This report discusses the financial reporting policies and financial condition of Catholic Charities Archdiocese Houston-Galveston, a large nonprofit human services organization. In the analysis, the performance of critical accounting processes, financial statements, allocations of expenditure, assets and liabilities, debt levels as well as revenue is investigated. The transactions are recorded in terms of standard nonprofit accounting principles so that they can be summarized and consolidated into quarterly and annual statements that incorporate data across divisions. All donations, grants, and contracts are recorded using either restricted or unrestricted funds to ensure transparency on how donated money is used. Audited statements in the last fiscal year have reflected $33.3 million in revenue from both government and private grants and contributions, along with $30 million in program-related expenses, implying an 8.9% debt ratio that is relatively low. Multi-year assessment suggests stable, varied funding streams that will result in a proportion of human services as opposed to administrator costs. Appropriately, low liabilities and relatively stable pandemic-level revenues indicate the accumulative evidence of financial stability present in the current situation. Recommended actions that will help continue to communicate the finances and promote balanced growth include regular audits, real-time metrics available on dashboard platforms, as well as working with accountants/investment advisors on expansion plans. Improved analysis can provide the means to turn leadership decisions into vital services sustained and expanded by Catholic Charities throughout the greater Houston area and focused on the needs of vulnerable populations. The audit provides a broad view of the value of smart financial management and has been used as a strategic tool to advance and back up this organization’s critical mission in the community.

Introduction

Catholic Charities Archdiocese Houston-Galveston is a big nonprofit organization that engages in providing human services that are essential for the performance and impact of the community and appropriate strategies and financial posture have a major impact. A general approach to the financial management of this institution will be discussed in light of the analysis of the chosen accounting strategies measures, financial reporting statements and indicators of fiscal stability will form a good basis for analysis. The analysis of the testing provides us with an insight into where the financial data is created, and how it can be used for decision-making throughout the entire enterprise. Investigation demonstrates stagnant dynamic finances that have the chance of enhancing in terms of transparency, growth plan, and partnering with professional advisory firms.

Accounting Processes

As a big nonprofit human services organization operating in the Houston-Galveston region of the US economy, its agencies employ standard accounting principles and practices to fully capture all transactions under which they run for the production of financial statements that reflect true and full accounts of money (Sterns & Atwater, 2020). These include large-scale processes like double-entry accounting which is an accounting method where every single transaction is recorded in at least two accounts to achieve accuracy and prevent erroneous errors. This financial data is comprehensive and has been recorded from various parts of Catholic Charities divisions and programs such as refugee resettlement, rental assistance, homelessness prevention, counseling services, senior services, and youth support among other programs. The organization’s finance department collects this financial information from various programs and divisions, although discreetly consolidates these figures before the quarterly and annual financial statements (Archdiocese of Galveston-Houston, 2021). Other major summaries are quarterly or annual statements that depict information budget, revenues and expenditures, assets/liabilities, equity, and essential key transactions over the reviewed period. Moreover, the annual auditing by a certified public accountant is not the only sign of full validation: it also should be accompanied by the observance of accounting regulations and practices throughout.

Funds and Financial Reports

Classification of funds for Catholic Charities Archdiocese Houston-Galveston is done as a nonprofit organization where the fund is divided into two categories – Restricted or unrestricted to simplify financial tracking and reporting (Archdiocese of Galveston-Houston, 2021). Whereas restricted funds are provided by specific external sources including government and private grants as well as donor contributions or service contracts that designate or restrict funding