The Archdiocese of Boston released its Financial Transparency Report Wednesday in a press conference at St. John’s Seminary for the 2004 and 2005 fiscal years, revealing a $38 million dollar debt, mainly stemming from widespread sexual abuse settlements dating back to 2002.

The church’s financial representative Jack McCarthy explained that the report discloses the audited financial statements of the Roman Catholic Archbishop of Boston between July 1, 2003 and June 30, 2005, listing the sources of the archdiocese’s funds and how they were used, specifically regarding the payments made in the sexual abuse settlements.

The total money distributed by the archdiocese for sexual abuse settlements and related costs prior to June 30, 2005 was $150.8 million, $127.4 million of which was allocated for sexual abuse settlements with the remaining $23.4 million directed towards abuse prevention efforts, therapy for survivors and legal costs.

The archdiocese received funding for these payments from a variety of sources, including $85.3 million from real estate sales, $43.4 million from Lumbermens Mutual Insurance Company, $20.1 million from self-insurance reserves and $2 million from donations to provide therapy for sexual abuse victims.

At the press conference, Cardinal Sean O’Malley offered his “sincere apologies” to sexual abuse victims and their families and said he hoped that the community would be able to “work together to rebuild the church of Boston.”

Speaking in front of a large press audience, Cardinal O’Malley emphasized the Archdiocese’s commitment to maintaining financial transparency in order to eliminate the “mystery surrounding the finances of the Archdiocese.” According to O’Malley, the church disclosed the financial information in hopes of illuminating the reasons for the church’s financial crisis.

O’Malley said that making the financial records available to the public will act as evidence of the church’s investment in the individuals it serves, invoke awareness within the community of the church’s financial situation and enable the church to fully recover its finances by the end of the summer 2006.

Church financial advisor Jack McCarthy — who heads a committee comprised of outside financial, business and academic experts and clergy designed to aid in the process to create financial transparency and return the budget to stability — made suggestions to reorganize the church’s finances.

McCarthy said the committee suggested a reorganization of the cabinet by reducing the number of secretaries and consolidating cabinet functions. The committee also recommended that the archdiocese attempt to improve the relationships between pastors, priests and parishioners and the central operations — specifically through “regionalization,” or granting more authority, that would increase the church’s power to make financial decisions at the local level, McCarthy added.

Those displaced by the elimination of positions will be offered the opportunity to transfer elsewhere, O’Malley said. And with the plan to increase local churches’ power to manage finances, O’Malley promised the church will be more in tune to the needs of the parish community in hopes of catalyzing the community’s trust in the church.

The committee plans to implement a five-year capital plan involving all sectors of the church to improve their financial situation, although initial details were vague, McCarthy said.

Offering a more immediate financial solution, the committee also proposed ideas to help the archdiocese develop a balanced budget over the next 18 months. The archdiocese intends to create revenue through additional property sales and donations, and the committee hopes to reach a balanced budget by 2007 and to be relieved entirely of debt by 2008.

In attempt to retain the trust of the parish’s community, O’Malley asserted in his closing statement that “the transparency will continue as part of the standard practice.”

“We are poised to stop the bleeding,” O’Malley said, and asked that the Archdiocese be “rightfully judged by our actions, not simply by our words,” hoping the disclosure shows an act of good faith.