Diocese of New Jersey confronting ‘disarray’ in past financial accounting, bishop says

By David Paulsen
Posted Mar 21, 2024

[Episcopal News Service] The Diocese of New Jersey has embarked on a thorough evaluation of its finances, accounting protocols and record-keeping after Bishop Sally French recently revealed a “complex” situation that has “made our diocese vulnerable and must be addressed promptly.”

French, who was consecrated as bishop in June 2023, shared a broad range of concerns about the diocese’s past handling of its finances in a Feb. 27 letter and again in her speech March 9 at the diocese’s annual convention. She assured the diocese in her letter that there was “no indication of any financial malfeasance or fraud,” and she urged patience as diocesan leaders determine the full scope of the matter.

“As many of you know, we have some disarray,” French said in her convention speech, which cited uncompleted, overdue audits going back to 2019. “We have not been accurate in our record-keeping, our deposits or our disbursements to congregations, and more. I want to emphasize that while we need to restore clarity, there is no sense of any malfeasance. It is simply that we have failed to keep our financial house in order.

She also alluded to “some changes in staffing” as the diocese works “to re-establish best practices and strengthen our financial and administrative well-being.”

Previously, in her letter to the diocese, French specified that Phyllis Jones, who had served as canon to the ordinary for finance and administration and as acting chief financial officer, was stepping down. The diocese plans to retain an accounting firm to help sort out the diocese’s finances, French said in the letter.

French also said she was grateful for the leadership of her predecessor, Bishop Chip Stokes, who had begun working to resolve these issues at the end of his tenure. French said she found no indication that Stokes bears responsibility for the diocese’s current financial situation, and “some of the more serious challenges only became known in the past week.”

The diocese has not detailed those challenges in public, and when asked by Episcopal News Service to clarify, French responded by email and referred to the descriptions in her letter and her convention speech.

“As the bishop of New Jersey, my first priority is the people and the congregations of our diocese, and I want to ensure that they hear from me directly as we address the financial priorities I have outlined,” she told ENS. “We will be issuing periodic updates to the diocese as more information is available.”

Until then, her letter summarizes in general terms the extent of the issues facing the diocese:

  • “We have not maintained appropriate financial and administrative controls,” French wrote.
  • “We know that we have not made substantial progress toward completing overdue diocesan audits.”
  • The diocese has not “maintained canonical protocols and financial controls regarding disbursements from diocesan trust funds.”
  • It has not “provided updated and accurate information to the Trustees of Church Property.”
  • “We also face errors in our financial recordkeeping.”
  • French also noted that “many of our congregations have not regularly been receiving payments due to them from the proceeds of mortgage held by the diocese.”

At the convention, French added that there was no reason for congregations to be concerned about investments in the diocese’s investment trust. “Those funds are separately administered and secure, and our protocols for fund disbursements and withdrawals are carefully and faithfully administered.”

French closed her discussion of the matter at the convention by upholding the principle of transparency in diocesan finances and governance.

“You deserve to know about the financial realities of the Diocese of New Jersey and how we are responding to those realities, and how I am responding as your bishop,” she said. “Clear, timely and appropriate access to relevant information is critical for a healthy and well-functioning system. I believe the changes now underway represent a significant step towards healthy and transparent governance.”

– David Paulsen is a senior reporter and editor for Episcopal News Service based in Wisconsin. He can be reached at dpaulsen@episcopalchurch.org.