SOMERSET, NJ - Rev. Douglas J. Haefner “borrowed” around $500,000 – an amount substantiated by an unreleased internal audit – from church coffers to fund “compulsive behaviors,” according to Bishop James F. Checchio of the Metuchen Diocese.

Checchio visited St. Matthias Church on Monday night to address the concerns of parishioners and offer insight into Haefner’s sudden departure from the parish last week.

“One of the things I noticed early on after I started going through the parish finances was that St. Matthias is struggling to pay its bills,” Checchio said.

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The diocese repeatedly tried to audit the church’s finances for at least two years, but Haefner’s declining health kept the books from being scrutinized.

The last time the diocese audited St. Matthias was in 2009.

“The last time we went out to do it the father was in the hospital that day,” Checchio said. “So we knew it wasn’t made up reasons why they were canceling.”

Throughout the repeated attempts to discover why the church operated in the red, the bishop and the diocese had faith that they could fix the problem, that they could work with Haefner and church staff to turn the church around.

Then, a few weeks ago, Haefner visited Checchio at his office.

“[Haefner] came to see me in my office, and he said, ‘I need help,’” Checchio told the confused and mourning congregation. “‘I’ve been sick. My physical but also emotional problems that I've been struggling with are feeding off each other. Some of my emotional problems have led to compulsive behavior on my part, and the compulsive behavior cost money.’ [Haefner] said, ‘I borrowed money from the parish.’”

That’s when Haefner told Checchio that the amount he “borrowed” from the church could be $500,000.

At this point, Checchio counseled the troubled priest to go for an evaluation of his physical and mental health. When he came back about a week later, they both agreed that Haefner should step away from the church and work on his health full time. Checchio also told the priest of his concern that he’d committed a crime, and revealed that he notified law enforcement.

Checchio declined to disclose who is investigating the matter for law enforcement.

“Law enforcement don’t even want me to say who is investigating,” said Checchio.

The diocese itself has been plagued with financial trouble in the past. According to Checchio, the diocese had a $4 million deficit when he was appointed bishop two years ago, which he said was corrected this year.

The absence of controls to prevent an event like this concerned many church members in attendance.

The diocese lacks a specific timeline for audits, a policy that Checchio wanted to change before this became known. Now the Metuchen Diocese will audit its churches every two or three years.

“We’re developing a new program to do more regular audits in our parishes,” Checchio said. “It doesn’t help you, it doesn’t help here, but the more transparent we can be with our finances the better.”

According to church law, St. Matthias should have an active priest-appointed financial council that meets at least quarterly to review the church’s budget and prepare its annual report, among other duties.

The financial council hasn’t been active in years.

Without the financial council, Haefner prepared the church’s annual financial reports to the diocese.

“There’s no clear way to see where the money was taken from,” Checchio said. “The expenses were all spread out, so you wouldn’t know by looking at the annual reports.”

Checchio told concerned parents in the audience that St. Matthias School operates with a separate budget, and that the school hasn’t been operating with a deficit. But he stressed that it remains to be seen exactly where the money came from until the full audit by the diocese is complete.

“I do know that the school is going to be cared for and the parish is going to be cared for. There’s no deficit showing on the books right now for the school. As soon as we’re able, we’re going to release whatever we can, but that’s not up to me,” Checchio said.

Despite the serious allegations against him, the love and concern for Haefner – known to the parish community as Father Doug – was apparent at Monday’s meeting.

Some felt that they had let the 27-year leader of the church down by missing signs that the priest was struggling.

Checchio echoed their concerns.

“I’m sorry if I neglected Father Doug,” Checchio said. “I’ve been looking back in my mind to see what signs I missed. What signs did I miss to help him sooner? I offered it to him, I tried to talk to him about it, but he’d always say it was fine.”