The Catholic Diocese of Lismore confirmed in a statement that Nambucca Valley Parish administrator Father Shelwin Fernandez, from the Philippines, had been removed from his post as a result of investigations into missing money.

"The Bishop of Lismore, Gregory Homeing OCD, was informed of financial irregularities at the Nambucca Valley Parish on April 24, 2023," a diocesan spokesman said.

"The bishop then travelled to Nambucca Valley Parish on May 11, 2023 to personally explain the situation and listen to parishioners.

"As the matter has been referred to the NSW Police it would be inappropriate for the diocese to comment further at this time."

It's understood Father Fernandez was sent to Port Macquarie for psychological assessment after members of the church discovered vast amounts of money missing in April, dating back to August.

While the total amount is still under investigation, it's believed it could be more than $300,000.

A member of the parish told the Newcastle Herald that Father Fernandez had always come across as a "holy and caring priest" and the congregation was stunned to learn he was under investigation.

"It was obviously a shock and there was a lot of disbelief," he said.

"There was no indication at all from him that there was anything going on."

NSW Police has confirmed it has been made aware of the situation.

In 1998 the Nambucca Valley Parish merged its four churches in Taylors Arm, Bowraville, Nambucca Heads and Macksville within the Lismore Diocese.

When the bishop came to explain the situation in May, anyone from the four parishes was invited to ask questions and share their concerns.

According to a member of the church, they were told the diocese didn't yet know the full amount of money involved but that the money had been sent overseas.

He said members of the parish who had lent money to Father Fernandez were told by the bishop that the diocese would return the funds, and repay any funds missing from the church bank accounts.

The parish funds are under the control of the church administrator, with financial decisions guided by a financial council made up of highly-respected members of the church.

The discrepancies were discovered by the financial council, who reported the issue to the bishop in April.

It's understood the council meets once a month to discuss financial decisions, but had stopped receiving bank statements from Father Fernandez when the church's volunteer bookkeeper left around August last year.

While investigations are under way, the diocese has tightened processes at the church, reviewing how its money is accessed.

In the interim, a Carmelite priest has been installed to look after the spiritual needs of the parish. Carmelites take vows of poverty, chastity and obedience.

Father Fernandez studied for seven years to become a priest and was ordained as a deacon at a special church service at St Carthage's Cathedral in Lismore in November 2010.

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