust’s efforts with Trustors and employees to manage utilization
through innovative wellness programs, access the strongest
network discounts and promote low cost alternative care options,
keeps rate increases (if needed) to a minimum, providing
protection from excessive rate fluctuation.
Sound financial management ~ When Trust reserves surpass
required funding levels, Reta returns the surplus to Trustors, while
maintaining sufficient funds in place to protect Trustors from
undue risk. Since 2006, Reta has returned more than $60 million
in excess reserves as premium credits and plans to do so in the
future.
Comprehensive benefits that promote health, wellbeing and
productivity ~ Reta’s benefit plans support the member’s role in
achieving good health, and provide tools and resources to help
members stay healthy. Reta offers:
• A choice of competitively-priced medical plans from nationallyknown carriers: Blue Cross, Blue Shield, United Healthcare,
Kaiser and Aetna offer PPO, EPO and HSA-qualified High
Deductible Health Plans.
• Prescription drug coverage: including retail, mail order and online
services – from OptumRx. Reta’s unique market-based pricing
featuring the “Reta Value Options” website and mobile app
showing employees the actual cost of therapeutically-equivalent
alternative medications, to help employees choose between similar
generic and brand drugs with wide variations in price.
Continued on page 21
21
Continued from page 20
• Core and Enhanced Wellness Programs ~ Partnering with
WebMD and Safeway Health, the Trust developed “core” and
optional “enhanced” (biometric) wellness programs combining
risk assessment data and biometric testing to assist health coaches
in coordinating health improvement strategies to reduce health
risk among engaged members. The programs incorporate
effective financial incentives to encourage participation and
efforts to reach target health goals, by motivating positive health
and lifestyle habits.
• Wellness Grants ~ Each year Trustors may apply for Reta funded
wellness grants up to 1% of annual medical and pharmacy
premiums, to fund local wellness campaigns further promoting a
culture of health among Trust membership. Trustors have used
Reta grants to pay expenses associated with health fairs, flu shots,
stress management, nutrition and diabetes management classes,
weight loss programs, fitness challenges, walking programs,
fitbits, health club membership, dance classes and training for
teams of wellness coordinators at schools, churches, charities and
other diocesan locations.
• Optional benefits ~ Dental coverage from Delta Dental and
Vision coverage from VSP round out the Reta health programs
Trustors may offer their lay and religious employees.
Simplified and streamlined open enrollment and benefits
administration ~ The Reta Benefit Center (tour the RBC at www.
aboutretatrust.com) provides convenient and secure 24/7/365
access for employee and dependents to health plan information
from all of Reta’s benefit partners. The RBC creates a personalized
online user experience, tailored to each Trustor’s benefits and to
user needs, available on any device - desktop, laptop, tablet or
smart phone.
Cost-effective, reliable, compliant and hassle-free benefit
administration ~ Reta provides a full range of administrative
services: Enrollment and eligibility, consolidated management and
location billing, customer service line and user groups, COBRA/
HIPAA administration, Payroll, W-2 reporting, and PPACA
reporting in 2015-’16 (IRC Section 6055 and 6056)
Management services delivered by industry experts ~ Reta’s
health plan management services include:
• Monitoring compliance with Catholic Ethical and Religious
Directives
• Underwriting, pricing and actuarial consulting
• Account management / customer service
• Vendor selection / contracting and management oversight
• Employee communications, required notices and legal counsel
• Financial management: audit and investment services
• Monitoring and analysis of Affordable Care Act implementation
For more information about Reta visit: http://www.AboutRetaTrust.
com or contact Bob Burnett at robert_burnett@ajg.com
22Full Page?
Viewpoint
September 2014
Church Executive magazine has posted online at www.churchexecutive.com an Ebook on
Social Media Risk Management & The Church. Gallagher’s Cyber Team, led by Steven
Robinson of RPS, contributed two articles, and Gallagher’s Religious Practice leader,
Peter Persuitti, led a panel at the annual NACBA Conference
(National Association of Church Business Administration).
23
White Paper released by our Retirement Plan
Consulting
Mike Levin, AIF, who leads our Diocesan-focused efforts in the
Retirement specialization of our Religious Practice, is making
available a brief, 5 page report entitled “ Critical Thinking: The
Silver Tsunami- Helping Employees Prepare for Retirement”.
Quotations from SURVEYS post
Convocation 2014 Napa
“There was a lot of good information packed
into a very short time period. It was a good use
of time, good introduction to various topics, a
great chance to connect, and time well spent”
“You hit a home run. Beautiful, tranquil, great
customer service.”
On Patrick Lencioni’s opening talk “best
speaker of Convocation. Very timely and
relevant. Could he be encouraged to make a
presentation to the Bishops at their USCCB
conference?”
“Thank you for continuing to support the
Church through the Convocation.”
“It was very clear via the discussions in each
workshop that Gallagher is a thought leader for
the Diocesan community”
“I thought this was very well done, and was an
excellent networking opportunity. Really a great
event and a worthwhile mission of promoting
collaboration!”
Clergy Benefits
It is the responsibility of the bishop to provide for diocesan priests
in infirmity, sickness and old age. There are a number of factors at
play that are making this responsibility difficult to manage both
administratively and financially.
• There are 28,000 total diocesan priests in the U.S. with threequarters of these priests still active.
• 50% of the diocesan priest population that is still in active
ministry expects to retire within the next 10 years.
• On average, dioceses now have one retired priest for every two
active priests.
• Half of all priests currently in active ministry are over the age of 60.
• In recent years there has been a significant rise in healthcare costs.
• Significantly increasing costs in assisted living and nursing home
care have placed a burden on diocesan funds.
Against this backdrop of rising costs and aging population,
Gallagher Benefit Services can assist your diocese in taking the
necessary steps to provide the retirement and healthcare needs your
priests deserve, and do so cost effectively. We can work with you to
provide the medical, disability, long term care, retirement and other
financial needs of your priests throughout the diocese.
Let us help you develop and implement a plan that will decrease
expenses and increase revenue.
Phil Bushnell
Religious Practice Leader
Gallagher Benefit Services
“Healthy organizations minimize politics and confusion, raising morale and productivity to levels
that their competitors could never imagine…they tap into all the intelligence they have and almost
always find ways to get smarter. I can't imagine a bigger competitive advantage than that.”
The Advantage, Patrick Lencioni,
The Table Group, 2012
Convocation 2014 Keynote Speaker
24
Viewpoint
September 2014
Resources Online @ The Post
Among the multitude of resources and online training modules you can find, once you log in to the Post, there are specific MP3s, as we call
them, Exponential Ministry Protection memos and posters for use by parishes and schools. Here is what we have so far:
• Boiler and Hot Water Heater Inspections
• Cleaning Up After a Clean-Water Flood
• Copper and Aluminum Theft on the Rise – How to Protect Your Parish
• Cyber Liability – Should we consider this coverage?
• Enjoying Summertime All Year Long – Waterpark Safety
• Establishing and Maintaining Safe Alternative Parking Sites
• Facility Daily Checklist
• Financial Safeguards
• Fine Arts – Realizing Hidden Assets
• Gone “Phishing” – Cyber Risk Management
• Homeless Shelters: Basic Guidelines When Opening Your Parish
• Inflatable Bounce Houses, Moon Walks, Jumpers Are All The Rage for
Children – But Are They Safe?
• Office Safety: What are the risks?
• Proper Lifting & Ergonomics
• Protecting Ministries – A successful safety culture
• Protecting Ministries – Safe Behavior
• Return-to-Work Programs
• Risk Management and youth Groups
• Safe Playgrounds
• Safe use of Space Heaters
• Safely Undoing the Holidays
• Securing Your Facilities
• Security Guidelines for Religious Education Activities
• Self-Inspection of fire Protection Equipment
• Service-Related Injuries
• Spring Rain and Snow Melt
• Third-Party Risk Management
• Tips on Preventing Lightning Strikes
• Trampoline Risks Outweigh Fun
• Warm Climate Activities, Insects and Food Safety
We encourage you to distribute these electronic resources, print out a post for the kitchen or in the office and also let us know what topics
you would like to have us research further.
Our vision as a Practice for creating these resources is three-fold:
• Ultimately good risk management and loss control is ministry protection, and we want to help you achieve exponential effectiveness in
this pursuit.
• We believe an auditory version (MP3) will help diversify the delivery, save a few trees and hopefully see such information in my
hands— and ears! We are beginning to work on this short vignette recordings that will be accessible online as well.
• Three is an important number for us as a faith-filled people of God, this is ministry!
25
Has your Dicoese put in place an online TULIP program?
(Tenent User Liability Program)
Gallagher can help with EventUs!
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26
September 2014
The POST www.GallagherPost.com
Do you have a login? How about your team?
Home Page
of the Post
To access all
the resources.
27
Convocation 2014 Memorialized on Gallagher Website
www.ajgrms.com/convocation
Jack Carter and Mike Tooley of the Diocese of Ogdensburg, Dave Hessel of the Archdiocese of Galveston-Houston and Don Turlek of the Archdiocese of Chicago. Bishop Thomas
John Paprocki of the Diocese of Springfield in Illinois and Tom Schadle of the Diocese of Tulsa. Jill Braniff of the Diocese of Shreveport and Joseph Mulligan of Grant Thornton LLP
(Nonprofit Practice). Pat Kelly of the Diocese of Youngstown, Michael Vaughan-Fowler of PSI London and Carolyn Reynolds of Arthur J. Gallagher & Co., San Francisco Office. Tracy
Dann of the Diocese of Orlando, Peter McPartland and Dr. Volodymyr Smeryk of the Diocese of Venice. Mary Santi of the Archdiocese of Atlanta.
28
Full Page Ad - ?
Viewpoint
September 2014
CPA
The CPA network is alive and well, working together
to help advance the temporal work of the Church in America.
Thanks especially to Deacon Bill Koniers, CEO of CathoNet, for his leadership!
29
Napa Think Tank — A Collaborative
Roundtable Since 2012
Three partners – Busch & Caspino of Irvine, California, Patterson
Buchanan Fobes & Leitch, Inc. P.S. and Arthur J. Gallagher &
Co. – have come together each of the past three summers (late July)
to host and fund a gathering of experts at the Meritage Resort &
Spa (Home of the Napa Institute, established by Tim Busch, JD).
A White Paper has been produced for each of the three years of
its existence. Bishop Thomas Morlino of the Diocese of Madison
Wisconsin has been instrumental in providing great spiritual
insight and we certainly will not forget his opening talk at the
inaugural 2012 session on “Risking It All for Christ”. We have been
fortunate to engage experts from the Dioceses, the Becket Fund,
Ave Maria University, Magis Institute, Liberty Institute, in2vate,
University of Notre Dame faculty, Stanford Law School, Integrated
Governance Solutions, Columbia University faculty, Catholic
University faculty, Baylor University faculty, California Catholic
Conference and the Ethics & Public Policy Center.
Vision
Napa Think Tank
www.temporaladministration.org
WHITE PAPER ON
“RELIGIOUS FREEDOM”
Gallagher’s Religious Practice, in partnership with several law
firms and the Napa Institute, released a comprehensive report
on Religious Freedom, July 2013, as a result of the Napa Think
Tank. Noted constitutional expert Phil Hamburger was among
the thought leaders on hand. Go to www.temporaladministration.
org to download a copy of that as well as “Risking It All For
Christ”, the 2012 Report on risk management and the Church.
DFMC 2014 – ENERGIZE  LEARN  PRAY  SHARE  RELAX  PREPARE  COLLABORATE
Sharing Stories From the Field
PSI/RPS continues to see a trend with Diocese in increasing their Errors & Omissions (E & O), Director and
Officer (D& O) and Employee Practices Liability Insurance (EPLI) limits all the way up their Casualty tower
for a nominal additional premium.
30
Convocation
Beat
Viewpoint
September 2014
What Every Chancery Needs to Know
Or Six Secrets Why Some Chanceries Work Better than Others
While every chancery is unique, some clearly do function better
than others. This article identifies six key differentiators between
the very highest functioning chanceries and those that are simply
well functioning. These are factors I have observed over 20 years of
working in chanceries and visiting them all over the United States.
They are the key differentiators that seem to make a difference
between just being good and being great.
1. Clear and Explicit Purpose
What I see in the very highest functioning chanceries is clarity about
why the chancery exists. Essentially there are four key purposes
consistently articulated in these highest functioning chanceries.
1. To create capacity for the bishop to fulfill his governance role
and to be in right relationship with the presbyterate
2. To build the capacity of parish to fulfill the mission of the
Church universal
3. To provide leadership in the diocese
4. To carry out those mandatory administrative tasks that every
chancery must do such as statistical record keeping, judicial,
civil law functions and maintain archives and so on
What happens in the most highly functioning chanceries is that
everyone, from the bishop down to the janitors can name these four
purposes as the reasons for the chancery existing. These chanceries
are aligned around those purposes structurally, in how they allocate
resources (people, money and facilities), and their culture.
2. The Right People at the Top
The highest functioning chanceries have people at cabinet level
who share some common characteristics. Firstly, there is a clear
link between the level of authority, the level of competence, and the
capacity to authentically influence others. While it is frequently
assumed that the Catholic Church operates as a hierarchy where
everybody just does as the boss tells them to do, if you ask any
bishop “When was the last time you told the pastors and those
who work in parishes what to do and they all just did it?” you get
a smile or a laugh. In reality this seemingly differential hierarchy
operates at a functional level far more by influence than by edict.
Secondly, these effective chancery leaders are great project
managers: they know how to execute a plan, how to get things
done. They are very action and solution oriented as opposed to
simply planning to act or talk about problems without actually
doing anything about them.
Thirdly, in the really highly functioning chanceries the key leaders have a
basic functional financial literacy: they can make sense of a balance sheet,
a Profit and loss statement as well as just read a budget document.
Fourthly, these chancery leaders tend to have at least four or more
of the following characteristics:
1. Prefer to be a capacity builder rather than an expert
2. An adaptable leader who reads constantly changing
circumstances very well
3. Create authentic intentional relationships
4. Competent executive coach and mentor
5. Collaborator/Facilitator whom others trust not to waste their time
6. A Connector who can create and effectively manage small, very
focused task groups with multiple skillsets and differences of opinion
7. Networker who can bring people with common interest
together and align them for the common good
8. Spiritually mature enough that short and mid term problems do not
threaten their faith in the resurrection of Jesus Christ or His Church
9. Emotionally mature enough that they have little interest in
who gets credit for success
10. 10. Content expert in whatever field they operate
What is of note is that both good an great chanceries have content
experts such as faith formation directors or school superintendents,
moderators of the curia or vicars general who are very well qualified
in term of academic preparation (doctorates, masters level degrees).
However, that does not seem sufficient to bring he operation of the
chancery from good to great. A high functioning chancery needs
leaders with that level of content expertise, but also needs so much
more than that.
3. Customer Service Orientation
The highest functioning chanceries have a customer service
orientation. This shows itself in multiple ways and can be measured
using surveys and/or focus groups of customers. For example, in
many of the best functioning chanceries a pastor can make one
call to access all chancery services. He and his staff who call the
chancery experience every chancery staff person who answers the
phone as a “case manager” who aligns the resources of the chancery
to help them.
This recognizes that most significant issues that come to the
chancery have multiple facets that need multiple disciplines for
solution. Chancery staffs act in a “case management” role to
create solutions to complex problems, assembling whomever and
whatever it takes to best serve the issues.
Continued on page 30
31
Convocation
Beat
Continued from page 29
In the highest functioning chanceries the pastor is always regarded
the primary customer regardless of who actually contacts the
chancery. It is interesting that this applies even when the issue is
school-related. The highest functioning chanceries recognize that the
economies of parishes and schools are entwined so that dealing with
one without dealing with the other does not make lasting solutions.
There are some common examples of customer orientation across
the highest functioning chanceries. The most common example
of this is the rigorous management of data collection. The best
customer oriented chanceries rigorously manage surveys and data
returns across departments to minimize what is asked, only collect
what is actually used, and returns the data in the form of useful
information in a timely manner to those from whom the data
was collected. Pastors often report that this behavior means that
they believe the chancery delivers value for the dollar. Another
example is the cabinet level of the chancery having a means of
regularly scanning what is happening in the diocese, both within
parishes and in the wider community. The cabinet level meeting
agendas include at least once a quarter where time is set aside to
name what have changed in the internal and external operating
environment of the diocese. A further example is that when
complex issues arise for parishes or schools the chancery rapidly
forms task groups made up of the people of specific competencies
to respond quickly to emerging need. Lastly, a common example
of customer orientation is that chancery staff accurately reflects
the mind of their bishop when they talk to parishes or the wider
community so that there is no confusion about Catholic identity
or Catholic teaching.
4. Integrated Structure and Management by Standards
In terms of organizational structure the highest functioning
chanceries consistently share four common characteristics:
1. Financial, personnel, donor and parish databases are relatively
integrated
2. Ministry services are relatively integrated with either single or
coordinated oversight
3. Management by standards, not personality
4. Information flows rapidly up, down and across
Gone are the days of departmental silos, replaced by a much more
integrated operation. There is a plethora of research indicating the
efficacy of such integrated organizational systems.
The highest functioning chanceries have adopted standards of
management expressed in policies that are regularly practiced and
evaluated. It is interesting that many chanceries have “reinvented
the wheel” with regard to management standards. The Catholic
Standards for Excellence offered by the National Leadership
Roundtable on Church Management area great example of
standards that can be adopted without reinventing the wheel. The
good news about adopting these or similar standards is that doing
so does not require doing anything extra: its simply doing what
you have to do anyway, but doing it better and more effectively. In
addition, there is a version of the Catholic Standards for Excellence
for diocesan level and for parish level so there can be consistency
in management standards across the diocese. It is very low cost as
well as effective, and diocesan and/or parish local leaders can be
trained to do the implementation rather than using high priced
consultants. Many of the key differentiators between the great
and good chanceries are explicitly expressed within these Catholic
Standards for Excellence.
5. Culture of Respect and Action
In the highest functioning chanceries the staff regard parishes
as already smart and capable of fulfilling their mission. Their
relationship with parish leaders is collegial, and a far cry from
the “Them and Us” mentality seen in some dioceses. In other
words, the notion of the diocese as local church and of communio
extending to every parish and the chancery is well established.
Often, when the best chancery leaders get asked about how a
“Them and Us” mentality was overcome, they mention a history
of what amounts to a catechesis of the clergy and laity over three
to five years that has been focused on four areas:
• The link between communio and missio
• “Local Church’ as the diocese, not just individual parish
• The universal mission of the Church
• Right relationship between the roles of the laity and the ordained
Chancery staff uses their expertise in a context of preference for
connecting best practice parishes with good practice parishes. This
primary cultural mindset strengthens the experience of communio
between parishes, and is often more effective.
The highest functioning chanceries only do for parishes what they
cannot do for themselves. They regularly ask what they can stop
doing because parishes can do for themselves. They exercise a
rigorous “no” when asked to do those things that are properly and
realistically within the capacity of parishes to do for themselves.
It seems so basic, but it is also true, that in the highest functioning
chanceries, meetings always have agendas and result in action steps.
When there are action steps they have timeframes, coherent sequence
and personal accountability (actual names) attached to them.
Further, the agendas of most meetings involving senior chancery staff
involve short, mid and long-term vision items. This means that most
meetings make time for this multi-time framed focused. Agendas
reflect that choice. It means that lead chancery staff has the strategic
vision for the diocese in mind in all that they do.
A key cultural value of the highest functioning chanceries is
delivering real substance to parishioners on how to live a Catholic
life in diocesan communications. It is almost never in a defensive
mode. Communications is oriented toward creating a positive
‘Catholic’ narrative in the wider community. When serious crisis
communications is needed it is outsourced to highly competent
specialist providers.
Continued on page 31
32
Viewpoint
Convocation
Beat
September 2014
Continued from page 30
6. Talent is Managed for the Long-term Future Needs of the Diocese
The highest functioning chanceries effectively manage talent. There is investment in key employees, succession planning, a clear career
path for employees and attractive compensation. Leadership development has a valued place in the chancery such that the top leadership
regularly engaging in leadership development programs that focus on leadership competencies. These chanceries have a performance
management system is place that focuses the performance measurement of execution, not just effort.
Next Steps: Becoming a Great Chancery
There is no attempt here to describe everything about how chancery functions. These six characteristics are simply what I have observed
about the very best run and highest functioning chanceries I have seen across the US. Others may observe through different lenses and see
other common characteristics.
So how does a chancery move toward being a great chancery? I would suggest that there are five steps, one of which is external to the chancery
itself. The first step is to begin the catechesis as suggested in the section on culture: This is the context within which he chancery must operate and
without that, nothing else matters. The second step is to clarify and communicate to those within and beyond the chancery why the chancery exists
using the purposes outlined above as the beginning of a conversation. The third step is to ensure the right people are at the senor leadership table
using the characteristics outlined above. The fourth step is to begin integrating the structure, particularly that which directly serves parishes so that
the orientation toward great customer service can be operationalized. The fifth step is to start measuring the function of the chancery against some
established standards, one example of which is outlined above. I suggest that putting those steps as a priority will begin to raise the functioning of
any chancery, even those that are already good at what they do. The combination of these steps means moving forward in terms of organizational
structure, how resources are used and cultural transformation, all of which are needed for institutionalized high function.
There are chanceries I have seen that are not ready to move toward being a great chancery. The most common block I have observed among
these is not the six differentiators outlined here. These six factors are about making the chancery work smarter. The problems I see in those
that are not ready to work smarter are more about the health of the organization, not organizational intelligence. Patrick Lencioni outlines
healthy and smart for organizations, and how to deal with those in in his book The Advantage (Jossey-Bass, 2012). It suffices here to say
that for some chanceries the checklists Lencioni provides are a useful tools for moving forward.
What I see chanceries that are moving forward find useful doing is an honest assessment and building a single, simple roadmap that includes
up to four concurrent areas of focus, assigning timeframes and personal accountability. Everything that needs to be done does not need
to be done at once. I have noted that simply choosing up to four focus areas (Use the five steps outlined above as a guide) and putting the
rest into a parking lot where it can wait but not be forgotten is very helpful. For those who chose to move forward trying to do everything
appears overwhelming because it is overwhelming. However, making some choices and parking the rest until the time is right makes it
manageable. He main thing is, make a commitment, make a roadmap and make those first key steps. Have faith!
By Jim Lundholm-Eades
National Leadership Roundtable for Church Management
Quotation from SURVEYS post Convocation 2014 Napa
Regarding selecting a venue for 2015: “I think the venue is more important than the city, notwithstanding
the importance of balancing the venues across the nation and relative to the AJG client base. However,
what I think is very important is that you select a venue like the Meritage Resort in Napa where it is large
enough to accommodate all attendees in a single location (not like Georgetown a couple of years ago!). Also,
one of the nice aspects of the Meritage was though it was large enough to support the event, it was not so
large that we were intermixed with other unrelated events. Good job on this year’s venue!”
33
Convocation
Beat
Parish and School Accounting in the Cloud - Success Stories from the US
Catholic Dioceses
Presenters:
1. Deacon Bill Koniers: President, CathoNet; Deacon, Diocese of
Bridgeport
During the presentation, Deacon Bill described a standardization
success story – South West Airlines who managed growth during
the tough times by leveraging the following:
2. Phil Romine: Chief Technology Officer, CathoNet
• Standard, Industry Leading Aircraft (Boeing 737)
3. Mike Weis: CFO, Diocese of Dallas
• Standard Training, Procedures, Equipment, Terminology (Pilots,
Technicians, Ground Crew, Flight Crew, Maintenance, Parts, etc.)
4. Lisa Sakamoto: CFO, Diocese of Honolulu
5. Walt Nevolis: CFO, Diocese of Toledo
• Deacon Bill Koniers
And by focusing on their mission of “TRANSPORTING
PEOPLE; NOT FLYING AIRPLANES”
»» Business Executive, 40 year career, GE, Pirelli,
The presentation moved to the topic of “Accounting
Standardization” which should be a MUST in Dioceses because:
»» Air Products and Chemical Healthcare Group
• Attributes of an Effective General Ledger System
»» Deacon of the Diocese of Bridgeport, 2006-present
»» President of CathoNet, 2010-present
• Phil Romine
»» Technologist, 25+ year career, Data General,
telecommunications, Internet
»» Founder and CTO, Right Networks and CathoNet
The Fundamental Principles of this session were to discuss how
effective Fiscal Management of The Church Leads to Effective
Execution of the Church’s Mission which is threefold . . . . . Pastoral /
Sacramental / Educational and how timely, accurate fiscal Information
Leads to effective fiscal management of The Church
The challenges in the Church today are obvious . . . .
• Erratic Conformance to Diocesan Policies by Parishes and
Schools leads to financial risk
• Reliability and Security of Computer Systems; Incompatible
Accounting Software
»» Up-to-Date Fiscal Information is Readily Available to
Decision Makers
»» System is Easy-to-Use So Employees Can Actually Use It
»» Financial Reports are Easy to Produce and Easy to Understand
• Fortune 500 Class Tools are Currently In Use by Dioceses Across
the United States
• The many benefits were described . . . . Timely Apples-to-Apples
Comparisons due to Benchmarking, Improved Oversight /
Flexibility of Employees since everyone can help everywhere /
Implicitly Improves Communication through the use of
standardized vernacular and finally / transferability of best
practices because what works well for one can work well for all
Leveraging Technology for Accounting Standardization can only be
accomplished today through using a standard software solution that
can be used in the cloud
When choosing fiscal management software, there are several
considerations:
• Delayed, Inconsistent, and Inaccurate Financial Statements
• Industry-Standard Accounting Software
• Delays in Delivering Assistance Where Needed
• Industry-Specific Accounting Software
• “Putting Out Fires” instead of “Planning Ahead”
• Key Comparison Criteria
»» Vendor Viability
Improving Fiscal Management can ONLY come about through:
• Standardization through using standard Tools and standard
processes
• Communication that is timely and accurate using a common
vernacular
»» Vendor “Bandwidth”
»» Vendor Ecosystem
»» Familiarity of Solution / Cost of Adoption
• Think “Southwest Airlines”
Continued on page 33
34
Viewpoint
Convocation
Beat
September 2014
Parish and School Accounting in the Cloud - Success Stories from the US Catholic Dioceses Continued from Page 32
There are many benefits from using Cloud Technology:
Diocese of Honolulu - Lisa Sakamoto
• Simplifies Information Technology Challenges
• Why a Cloud-Based Solution?
»» Less to manage on local systems
»» Needed access to data
»» Improved Security
»» Minimal cost to parishes + schools
»» Improved Flexibility – Anywhere, Anytime, Anyone
»» Assured back-up of the system 24/7
• Provides Real Time Communication
»» Standard Implementation
»» Secure, Instant Access to Information
»» 80% of parishes + schools already using QuickBooks
• Project Methodology
»» Required buy-in from the Bishop / Presbyteral Council /
College of Consultors / Pastors + Business Managers
• Enables Improved Transparency and Controls
»» A Team standardized the COA
Three Case Studies were presented by the Diocesan CFO’s”
»» Developed a Training Manual
Diocese of Dallas - Mike Weis
• PROFILE
»» 77 parishes + 28 Schools with 1.2M Catholics
• Biggest Cultural Challenges
»» Acceptance by all that standardization was needed
»» Concern over centralized monitoring of financials
»» Finding a common chart of accounts
• Motivations for Standardization
»» Inconsistent treatment of revenues – expenses – assessment
reporting
»» Needed ability to resolve problems quickly
»» Disparate / lack of / or unsupported software
• Why a Cloud-Based Solution?
• Project Methodology
»» Training to all entities was provided at no-cost
»» There was much follow-up with problematic parishes + schools
»» Project started in September 2010 – ended July 2013
• Benefits
»» Now receiving timely, accurate + COMPLETE financial
reports – accessed on-demand + not dependent on parishes +
schools to transmit
»» Consolidated Financial reports at the “Press of a Button”
Diocese of Toledo - Walt Nevolis
• PROFILE
»» 124 parishes + 80 Schools with 320.0K Catholics
• Biggest Cultural Challenges
»» Needed 21st Century tools
»» Acceptance by Pastors + Business Managers. Thought the
diocese was looking for issues + problems.
»» No infrastructure resources available internally
»» Perception that parishes + Schools were losing their independence.
»» Required data security
• Project Methodology
• Motivations for Standardization
»» Lack of consistent financial information across the diocese.
»» Leadership by our Bishop to announce + citing Benefits
»» Allow for review of financial statements remotely
»» A Team standardized the COA + Report Templates
»» Develop best practices for the more complex financial
transactions (tuition, fundraising)
»» Training was deployed throughout the diocese
• Benefits
»» Ability to report consolidated/consolidating financials
»» Chancery access to all parish + school accounting data +
reporting on demand
»» Consistent solutions to accounting problems
»» Cross training and cross-experience is greatly facilitated
• Why a Cloud-Based Solution?
»» Timely back-up
»» Access from anywhere
»» Business Managers can work on other parishes when needed
»» 75% already using QuickBooks
»» Project Methodology
»» March 2012 – Bishop Approved + supported the project
»» April 2012 – meet with Business Managers and Pastors for
inputs for vendor selection phases
Continued on page 34
35
Convocation
Beat
Continued from page 33
Parish and School Accounting in the Cloud - Success
Stories from the US Catholic Dioceses Continued
On the cover... Treasure Chest Key
8
May/June 2012 – Presentations by perspective partners
7
»» September 2012 – Announcement of CathoNet
»» October/November 2012 – information sessions with parishes.
Working on standard chart of accounts and training sessions.
9
12
»» December 2012 through March 2013 – parishes were
on-boarded to the cloud
»» March 2013 – more formalized training, cost picked up by the
diocese
10
6
»» July 2013 – went live with standard chart of accounts
11
3
• Benefits
»» Move towards Business Managers taking ownership for timely
and accurate reporting.
»» Consistency gives the Business Managers and Pastors a similar
platform across the diocese. Need to learn new process and
procedures are greatly reduced.
»» Audit can assist parishes in reporting issues prior to field work.
»» Continue to work with the parishes and on CathoNet/
QuickBooks issues through the Accounting Oversight
Committee which is comprised of parish personnel as well as
diocesan individuals
1
5
4
2
We are pleased to have artist, Maria White, once again
providing us with a personalized sketch of our diverse and
cultural treasures in Chicagoland.
www.mariasart@gifts4u.com
1. Italian - spaghetti, the tower of Pisa and
Tuscan Trees
2. Ukranian - decorative eggs
Quotations from SURVEYS post
Convocation 2014 Napa
“The planning was outstanding and the
venue was well selected. Most importantly,
the format was concise and efficient;
something lacking in most meetings / events
these days!”
“I loved using my iPad and being paperless.
I also loved Patrick Lencioni’s session. I felt
re-energized, and a greater sense of purpose
when I returned to work on Monday.
Thanks for all you do!”
3. Hispanic - Sombrero
4. Greek - Grecian Urn
5. Irish caladdagh represents love, loyalty
and friendship
6. Jewish - Menorah & Scrolls
7. Germanic costume and alpine hat
8. Polish Flag
9. African American symbols - turtle
signifies adaptability, heart shaped
beetle - power of love, 4 circles signifies
strength, spear and shield
10. Irish Celtic cross
11. Muslim symbols and head scarf
12. Chicago Water Tower
World Youth Day – Krakow 2016
World Youth Day 2016 provides a once in a lifetime opportunity!
Make sure you are prepared: mentally, spiritually, physically… and medically.
Gallagher Charitable International Insurance Services (GCIIS) in partnership with underwriters at Lloyd’s of
London has developed International products specifically designed for those travelling outside their home country.
This plan is designed to protect you and your financial investment.
We are pleased to offer participants of WYD 2016 the International Coverages needed for worry free travel. Email
or call us for more information.
TRIP CANCELLATION BENEFITS
INTERNATIONAL TRAVEL INSURANCE
Benefit
•Trip Cancellation/Interruption
•Financial Default of a Travel Supplier
•Terrorist Incident
•Organized labor strike, natural disaster
or bad weather
•Hijacked or medically quarantined
•Summoned to serve on a jury or served
with a court order
•Travel Delay (due to Travel Supplier, Lost
Travel Documents, Medical Quarantine,
Natural Disaster, Emergency Illness)
Limit
$100,000
Reduced to $10,000 for those under age 12 or age 70
and over
Medical Expenses
$100 deductible
$10,000
Primary coverage; $2,500 of this limit is available to pay
US providers; no pre-existing condition exclusion
Disability Income Benefit
(no benefit if under age 12 or 70
and over)
$1,000 / month
$500 / month
$250 / month
First 100 Months — Accident
Months 101-200 — Accident
50 Months — Sickness (after 3 month waiting period)
Assistance Service
Included
Available 24/7/365 for assistance with worldwide medical
emergencies; provided by Specialty Assist™
Emergency Medical Evacuation
$100,000
Coordinated by Specialty Assist™; will bring insured back
to USA; no pre-existing condition exclusions
Crisis Management Service
Included
Available 24/7/365 for assistance with worldwide nonmedical emergencies; provided by red24
Security Evacuation
$100,000
Coordinated by red24; for evacuation due to natural
disasters, civil unrest, crime, kidnap/hostage situations
Family Coordination &
Repatriation of Mortal Remains
$25,000
Combined limit for both benefits and includes a sublimit
of $2,500 for extra expenses incurred during an approved
evacuation
Personal Property $100
deductible
$2,500
“Door to door”, replacement cost coverage; includes
checked baggage; higher limits available upon request
General Liability
$1,000,000
Worldwide jurisdiction; includes coverage for injury to a
volunteer; covers volunteer and sending organization
RATE
$3.30 PER PERSON PER DAY
•Baggage Delay
MAXIMUM BENEFIT PER
PARTICIPANT
•Trip Cancellation/Interruption: $10,000
•Travel Delay: $500 ($100 per day)
•Baggage Delay: $100
RATE: $5.20 PER DAY
Comments
Accidental Death &
Dismemberment
Dana Crowl
Senior Vice President — Program Manager
Gallagher Charitable International Insurance
1301 Gervais St., Suite 400 | Columbia, SC 29201
C 864.907.2185 | O 864.239.2426 | F 864.751.5900
gallaghercharitable.ajg.com
gallaghercharitable@ajg.com
© 2014 Arthur J. Gallagher & Co. All rights reserved.
14BSD26194A
Gallagher Charitable
Play Like a Champion Today Coach and Sport Parent Education Program
Play Like a Champion Today provides leadership in a worldwide effort to renew the culture of sport
for youth. It does this primarily by educating ethically responsible sport leaders--coaches,
parents, and athletes--who in turn will reach millions of young people.
Sports as Ministry
Educational Program
youth & High School
coach ClinicS
4-5 hour clinic presented by Play
Like a Champion staff to coaches
and administrators
PARENT WORKSHOP
1 hour workshop for sport parents
and families
ATHLETE Leadership
RETREATS & Seminars
90 minute to day-long programs
for student-athletes and leaders in
the school community
ATHLETIC DEPARTMENT
ETHICAL INVENTORY
Crafted by leaders in the fields of sports psychology, coaching education, Catholic
theology, and moral development, Play Like a Champion Today is:
•Centered around the principles of justice, tolerance, respect, and solidarity
•Designed using the best athlete-centered practices supported by research into
character development and faith formation through sports
•Presented with the support, tradition, and resources of academic and athletic
excellence that mark the University of Notre Dame
Play Like a Champion Today deals with tough sport issues & supports schools in promoting:
•Athletics as Character-Building to Athletes and Families
•Building Teams as Moral Communities
•Champion-Centered Best Coaching and Sport
Parenting Practices
•Sportsmanship
•Responsible Decision Making
Over the course of the clinic, participants will learn about:
•The Spirituality of Sport
•The GROW Approach to Athlete Motivation
•Child Development
•Promoting a Safe Sport Environment
•Strategies for Developing Partnerships Between
Coaches and Parents.
Ongoing assessment,
consultation, and support
Advanced Clinics
1-2 hour clinics on topics of
interest to your school community
playlikeachampion.nd.edu
plc@nd.edu
Working with Coaches and Sport Leaders to Shape a Positve Sports Culture for All Young People since 2006.
© Play Like a Champion Today, Alliance for Catholic Education, University of Notre Dame
Viewpoint
38
September 2014
GALLAGHER GROUP OF COMPANIES RELIGIOUS PRACTICE
Quarterly Calendar of Events supporting the Church
Make the Gallagher Post your home page for links to other
resources and updates on our resource building for the church.
Go to www.gallagherpost.com.
SEPTEMBER 2014
21-23
Gallagher exhibits at DFMC 2014 as Gold Sponsor
21-23
Nonprofit Risk Management SUMMIT at the Hard Rock Hotel in
Chicago
Brit Specialty Insurance hosts Cubs vs. Cards in Rooftop of
Wrigley Field for BPIC members and guests
Gallagher’s Religious Practice Meeting for its Group of
Companies
Gallagher’s Annual Gala DFMC Dinner at the Hyatt Regency
Chicago, hosted by Chairman & CEO, J. Patrick Gallagher
Western Catholic Insurance Company (WCIC) Board Meeting
at the Archdiocese of San Francisco
Diocesan Risk Managers FORUM quarterly networking webinar
@ 10 am Central
22
23
23
25
30
OCTOBER 2014
9-10
22
Ask us about our
commitment to corporate
social responsibility!
26-28
BoardSource annual meeting for Nonprofit Leaders in
Washington DC
Convocation Webinar for the Diocesan Community – The best of
our 30 workshops
BPIC Board Meeting in Springfield IL
NOVEMBER 2014
18
4-7
19
Bishop Paprocki, Episcopal Moderator for BPIC, hosts the
annual member Bishops’ Dinner in Baltimore at the Evergreen
Museum & Library
RCRI (Resource Center for Religious Institutes) annual meeting
in St. Louis MO
Diocesan Risk Managers FORUM quarterly networking webinar
@ 10 am Central
DECEMBER 2014
TBD
BPIC Renewal Webinar for Members (ajg.acrobat.com/bpic)
Want to network with diocesan peers or professionals in the Gallagher Group
of Companies? Visit www.gallagherpost.com and click on “contact THE POST.”
39
40
Viewpoint
September 2014
For More Information
Peter Persuitti
Managing Director, Religious Practice
Arthur J. Gallagher & Co.
Two Pierce Place
Itasca, IL 60143
888.285.5106
peter_persuitti@ajg.com
www.gallagherpost.com