CHA posts $1.1 million loss
Total revenue declines 9% to $16.5 million
The Catholic Health Association reported significant losses for the year ended in June, driven by declining investment returns during a year when the association needed to dip into long-term savings to fund general operations.
Tax forms show the St. Louis-based trade group ended the fiscal year with a net loss of $1.1 million, a significant swing from the prior year, when the association closed its books with a $482,000 profit. Total revenue declined 9% to $16.5 million in the 12 months ended June 30, according to the annual tax forms for the fiscal year that were filed in mid-December.
However, using generally accepted accounting principles that include unrealized losses on investments, the association actually posted a loss of $7.7 million in net assets in the fiscal year. That loss was buried inside the tax forms, but reported at the top of a CHA management letter discussing audited financial statements.
Investments, which in the past have buoyed the association’s bottom line, hurt the organization’s finances in 2009. The CHA booked $6.4 million in losses on its long-term investments, including realized and unrealized losses, and used another $1.3 million of investment income to support general operations. The value of the CHA’s investments dropped 22% to $22.5 million from $29 million at the end of the prior period.
Executives tried to cast financial results in a positive light, noting that the association had budgeted to draw up to $3.4 million out of investments for operations, officials said in a management discussion of audited financial statements posted at the association’s Web site. “CHA continues to be in strong financial health, despite the losses on long-term investments. These investment losses are an unfortunate but natural part of the market and economic cycle and are consistent with overall results in the capital markets,” the management discussion letter says. “No adverse impact on CHA’s ability to serve its members from the downturn in the capital markets is anticipated.”
Membership dues generated $15 million in revenue in the fiscal year, a 4% rise from $14.4 million in the previous fiscal year, which the letter described as an unexpected increase in dues revenue. Total expenses decreased by a negligible amount to $17.5 million during the fiscal period, from $17.6 million in the year prior. That includes a 15% drop in lobbying expenses in the most recent fiscal period to $821,634.
Sister Carol Keehan, president and CEO of the association, earned total compensation of $963,436, including a base salary of $664,654, bonuses of $155,000 and other miscellaneous pay totaling $143,782. The association says it pays Keehan’s salary to her religious order, the Daughters of Charity. Former top executive the Rev. Michael Place, who left in October 2005, received $231,000 in compensation as the final payment in his post-employment agreement with CHA.
Keehan earned a total compensation of $963,436 in 2009.