TABLE OF CONTENTS

PAGE

1. Letter from Cardinal Seán P. O’Malley, OFM Cap. 3

2. Chancellor’s Annual Overview 5

3. Managements Discussion and Analysis of Financial Position and 11 Results of Activities

4. The Roman Catholic Archbishop of , A Corporation Sole 32 Financial Statements, Supplemental Schedules and Report of Independent Certified Public Accountants

5. Compensation and Vendor Expenditure Disclosure 67

6. Funding for Abuse Settlements and Related Costs 70

7. Audited Financial Statements of Corporation Sole’s Related 72 Organizations

8. Financial Statements of Corporation Sole’s 75

9. Finance Council and Committee Members 83

10. Finance Council Charter 85

Page 2 · 2008 Financial Report for the Archdiocese of Boston

Seán P. Cardinal O’Malley, OFM, Cap. Roman Catholic Archbishop of Boston

My Dear Friends in Christ,

Last November we gathered at the Cathedral of the Holy Cross for a magnificent celebration of the Archdiocese of Boston’s Bicentennial. The depth and breadth of our history and the vitality of our local church in this present time were brought forth as we made the commitment to continue building on the foundations established by our predecessors.

This annual report shows us that the Archdiocese’s overall financial condition has improved over the last year, continuing the positive trend of recent years. The report also indicates that we face a number of challenges, including an unprecedented number of requests for services for the poor and those who find themselves in a never expected circumstance of need. The economic declines and job losses of the past year have impacted many people. We will do everything we can to respond to all who ask for our help.

Our schools also present a challenge, but we are making great strides with the Archdiocese’s Campaign for Catholic Education. In the fall of 2008, we marked the opening of the Pope John Paul II Catholic Academy in Dorchester and Mattapan, following the previous year’s opening of Trinity Catholic Academy in Brockton. These achievements are the product of -based regional planning, guided by the tireless efforts of Jack Connors, Peter Lynch, John Fish, Tom Shields and Kathleen Driscoll. Their leadership has been invaluable for this initiative.

In June of 2008, we relocated our central ministries to the new Archdiocesan Pastoral Center in Braintree. I am deeply grateful to the late Thomas Flatley and his family for their generosity in making this possible. The heart of the Center is the beautiful Bethany Chapel, where the prayer and celebration of the sacraments offered each day are the source of our strength and vision. We are pleased that the Pastoral Center has become a gathering place for meetings, training sessions and special events, and that people from the surrounding communities join us for daily Mass. The entire Catholic community and all our friends are welcome here.

Looking ahead, it is critical that we proceed with pastoral planning based on a realistic assessment of our available resources. This process will call for us to make choices among competing needs, a difficult but necessary task. We will be greatly

Page 3 · 2008 Financial Report for the Archdiocese of Boston Seán P. Cardinal O’Malley, OFM, Cap. Roman Catholic Archbishop of Boston

assisted in this work by experienced personnel who have joined the Archdiocesan team and will help guide our planning .

During the Easter season we are called to reflect on the circumstances of Jesus’ followers in the time after His resurrection. They also faced significant challenges, and at times great uncertainty, but with the strength given them by the Spirit they persevered and succeeded. With that same gift of the Spirit, let us go forward together to fulfill the mission entrusted to us.

Devotedly yours in Christ,

Seán P. Cardinal O’Malley, OFM, Cap. Archbishop of Boston

Page 4 · 2008 Financial Report for the Archdiocese of Boston

James P. McDonough, Chancellor Secretary for Financial and Administrative Services

I am pleased to report that the financial state of the Archdiocese continues to improve and build on the achievements of recent years even as we continue to address a number of remaining challenges. Our parishioners have again increased their support for the parishes and the Catholic Appeal; Central Ministries are making the necessary adjustments to eliminate its budget deficit, and we are weathering the current economic turmoil through careful management of expenses and day-to-day operations.

The primary focus of this report is the fiscal year ended June 30, 2008, for which the audited financial statements of the Roman Catholic Archbishop of Boston, A Corporation Sole and its related organizations are included. These comprehensive statements are also available on the Archdiocese’s new website, bostoncatholic.org. This report also addresses the challenges faced in recent years and the progress we made during 2008 and the early part of 2009.

In keeping with the Archdiocese’s commitment to financial transparency, beginning with the financial statements for fiscal year 2005, we have provided the Catholic community, and all interested parties, a comprehensive analysis of our operations and financial condition. This report seeks to again provide, in as complete a way as possible, our financial position and the changes in our net assets.

CENTRAL MINISTRIES:

In June of 2008, the offices of the Central Ministries were moved to the Pastoral Center in Braintree. Kevin Kiley, a key member of our leadership team, directed all aspects of the move and brought us to a new location for our ministries that is efficient and well organized. The beautifully crafted Bethany Chapel, the heart of the Pastoral Center, was completed over the course of last summer and blessed by Cardinal Seán on October 1, 2008. Mass is celebrated there each weekday at 12:05 PM and is well attended by our staff and members of the faithful from Braintree and surrounding communities. We are forever indebted to the late Thomas Flatley and his family for the magnificent gift of the new Pastoral Center of the Archdiocese of Boston; it is a testament to Mr. Flatley’s dedication to his faith and his love of the Church.

Most importantly, the Pastoral Center allows our dedicated staff to more effectively support the work of our and lay faithful in the 292 parishes of the Archdiocese.

Page 5 · 2008 Financial Report for the Archdiocese of Boston Page 6 Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report · Financial 2008 balanced a of goal our that discipline ourparishes follow andbenefactors expect supporters and the from us. fiscal the toward with operating working to committed are are We and FY2010. for 2009 budget FY for the million of reduce $2.3 to result expect to We the deficit was entities. related charges) by paid time costs one of allocation of the in (exclusive changes FY2008 in deficit million $4 The priority. a be to continues Ministries Central for budget balanced a to commitment Our theywhatever to serving their help need of mission God. fulfill people of the much areMarriagemore. to our provide parishes Ministries and withhere We Religious Education, Ministrywork Youth of Evangelization, and Cultural Ministries, and pastoral wideour ministerial departments aofsupport the offer range important for FinancialHumanMaintenance, and Fundraising. Resources Planning, Additionally, in staff other parish the RiskManagement,Real Estate,of areas Facilities the of is team dedicated of callprofessionals businesson and pastors, to assist managers ministries various are committed We first cultureto and service a foremost Center. of the Pastoral at Our and entities related our for Archdiocese. place meeting preferred the a become of fast also has Center Pastoral towns The collaboration. and communication and better with citiesfulfilled be to mission 144 that enables Center the Pastoral Catholic The Boston.” within the of Archdiocese guide agencies and and serve hospitals, “to is schools, Seán, parishes, Cardinal by determined as mission, Our their bring as income. rental such will that plan a revenue, recurring develop of sources alternative develop or to income their with line in parishesexpenses these with working operations. ongoing begun fund have to We proceeds sale estate real of million $7.5 spent parishes years 2003 the During coverexpenses. parish does not offertory weekly their and areas urban in located are parishes these of Most sales. property one-time from operations ongoing funding been have parishes forty-five that observed have we are years parishes recent In expenses. all operating their cover not to parishioners from enough year, collecting last from increased are collections parish combined While in increases to due primarily 8%, up repairsmaintenance and clergy and were stipends. Expenses million. $13 of sales property in increase an to due primarily million, year.$20 over just prior or 11%, increased the revenues Total from 4% up 2008, in collections offertory in increase an experience to continued cemeteries) and schools parish including (not parishes Archdiocese’s The P ARISHES

– 2008 these2008

 www.bostoncatholic.org Page 7 Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report · Financial 2008 responsibilities operational for needed be will staff previouslyby clergy religious. handled or lay more as payrolls increased for plan to need will parishes forward, pastoralGoing all. other of benefit the and to shared be parishes, can roles multiple Well- serve to able possible. are whenever managers costs business and qualified staff sharing that and critical is collaborating it planning, begin S. pastoral parishes of Thomas focus Rev. the not Very are the finances by parish While led the is Foley. under which Planning Leadership, and Pastoral Life of Parish Office of Secretary the established has Seán this Cardinal For purpose, resources. available our of use best the make to need the highlight service, time full for available priests of number declining the with alongconcerns, financial Our o erlmns n hg dfct. hs calne ae ot vdn i or urban our in evident most are challenges These While deficits. high and enrollments $5,500. low is student per with schools many still are there cost helpful, been has aid Catholic financial average other and scholarships our the in but tuition average $4,000 The is schools cost. studentelementary per the cover not do that tuitions Some concern. and students toofew of factors: two of because primarilyrisk” area “at considered are schools an be to continue schools parish our of many yet structures school several regional of establishment the recentlyin made been has progress Much management and support, fundraising success. leadership, achieving theare that schools at factor key a is to board local the of strength providing The expertise. grateful also Archdiocese, are We the education. throughout Catholic schools Catholic various of boards the on serve who quality persons lay countless Schools seek parents Catholic who to hope students the given have and individuals and These dedication. their Driscoll, and support Kathleen their for and Fish, John them to greatly areindebted Michaeland Reardon. We Peter Lynch by led Foundation Connors, Jack by led Schools Catholic for Campaign the of support the with blessed is Archdiocese The and faith in formation excellence, stability.and values, financial academic team: her by developed priorities three the on builds that schools our for plan year five a develop to effort the leading is 2008, Grassa- Mary Dr. Education of Secretary all total, In level. providing school educate approximately 45,000students. high of the parish, a with at associated not those mission including 1,250 Archdiocese, the within and schools Catholic the level elementary to the at committed students remain 22,960 parishes educating are schools Catholic our year, This education. Catholic in excellence and Archdiocese The P C ASTORAL ATHOLIC P E LANNING DUCATION

O’Neill, who joined the Archdiocese in July of of July in Archdiocese the joined who O’Neill,

 www.bostoncatholic.org Page 8 Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report · Financial 2008 the keeping are we environment, the campaign 2009goal for Catholic Appeal $15 the sameyear. at million, level last as economic current the of recognition In donations. to grateful very this generous with all Ministries Central our and areSeán for Cardinal of work the We support who commended those year. be past to the of are turmoil parishes, financial the in given effort achievement Appeal the lead who pastors and team, his and Landry Scot Advancement Institutional of Secretary $100,000. by goal itssurpassing2008, in million $15.1 contributionsof receivedtotal Appeal Catholic The an for system improved of funding centralministries will that recommendations support of pastors. have the the us provide will they that confident am I the into year. continue fiscal willnext and 2008 October in earnest in work its the begansuccesses. Committeeother’s theThis in throughout share can each that so pastors budgets, parish to budgets ministry with central link will working that system beneficial mutually a develop to working is is committee The ministries. central with inadequate, collaboration financial of model who new system Financial a pastors develop of to Archdiocese input Improved current the to the response the in formed is Committee, found year This past Cabinet. the of the of members four and leaders, lay three initiatives pastors, five of up made Committee, Relationship encouraging the Among our of many Nevertheless, schools. continue to thriveschools ofthe economy. spite in high parish our at 9% and schools elementary 2009 the For schools. our on impact an having is downturn economic the unexpectedly, Not Boston South community and will leaders, with studentsenrolled. 400 almost open new the September, In parish of vision the through schools hold. parish former two from created Academy, taking Catholic this of signs seeing are Archdiocese, the we in and education Catholic for models premier in the Academy become Catholic will Trinity Brockton and Dorchester in Academy Catholic II Paul John Pope that hope our is It greater. been never has schools our of regionalization for need The this of year.academic conclusion the at close will they that announced have schools elementary five 2009, of April Through facilities. renovated or new in students 1,400 serving now and sites school parish former the of five at housed Academy, Catholic II Paul John Pope Seven system. overall the theof creation the withconjunction in Mattapan and Dorchester in strengthening closed were schools at aimed closings strategic were majority the 2008, in wereschools closed parish nine Though issues. these address to order in education Catholic for model new a implement to begun now have we where schools, C I MPROVED ATHOLIC – 2010 school year we are forecasting an enrollment decline of 4% at our parish our at 4% of decline enrollment an forecasting are we year school 2010 A F INANCIAL PPEAL

R ELATIONSHIP C OMMITTEE

 www.bostoncatholic.org Page 9 Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report · Financial 2008 u Ivsmn Cmite et mnhy n w ae oioig u portfolio our monitoring are we and monthly meets toaggressively income. preserveand capital order in generate Committee Investment companies. Our financial related and market mortgage sub-prime the our to to due exposure portfolios limited other the many than as less again 2009 15.8%, down year were investments year fiscal fiscal our the of in half first losses the For minimize turmoil. significant experience to to continue diligently markets working are We indexes. of market major loss the of a losses greater with much the avoided 2008 have to 30, pleased were June we 6.4%, ending year fiscal the closed investments our Though Rev. and Gerard Carlson, Petringa, the Very Rev.Foley.Thomas George Msgr. SGM, Ketterer, June Sr. Conway, Ker Jill Ms. Jr., Quigley, Kenneth the Mr. with assist Kaneb, A. John to Mr. include: will Trustees trustees The of plan. the of Board oversight and management Fund Clergy a formed also has Seán Cardinal    plan: making are we Fortunately, 2011. thestabilize to order in changes important following the in implementing in progress rapid significant cash of most out run and would operated liability and currently as structured largest continued if and our under-funded million be $114 is plan to the concern; continues financial plan pension clergy The status.funded 100% achieve to plan the re-evaluating of process the in are We 2008. 30, June of as their 90% at funded was 2007, 30, June of as withfunded fully was which fund, pension lay The them provide to commitment important the pensions. retirement including ways of a in service number their honor We Christ. of name the in others of service the to lives, their clergy, of case the in and years, working many dedicated who people lay and clergy of service and commitment the honor to designed were plans pension Our challenges. financial than more much as challenges these address to responsibilities our clergy consider and lay our in significant most decline. market general the byWe diminished been haveof which both funds, pension is performance investment our of impact The P I NVESTMENT ENSION A business plan to achieve a break-even year 2011 plan to business budgetby achieveA fiscal break-even a major a and event, fundraising campaign; gifts annual an collections, Easter and Christmas the increase to seeking collection, annual third a including revenues, increase to Plans restructuring expenses significant clergyA charged of to funds; F UNDS P

ERFORMANCE

.

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 10 · Financial 2008 Chancellor Chancellor McDonough P. James Sincerely yours inChrist, goals. our achieve and face we challenges the meet will we Christ Jesus of ministry saving the advance tocommitment shared our of strength the With towns. and cities 144 our in Catholics million 2 to close to provided ministries the of breadth the for appreciation immense an the me given has of parishioners lay and religious, clergy, faith employees, Ministries Central with the by Working Church. the motivated of mission the deeply to dedication been their and Archdiocese have our of people I Chancellor, as years three my In     assistance and administrativesupport to our team, management including: significant offer that and faithfully so serve that those to out go thanks my addition, In thevarious challengesthrough of each day us isan example for all. us leading Hisgracewe in that facing. realities are the financial understanding great of a with manner pastoral caring, a in Vicar Ministries Central our and Ph.D., Archdiocese the in leading Seán Erikson, Cardinal assist Richard to efforts Fr. untiring his offor Curia, the efforts of Moderator the and General of appreciative most am I support. and inspiration leadership, his for Seán Cardinal to thanks personal my offer to want I accomplishments, those on build alwaysto adjustour reflect plansrealitiestime. prepared to ofour the will and years recent in progress great made have our of future. rebuilding welaity and clergy, religious ofcommitment the dedication and the Through Archdiocese. our continue to about resolve the optimistic and be leadership the to with blessed continue are We I great, are ahead challenges the While C ONCLUSION The many pastors who have unselfishly offered their advice, counsel, and time. whoThe pastors many unselfishly have their counsel, offered advice, time. and the of Members Improved RelationshipCommittee; Financial Council Archdiocesan Finance its and The committees; theCardinal’s of Members Cabinet;

 www.bostoncatholic.org

The Roman Catholic Archbishop of Boston, A Corporation Sole Fiscal Year ended June 30, 2008

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the financial statements, supplemental schedules and report of independent certified public accountants contained in Item 4 of this financial report.

INTRODUCTION

The Roman Catholic Archbishop of Boston, A Corporation Sole (the “Corporation Sole”) is a legal entity created under civil law in 1897 to provide the Roman Catholic Archbishop of Boston with a means to operate within the public statutes of the Commonwealth of Massachusetts. The Corporation Sole, as an entity, is distinguishable from the Roman Catholic Archbishop of Boston whose powers and responsibilities are established by Canon Law.

The financial statements of the Corporation Sole are grouped into four reporting units: the activities of all parishes located within the Archdiocese (“Parishes”), the central administrative activities and programs of the Archdiocese (“Central Operations”), central endowments (“Endowments”) and the Archdiocese self-insurance programs (“Self-Insurance”). The Parishes include the 292 parishes of the Archdiocese and the 84 schools and 42 cemeteries operated by these parishes. Included within Central Operations are the assets and activities of the parish reconfiguration program that commenced in 2004.

The Archbishop of Boston, by virtue of his office, serves as chairman of the board of numerous separately incorporated Catholic organizations that operate within the Archdiocese of Boston. While these organizations are considered to be related organizations of the Corporation Sole, they are not under the control of the Corporation Sole and, accordingly, their financial activities are not presented as part of the

Page 11 · 2008 Financial Report for the Archdiocese of Boston Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 12 · Financial 2008 an early retirement program as part of a restructuring plan during the fiscal year that year the fiscal accounted majorityfor theincreasein management and general expenses. of the during plan restructuring a of part as program retirement early an implementedincrease. Central Operations 5% a expenses experienced while program challengesignificant and shortfall. a are efforts this underway address to to continues and periods prior provide counseling affected by servicesindividuals clergyto misconduct. in claims misconduct sexual brought who individuals suppressed parishes have sold. been domesticvolatility the international and in financial markets. to due decreased has value fair the year-end fiscal to subsequent although year, fiscal toin Center and the programs wereoffices JunePastoral relocated of 2008. central The price. purchase the funded contribution donor A Center. Pastoral new the a from repaid was campus administrative the of portion thesale.proceeds of the on mortgage The College. Boston to oprto Sl’ fnnil ttmns Te iaca saeet o te related the of statements report.this financial of 7 Item in financial included are Boston of The Archdiocese the within operate that organizations statements. financial Sole’s Corporation

E XECUTIVE year, fiscal the during decrease 1% a experienced revenue operating Unrestricted be to continues obligations postretirement other and pension clergy of funding The thirty-three 55 with year fiscal with the during agreements settlement into entered Archdiocese associated The buildings and land the 2008, 30, June Through the during stable relatively was Sole Corporation the of investments of value The into converted was that Braintree in building office an purchased Archdiocese The Brighton in campus administrative remaining its sold Archdiocese the 2007 July In

SUMMARY

 www.bostoncatholic.org June 30, 2008 Condensed Statement of Financial Position (000's)

Central Self Elimina- Parishes Endowments Total Operations Insurance tions

Assets

Land, Buildings & Equipment $355,485 $ 40,957 $ - $ - $ - $396,443

Cash 140,482 74,127 6,350 268 (8,898) 212,329

Investments 65,430 8,943 4,531 14,404 - 93,307

Other Assets 20,101 23,472 3,355 146 (1,898) 45,176

Total Assets $581,498 $147,499 $14,236 $14,818 $(10,796) $747,255

Liabilities

Accrued Clergy Retirement $114,483 $ - $ - $ - $ - $114,483

Due to Related Organizations 15,317 47,475 - - (10,714) 52,078

Other liabilities 35,580 14,199 294 - (2,994) 47,079

Reserve for Losses - 10,066 3,625 - - 13,691

Total Liabilities 165,380 71,740 3,919 - (13,708) 227,331 www.bostoncatholic.org 

Net Assets

Unrestricted 396,318 52,498 10,317 - 2,911 462,045

Restricted 19,800 23,261 - 14,818 - 57,879

Total Net Assets 416,118 75,759 10,317 14,818 2,911 519,924

Total Liabilities and Net Assets $581,498 $147,499 $ 14,236 $ 14,818 $(10,796) $747,255

Page 13 · 2008 Financial Report for the Archdiocese of Boston Unrestricted Net Assets Analysis (000's)

Central Parish Self Parishes Eliminations Total Operations Reconfiguration Insurance

Investment in land, $354,172 $ 31,872 - - - $386,045 buildings, equipment

Other 31,550 274 - - $ 2,912 34,736

Designated for parish - - $ 20,352 - - 20,352 reconfiguration

Cemetery future care 10,595 - - - - 10,595

Designated for self - - - $ 10,317 - 10,317 insurance programs www.bostoncatholic.org www.bostoncatholic.org

Total Unrestricted Net  $396,317 $ 32,146 $ 20,352 $ 10,317 $ 2,912 $462,045 Assets

Page 14 · 2008 Financial Report for the Archdiocese of Boston June 30, 2008 Condensed Statement of Activities - Unrestricted (000's)

Central Self Parishes Endowments Eliminations Total Operations Insurance

Operating Revenues

Collections $117,972 $ 16,144 $ - $ - $ (433) $133,683

Tuition 103,925 - - - - 103,925

Other 56,673 13,381 5,006 626 (7,605) 68,081 Contributions & 37,205 2,563 - - (469) 39,299 Fundraising Total Operating 315,775 32,088 5,006 626 (8,507) 344,988 Revenues Operating Expenses

Program 310,440 19,265 - (626) (7,261) 321,818 Management and 848 17,679 6,026 - (5,751) 18,802 General Fundraising 7,566 3,000 - - - 10,566

Reconfiguration - 1,502 - - (124) 1,378 Total Operating 318,854 41,446 6,026 (626) (13,136) 352,564 Expenses

www.bostoncatholic.org www.bostoncatholic.org

Operating Income/  (3,079) (9,358) (1,020) - 4,629 (8,828) (Loss)

Non-Operating

Income/(Loss) Gain on Sale of Land, Bldg & - 22,680 16,638 - - - 39,318 Equip Contributions - 25,750 - - - 25,750

Other 3,809 (145) (2,683) - (5,118) (4,137) Total Non- 26,489 42,243 (2,683) - (5,118) 60,931 Operating

Change in Net Assets $ 23,410 $ 32,885 $ (3,703) $ - $ (489) $ 52,103

Page 15 · 2008 Financial Report for the Archdiocese of Boston Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 16 · Financial 2008 C J eevbe ad aals o oprto Sl’ ohr conig nt ad related and units accounting other organizations. Sole’s of timing Corporation of result to the payables is 2007 and 30, receivables June to compared as 2008 30, June at decrease self Archdiocese’s the of to partially theby for Center. offset expenditures new Pastoral compared as 2008 donors, outside 30, from contributions restricted of million $5.8 and College Boston to sale June at increase significant campus Brighton the proceeds from net of million $34.8 the from results 2007 30, June The Archdiocese. the by increase theRevolvingan of longer Fund’s Loan June result of at ispartially30, 2008. decrease 2007 $77.2This 30, the million to June established atmillion $82.2 is from year, fiscal last duringthe 6% by equivalentsdecreased cash and that rate interest an incur loans cash Fund RevolvingLoan The borrowings rate. prevailingborrowing Sole’s Corporation following long-term These and credit fund. of this lines from short-term borrow of need in organizations related and and Fund Loan Revolving Parishes year. the during rates the market comparable to equivalentrate interest an earn into savings deposit Parishes organizations. related parishes. those June $61.5 millionto at 2007, 30, illustrating slightly position. a cash improved by operated cemeteries compared as and 2008 30, June at million $63.3 to 3% by increased cash operating schools Parish related the and parishes our

UNE ASH Insurance operations cash and cash equivalents represent the operating accounts operating the represent equivalents cash and cash operations Insurance centrally controlled monies equivalentsrepresent cash and cash Operations Central and parishes our for program loan cooperative a is Fund Loan Revolving The of accounts operating daily the represent equivalents and cash operations Parish ANDC 30, 2008 F 2008 30, ASH E QUIVALENTS INANCIAL isrne rgas Te aoiy f h $. million $4.9 the of majority The programs. -insurance : : P OSITION

-term investments. investments. -term

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 17 · Financial 2008 be paid upon satisfaction of two conditions, one of which was satisfied in July 2008 2008 July in satisfied was which is the and second satisfiedexpected to be in the future. of one conditions, two of satisfaction upon paid be to is million $4.0 the agreement, sale the with accordance In 2008. fiscal in occurred that sale campus Brighton the of part as College Boston from receivable million $4.0 a receivable are contributed in support of parish operations. in contributed parishare support receivable of operations. estates were and wills the that of All estates date. that and of as willspaid not but in 2008 30, June increase of as an probated of result a is 2007 30, June to compared its duringpaid on behalf 2008. fiscal Sole Corporation expenses operating organization,for related a Inc., Schools, Catholic central Foundation Catholic The the by due toand Corporation Sole. collected contributions of 2007, Appeal and Catholic 2008 support 30, of the June respectively, at $892,000 in and $994,000 for are parishes organizations related from Appeal Archdiocesan Catholic and due amount the in Included Archdiocese. the of programs and activities administrative mailings the direct manages through organization, Foundation Catholic The by campaign annual an related is Appeal Catholic The Archdiocese. a Foundation”), P D C REPAID UE ONTRIBUTIONS

relates to 2007 30, June to compared as 2008 30, June at increase million $4.2 The The increase in contributions receivable of $4.4 million or 159% at June 30, 2008 as2008 June 30, at 159% or million $4.4 of receivable contributions in increase The for Fund The from due $873,000 includes additionally balance the 2008 30, June At Catholic (“The Inc. Boston, of Archdiocese the of Foundation Catholic The FROM E R XPENSES ELATED R ECEIVABLE AND O RGANIZATIONS O THER

A SSETS

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 18 · Financial 2008 School and MatignonSchool organizations.High related both School, High Archbishop Williams to made newloans to relates 2008 2007 30, June to compared 30, as June at 65% or million $3.4 of increase The organizations. related to Fund campus to in July 2007. to Boston Julycampus College in 2007. June L L AND OANS Loan Revolving the by made loans short-term are receivable loans of majority The at 84% or million $8.7 of sale for held buildings and land in decrease The 76% 30, R 20 a cmae t Jn 3, 07 s u t te ae f h Brighton the of sale the to due is 2007 30, June to compared as 2008 ECEIVABLE B UILDINGS

H ELD FOR S ALE 24%

Parish Reconfiguration Parish CentralOperations

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 19 · Financial 2008 10% olpe ro t Jn 3, 08 Ta big ad or netet hv be and been mortgage have investments sub-prime our said, the being to That to be subject volatilitycontinue domesticto international the and in and fixed income exposure 2008. little 30, June very to had prior collapse Archdiocese The year. prior the in gain million $6.0 a to compared 2008 30, June ended year the for million $6.6 of loss unrealized and realized net a had Sole Corporation prioryear. the in million $13.3 compared June as Investment income to 30, 2007. 14% was to compared $11.4 million corporate and entities. securities securities asset-backed fixed-income investment private and funds mutual and securities, through indirectly or directly, either owned bonds) equity agency primarily and are Government (U.S. which of investments underlying the “Partnership”), (the Boston of Archbishop Catholic Roman Partnership, Investment investment common in Corporation whichSole pool and other the organizations Catholic may participate. a provide to established organizations related are Income Both “Fixed (the Fund”). Boston of Archbishop Catholic Roman Fund, Investment Income Fixed the and Fund”) Investment “Common (the Boston of Archbishop Catholic Roman I NVESTMENTS 5% For the year ended June 30, 2008, investment holdings increased $11.4 million or or million $11.4 increased holdings investment 2008, 30, June ended year the For Collective the in funds its of all nearly invests Fund Investment Common The Fund, Investment Common the in holdings are investments our of majority The 15%

70% Endowments Self-Insurance CentralOperations Parishes

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 20 · Financial 2008 n neet n e ast o a onain Te 16 ilo o 1% nrae at increase 13% or million $1.6 The the Foundation benefitreceived of byfor Operations. the Central foundation. a of assets June net in interest as recorded is an interest beneficial our of value The Foundation. Catholic The by held reflect not does 2008 30, after any events date. market such June of as position financial of statement the in investments presented of value The Corporation 18%. of approximately value by fair decreased the has 2009 investments 31, Sole’s March to 2008 1, July From markets. equity I NTEREST 3% assets and pledges of beneficiaries designated the of one is Sole Corporation The 30, 14% 20 cmae t te ro ya i picply eae t contributions to related principally is year prior the to compared 2008

IN N A ET 0% SSETS OF A Investments 83% F OUNDATION

Assets heldunder split-interest Assets Short-termInvestments Income FundFixed CommonInvestment Fund

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 21 · Financial 2008 ue 0 20 a cmae t Jn 3, 07 s rmrl de o n nrae in increase an to due primarily is 2007 30, June to compared as 2008 30, June this as building of Center the the Pastoral of Archdiocese. use the equipmentfor and furniture in million $3.4 and improvements building in million $4.3 invested Sole Corporation the 2008, 30, June Through price. purchase entire the the to allocated was funded gift donor A respectively. million, $15.7 price and million $10.1 building, the and land purchase million $25.8 The Braintree. in located building and equipmentwasfurniture fully depreciated. the of all Substantially million. $16.5 of cost original an with equipment and furniture of by owned property the of entity.each amountallocatedThe John’s to St. Seminary wasmillion. $45.6 value appraised relative their the upon in based received Seminary were John’s which proceeds, sales St. and Sole Corporation the The between allocated were Sole, Corporation the by entirety million. $65.0 for acres 18.7 of campus Brighton remaining the sell to College Boston with agreement an into entered L A AND, B CCOUNTS The increase in accounts payable and accrued expenses of $4.4 million or 34% at 34% or million $4.4 of expenses accrued and payable accounts in increase The office square-foot 150,000 a purchased Sole Corporation the 2007, November In disposed Sole Corporation the campus, Brighton the of sale the with connection In organization, related a Seminary, John’s St. and Sole Corporation the 2007, July In UILDINGS P 9% AYABLE AND 1% AND E QUIPMENT A 90% CCRUED E XPENSES

Parish Reconfiguration Parish CentralOperations Parishes

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 22 · Financial 2008 eitd o h seiid raiain Te 5000 r 6 ices at increase 66% or $550,000 The organization. and to distributions receipts beneficiaries. are specified funds the as the June time such to until obligations agency remitted as reflected are but revenue, collection as recorded not are collections special These Sole. Corporation of outside expensed being is required individuals over the service future period. and million The $3.5 was benefit Sole termination employees. one-time Corporation Operations the of Central the cost total certain 2008, to 30, program early June retirement the early ended to an year related offered million the $1.9 During new of the accrual program. to the retirement and relating million fixtures $3.1 and of Center furniture Pastoral and improvements building for payables St. St. organizations related amounts on deposit had theRevolving in Fund. Loan related a to provided funding is not accounted throughfor losses. thereserve for funding for This services. prevention abuse and educational respectively, other and misconduct clergy million, $2.0 by affected individuals to services counseling providing of purpose the for organization and million $2.8 for claims misconduct sexual brought had who individuals approximately million. $5.5 55 with agreements not paid. but incurred losses self-insurance related non-abuse other for million $3.6 and claims of settlements Sole ofmisconduct clergysettlement the future future for million $10.0 of balance the components, of Corporation cost the estimated the 2005, two of comprised is 30,2008 June at losses reserve for The for claims. misconduct clergy 30, June reserve million ended $25.0 year a established the During claims. misconduct R A D ESERVE GENCY UE organizations beneficiary for collections special Parish represent obligations Agency n diin a Jn 3, 08 $56 ilo o te ah rces loae to allocated proceeds cash the of million $45.6 2008, 30, June at addition, In represent respectively, million, $1.8 and million $6.6 2007, and 2008 30, June At expensed Sole Corporation the 2007, and 2008 30, June ended years the During settlement into entered Sole Corporation the 2008, 30, June ended year the During clergy on loss of risk the for self-insured substantially is Sole Corporation The John’s Seminary from the Brighton campus sale was included in the amount due to due amount the in included was sale campus Brighton the from Seminary John’s TO 30, R O 20 a cmae t pir er s rm h tmn o seil collection special of timing the from is year prior to compared as 2008

FOR ELATED BLIGATIONS L OSSES O RGANIZATIONS

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 23 · Financial 2008 eae ognztos I Dcme 20, h Croain oe n S. John’s million $9.2 of balance St. St. John’s subsequentto was due to 30,Seminary June repaid 2008. The Seminary. and John’s St. to due Sole amount the of Corporation million $36.4 the 2008, December for note promissory bearing non-interest 10-year subordinated a into entered Seminary In organizations. related currently retired clergy and active clergy after retirement. This obligation is unfunded. currently clergy active retired and clergyobligationThis retirement. isunfunded. after of behalf on or to paid be to expected are that benefits subsistence and dental health, “ClergyPlan”).Disability (the Retirement Plan Retirement/ Clergy Boston of Archdiocese the through provided are Benefits Boston. of Archdiocese the in incardinated are who clergy covering plan disability and pension with consistent ofyear. that the prior is balance The year. academic following the for 30 June to prior schools parish the by D A EFERRED CCRUED

including benefits, post-retirement other offers also Plan Retirement Clergy The benefit defined noncontributory, single-employer, a sponsors Sole Corporation The received deposits tuition represents support and revenue deferred of majority The P 87% R ENSION EVENUE Due to Related Organizationsto Related Due AND AND O S THER UPPORT 13% P OST

-R ETIREMENT

C OSTS St John's SeminarySt RevolvingLoan fund

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 24 · Financial 2008 to June 30, 2007 relates to the repayment of the Central Operations mortgage note. mortgage Operations Central in was note This August 2007 repaid the from the proceeds of Brighton campus sale. the of repayment the to relates 2007 30, June to the on return overall the decreased $436,000 the also accrued in from amount year. the prior note the Because on interest accrued the 2008, fiscal in Fund. loss a was Fund Investment Investment Common Common the of return total average annual the to equivalent rate a at note the on compounds Interest Seminary. retirement clergy controlling on focusing financial currently largest increasing and expenses into the is contributions plan. Sole’s Archdiocese Corporation The be to obligation. continues obligation obligation, to payments This benefit by offset projected assets plan the beneficiaries. of value in fair the increase in decline an a and to interest imputed due year as 4% prior or million the $4.9 to by increased compared accrual This status. funded 29% a of excess assets, in plan obligations benefit clergy of value present the represents million $114.5 O N OTE THER comparedas 2008 30, June at payable notes other in million $26.2 of decrease The John’s St. with note million $4.9 a into entered Sole Corporation The 2005, April In of costs retirement post other and pension accrued the 2008 30, June At 71% P Accrued Pension and Post other Costs Retirement N AYABLE OTES P –R AYABLE ELATED O RGANIZATION 29%

Accrued Cost Accrued FundedStatus

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 25 · Financial 2008 Central Operations.Central for recorded million to wills $5.9 ofsupport the from for is that million $1.8 of distributions trust a in of interest beneficial new of a and parishes year result the during the increase an primarily to addition is in wills 2007 probated 30, June to compared as Appeal 2008 the date, launch its in change the of impact increase experiencedcampaign 3% compared the a as to campaign. 2007 the fiscal previous the Excluding to compared as 2008 year. in increase million $2.1 the of majority the the of launch The for accounted which 2007 in launch May a parishes. vs. 1 March to up our moved was Appeal 2008 to is offertory weekly the to what is Appeal Operations Catholic Central The schools. and parishes for and services many programs including ministries, offices, 50 over finances which Operations, Central Archdiocese’s June yearmillion the fiscal ended 2008,for 30, which is consistent year. withprior the Plan Retirement Clergy the $5.4 to amounted collections for special These funding contributions. direct infrequent of than other source major the is This benefits. clergy an year, prior the to compared as 5% or million continuedencouraging recovery sign of the parishesofthe Archdiocese. for $5.7 by increased collections day- their support that O C C C C F ONTRIBUTIONS ATHOLIC OLLECTIONS OLLECTIONS ISCAL PERATING 2008 30, atJune million $11.5 of bequestsand grants contributions, in increase The the for resources the of majority the provide Appeal Catholic the to Gifts of support the for collections special Easter and Christmas the of sum the is This parishes 292 our by received contributions weekly of sum the represent Collections YEAR A PPEAL C –

ACTIVITIES , BEQUESTS ANDGRANTS E LERGY

NDED to B -day operations. During the fiscal year ended June 30, 2008 30, June ended year fiscal the During operations. -day ENEFITS J UNE

30, 2008 R 2008 30,

ESULTS

OF

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 26 · Financial 2008 2008 year end parish consolidation process. year endparish2008 consolidation process. the in occurred that classification account in refinements to due mostly was year prior theto compared as 2008 30, June ended year the for decrease 14% The level. parish reinsurance and losses coveragemaintain excessfor losses. initial for self-insured are programs self-insurance The mitigation. risk and training as well as management, litigation and claims services, management risk and control loss related insurance, protection: of the lines all includes and program self-insurance the (parishes The within Archdiocese). organizations parishes, (related institutions groups: and Sole) Corporation major of self-insurance units two The operating year. to prior provided the to are compared as programs million $1 programs. of self-insurance million increase $1.4 an of our 2008 reflect 30, June in ended year participate fiscal the that for received revenues Boston Insurance of Archdiocese the within of realignment a of and control byreimbursements provided therelated organizationsutilize that services. these cost improved amount in resulted which thorough performed The A was support. review Operations Central million for $6.1 charges decrease of provided. to decision 2008 conscious 30, a services of result a is June decrease This year. prior ended from the to compared 16% year of decrease a reflects fiscal revenue the for as received reimbursements recorded these are for Reimbursements services Boston. of Archdiocese the within organizations related O I R R NSURANCE EVENUE THER the at principally sources, revenue different of variety a combines revenue Other organizations related from premiums self-insurance represent revenues Insurance to services clerical and technology administrative, provide Operations Central R EVENUE

FROM EVENUES S

ERVICES

P ROVIDED

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 27 · Financial 2008 retirement program offered to certain Central Operations employees. program offeredretirement to certainCentral employees. Operations early the with these connection in benefits of of payout the to relates 2008 all fiscal for expenses Substantially general and the management year. in by increase the of paid prior majority The claims operations. and the Self-Insurance Administration Central to Archdiocesan the compared to as relate expenses 2008 30, June ended in priest remuneration priest in utilityand at our costs parishes. increase an were expense pastoral in increases major The programs. pastoral related and parishes the of operations the on focused and parishes the within was programs increasedin this investment theprior 2008 to year. 30,compared June as of All ended P M ROGRAM ANAGEMENT aaeet n Gnrl xess nrae $. mlin r 1 fr h year the for 21% or million $3.3 increased Expenses General and Management year the for 5% or million $14.4 increased programs Archdiocesan on Spending E XPENSES ANDG

ENERAL E XPENSES

Cemetery Auxiliaryservices Communityrelations services Regional and Central Social Ministerial Education Pastoral

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 28 · Financial 2008 remained consistent over the two fiscal years, and (2) an increase in the number of number the in has increase an parishes undertaking campaigns. fundraising Foundation (2) and Catholic years, fiscal the two the of over consistent budget remained operating the the overall, of budget Foundation; operating the Catholic of portion a provided fundraising private 2007, 30, June Appeal Catholic the year thefiscal ended in Archdiocese for their efforts the of coordination fundraising and of administration their for Foundation Catholic The to support in increase toyear (1)an 2008 30,compared theprior wasas by factors: June driven two F E UNDRAISING

h ices o $. mlin r 0 i fnriig xess o te er ended year the for expenses fundraising in 30% or million $2.4 of increase The 28% 25% Management andExpenses General XPENSES 3% 72% 72%

SelfInsurance CentralOperations Parishes Central Operations Central Parishes

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 29 · Financial 2008 oetc n itrainl et n eut mres Fr h ya ended year the For markets. an had average realizedunrealized and loss 8.6%. of equity itwhere 2008 30, June ended and year the to comparedinvestments as on gain unrealized debt international June and domestic in downturn the of result a mostly is 2008 30, June ended year the for loss million $6.6 ofbuildingthe landand purchase Braintree. in June year was ended 30, 2008 a 23% decrease compared as to the year.prior the for expense million $1.4 The plan. reconfiguration 2004 the from properties parish oprto Sl’ sl o a oto o te diitaie aps n Brighton, in campus administrative the of portion a of specifically to CollegeTribunal the Boston Building, duringthat year.fiscal sale Sole’s Corporation Boston July Collegeto in 2007. campus administrative Brighton remaining the of portion its of sale Sole’s Corporation G N C RESULTS P ARISH ET R ONTRIBUTION AIN a to 2007 30, June ended year the for gain million $6.0 a from change The the for contribution restricted a as received was contribution million $25.8 The suppressed remaining the maintaining of cost the is expense reconfiguration Parish to relates 2007 30, June ended year the during recognized gain million $7.9 The to relates 2008 30, June ended year the during recognized gain million $11.8 The ON 30, EALIZED R THE 20, h Cmo Ivsmn Fn hd n vrg 1.% elzd and realized 11.1% average an had Fund Investment Common the 2007, ECONFIGURATION

OF S ANDU ALE

NON OF NREALIZED A -O DMINISTRATIVE C PERATING E XPENSES G AIN

(L ACTIVITIES OSS AMPUS

) ON P I ROPERTY NVESTMENTS

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 30 · Financial 2008 10mlin eoee drn te icl er ne Jn 3, 08 a te final settlements. coverageinsurance on clergy abuse the was 2008 30, remainingin thelimited receivedfrom million was insurance 2008 recovery $1.6 the fiscal included Also June Weymouth. in Parish ended Heart Sacred the year of rebuilding the for fiscal receipts the during recovered Approximately million $1.0 activities. self-insurance the by retained amounts of excess in losses h proe f rvdn cusln srie t idvdas fetd y clergy by affected individuals to services counseling providing and other misconduct andabuseeducational services. prevention of purpose the June gain a$1.5for of million. Operations Central by House Emmanuel the of sale the was last The million. $3.4 of gain a for properties reconfiguration parish four of buildings and land the of sale the is the being source first source second $22.7 a million. The gainof ninebuildingsof for parishes bysale active The sources. three from derived is 2008 30, June ended year G S I ANDO NSURANCE ETTLEMENT AIN for policies reinsurance on recovered amounts are recoveries other and Insurance ended year the in incurred expenses of million $3.2 the of majority The the during recognized buildings and land other of sale the on gain million $27.6 The ON 30, THE 2008 relates to $2.8 million of funding provided to a related organization for organization related a to provided funding of million $2.8 to relates 2008 ANDRELATED S ALE THER OF O R THER ECOVERIES EXPENSES L AND B

UILDINGS

 www.bostoncatholic.org Page Page

· 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 31 · Financial 2008 Permanentlyrestricted Temporarilyrestricted Unrestricted rnfre t Tiiy ahlc cdm Boko, n. a el fre related formed newly a Inc., Brockton, Academy Catholic organizationconsolidated that theoperations certainparish schools of Brockton. in Trinity to transferred the to funds reconfiguration parish from $643,886 Cemetery the Association theseas future care of funding cemeteries.for transferred the 2007, Sole December In Corporation $200,586. were transfer of date Family the on Holy cemeteries these the of from ownership of transfer assets net The process. reconfiguration parish the of part as MA the Gloucester, in Parish with cemeteries two of operations N N (000's) Total net assets Totalnet ET A ET A was million $2.5 process reconfiguration parish the of part as 2007 13, August On the for responsibility assumed Association Cemetery the 2007 1, October On SSET SSETS T

RANSFERS 416,118 396,318 Parishes 11,378

8,422 TO R ELATED Operations Central 75,759 14,118 52,498 9,143 O RGANIZATIONS

Insurance 10,317 10,317 Self Self - -

Endowments 14,818 2,640 2,178 - Eliminations 2,912 2,912 - - 519,924 462,045 30,206 27,673 Total

 www.bostoncatholic.org

Financial Statements, Supplement Schedules and Report of Independent Certified Public Accountants The Roman Catholic Archbishop of Boston, A Corporation Sole June 30, 2008 and 2007

Page 32 · 2008 Financial Report for the Archdiocese of Boston

Financial Statements, Supplemental Schedules and Report of Independent Certified Public Accountants

The Roman Catholic Archbishop of Boston, A Corporation Sole

June 30, 2008 and 2007

Page 33 · 2008 Financial Report for the Archdiocese of Boston

Contents

Page

Report of Independent Certified Public Accountants 3

Financial Statements

Statements of Financial Position 4

Statements of Activities 5

Statements of Cash Flows 7

Notes to Financial Statements 8

Supplemental Combining Information

Report of Independent Certified Public Accountants on Supplemental Information 30

Combining Statements of Financial Position 31

Combining Statements of Activities – Unrestricted 32

Combining Statements of Activities - Temporarily Restricted 33

Combining Statements of Activities – Permanently Restricted 34

Page 34 · 2008 Financial Report for the Archdiocese of Boston

Grant Thornton

Audit  Tax  Advisory Report of Independent Certified Public Accountants Grant Thornton LLP 175 W Jackson Boulevard, 20th Floor Chicago, IL 60604-2687 His Eminence T 312.856.0200 Cardinal Sean Patrick O’Malley, O.F.M. Cap. F 312 565 4719 The Roman Catholic Archbishop of Boston www.GrantThornton.com

We have audited the accompanying statements of financial position of The Roman Catholic Archbishop of Boston, A Corporation Sole (the “Corporation Sole”) as of June 30, 2008 and 2007, and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the Corporation Sole's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation Sole’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Roman Catholic Archbishop of Boston, A Corporation Sole as of June 30, 2008 and 2007, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed further in note H, on June 30, 2007, the Corporation Sole adopted Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)”.

Boston, Massachusetts March 17, 2009

Page 35 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statements of Financial Position June 30, 2008 and 2007

Page 36 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statements of Activities For the year ended June 30, 2008 (With summarized comparative information for the year ended June 30, 2007)

Page 37 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statements of Activities For the year ended June 30, 2007

Page 38 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statements of Cash Flows For the years ended June 30, 2008 and 2007

Page 39 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements June 30, 2008 and 2007

NOTE A - NATURE OF ORGANIZATION

The Roman Catholic Archbishop of Boston, A Corporation Sole (the “Corporation Sole”) is a legal entity created under Massachusetts civil law in 1897 to provide the Roman Catholic Archbishop of Boston with a means to operate within, and be governed by, the public statutes of the Commonwealth of Massachusetts. The Corporation Sole, as an entity, is distinguishable from the Roman Catholic Archbishop of Boston whose powers and responsibilities are established by Canon Law.

The accompanying financial statements of the Corporation Sole include the activities of all parishes located within the Archdiocese of Boston, the central operations (the corporate administrative activities and programs of the Corporation Sole), endowment and self-insurance.

The Archbishop of Boston, by virtue of his office, serves as chairman of the board of numerous separately incorporated Catholic organizations that operate within the Archdiocese of Boston. While these organizations are considered to be related organizations of the Corporation Sole, they are not under the control of the Corporation Sole and, accordingly, their financial activities are not presented as part of the accompanying financial statements.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Corporation Sole have been prepared on the accrual basis of accounting and in accordance with the reporting principles of not-for-profit accounting.

The Corporation Sole reports three classes of net assets and the changes in those net assets in the statements of financial position and statements of activities, respectively. The three classes of net assets - unrestricted, temporarily restricted and permanently restricted - are based on the existence or absence of donor-imposed restrictions, either explicit or implicit. The three classifications are defined as follows:

Unrestricted net assets - Assets and contributions that are not restricted by the donor or for which restrictions have expired.

Temporarily restricted net assets - Net assets subject to donor-imposed restrictions that permit the Corporation Sole to use or expend the donated assets as specified and that are satisfied by either the passage of time or by actions of the Corporation Sole.

Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Corporation Sole. Generally, the donors of these assets permit the Corporation Sole to use, all or in part, the income earned on related investments for general or specific purposes. Unexpended appreciation on permanently restricted net assets is included in temporarily restricted net assets.

The Corporation Sole reports gifts of cash and other assets as restricted support if there are donor restrictions as to purpose or time. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

8 Page 40 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

The Corporation Sole reports gifts of land, buildings and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, the Corporation Sole reports expirations of donor restrictions in the period the expenditure is made.

Cash Equivalents

Financial instruments with original maturities of three months or less at purchase are classified as cash equivalents. Included in cash equivalents are investments in money market mutual funds and certificates of deposits of $140.9 million and $128.5 million at June 30, 2008 and 2007, respectively.

The Corporation Sole deposits its cash in major financial institutions. These deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution through December 31, 2009 and $100,000 thereafter with respect to interest bearing accounts. Unlimited deposit insurance coverage is available through December 31, 2009 for non-interest bearing accounts at institutions participating in the FDIC’s temporary liquidity guarantee program. While at times, funds deposited in banks are in excess of FDIC insured limits, the Corporation Sole has not experienced any losses as a result of the use of uninsured deposit accounts.

Accounts and Loans Receivable

Accounts receivable include amounts due for tuition and amounts due from related organizations for insurance and other central services and are reduced by an allowance for doubtful collections. Loans receivable represent advances made to related organizations, principally Archdiocesan high schools and other Catholic organizations.

Loans receivable are stated at the amount of unpaid principal, reduced by an allowance for loan losses. Generally, loans are granted for specific periods of time and contain specific provisions for monthly payments. Loans are collateralized by certain assets of the related organization being granted the loan. Interest income on performing loans is accrued at rates ranging from 5.5% to 10% on the respective unpaid principal balance.

Loans are classified as nonperforming, and considered impaired, when they are over ninety days past due. Generally, loans are restored to performing status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectibility of the total contractual principal and interest is no longer in doubt.

Allowances for Loan Losses

The allowance for loan losses is maintained at a level believed by management to be representative of inherent losses estimated on the basis of factors such as the risk characteristics of the borrower, underlying collateral and current economic conditions that may affect the borrower’s ability to pay. Loans are written-off in whole or in part when, in management’s opinion, collectibility is considered remote. Subsequent recoveries, if any, are credited back to the allowance for loan losses.

While management uses available information to establish the allowance for loan losses, future additions or reductions to the allowance may become necessary if circumstances differ from the assumptions used in making the evaluation. 9 Page 41 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Investments

Investments are carried at fair value. Changes in fair values are reflected in the statements of activities as gains or losses on investments.

Included in investments are holdings in the Common Investment Fund, Roman Catholic Archbishop of Boston (the “Common Investment Fund”) and the Fixed Income Investment Fund, Roman Catholic Archbishop of Boston (the “Fixed Income Fund”). Both are separate related organizations established to provide a common investment pool in which the Corporation Sole and other Catholic organizations may participate. The participants own units based upon a per-unit value at the time of purchase. It is the policy of the Common Investment Fund to distribute to its members on a quarterly basis 1% of the net assets of the Fund as of the previous quarter-end. The policy of the Fixed Income Fund is to distribute all net investment income to its members on a quarterly basis on the last day of the same quarter. This dividend policy is subject to change at the discretion of the Trustee, the Roman Catholic Archbishop of Boston. The Common Investment Fund and the Fixed Income Fund incur service fees from the Corporation Sole for administrative and clerical services performed on their behalf.

The Common Investment Fund invests nearly all of its funds in the Collective Investment Partnership, Roman Catholic Archbishop of Boston (the “Partnership”), the underlying investments of which are primarily equity and fixed-income securities (U.S. Government and agency securities, asset-backed securities and corporate bonds) owned either directly, or indirectly through mutual funds and private investment entities.

The fair value of the Partnership’s investments in actively traded securities is determined by State Street Corporation which obtains bid price quotations from independent pricing services on most domestic securities. Investments in traded foreign securities are valued at the mean between bid and asked prices. For those securities whose prices are not available through independent pricing services, bid price quotations are obtained by State Street Corporation from principal market makers in those securities or at fair value as determined in good faith by its management. Investment holdings of private investment entities that are not actively traded are valued by the managers of these entities.

Also included in investments are mutual funds held under split-interest agreements. The funds were received as part of charitable gift annuities with the Corporation Sole having sole investment authority and are invested in balanced mutual funds (equity and fixed-income) at June 30, 2008 and 2007.

Interest in Net Assets of a Foundation

The Corporation Sole is a designated beneficiary in certain pledges and assets held by The Catholic Foundation of the Archdiocese of Boston, Inc. (“The Catholic Foundation”), a separate related organization (see Note L).

Land, Buildings and Equipment

Land and land improvements, buildings and building improvements, and furniture and equipment are carried at cost, or if donated, at fair market value at the time of donation. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets, which range from five years for furniture and equipment to forty years for buildings. Expenditures for maintenance and repairs are charged to expense, whereas major betterments are capitalized. 10 Page 42 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Land and buildings held for sale are accounted for at the lower of cost or market. When buildings are classified as held for sale, depreciation is no longer recorded.

Reserves for Losses

Self Insurance and Reinsurance The Corporation Sole is partially self-insured for various risks incidental to the normal course of its activities. Such risks include fire damage (up to $500,000 annually), general liability claims (up to $250,000 per occurrence), theft losses and sudden accidental occurrences to boilers and related equipment. In addition, the Corporation Sole participates with other Catholic organizations in a separate workers’ compensation self-insurance group, Massachusetts Catholic Self-Insurance Group, Inc., a related organization.

The Corporation Sole also permits related organizations within the Archdiocese to participate in its risk management program. A fee is assessed to these entities based on the type of risks shared among the related organizations. The typical risk areas that the other organizations of the Archdiocese participate in include automobile liability, physical property damage and general liability. The Corporation Sole also provides additional coverage for the peril of all fire, sudden and accidental occurrences, catastrophic umbrella liability and other miscellaneous coverage through the direct purchase of insurance. The Corporation Sole has retained additional carriers for its auto insurance and these carriers cover losses up to $1 million with additional catastrophic limits.

The reserve for insurance losses is based on losses reported, historical experience and estimates of future trends in loss severity and frequency and other factors, which could vary as losses are ultimately settled. In addition, the Corporation Sole retains an actuary to perform an independent analysis of loss trends. Although the Corporation Sole’s management believes that these estimates are reasonable in the circumstances, there is an absence of a significant amount of experience as to whether actual incurred losses and loss adjustment expenses will conform to the assumptions inherent in the determination of the liability. Accordingly, the ultimate settlement of losses and loss adjustment expenses may vary significantly from the estimated amounts included in the financial statements. The methods used to develop these reserves are subject to continuing review and refinement, and any necessary adjustments to these reserves are reflected in the statement of activities in the year identified.

Clergy Misconduct Claims The Corporation Sole estimates a reserve for settlement of reported misconduct claims and related litigation costs using average historical settlement amounts. An additional reserve is accrued using the same historical settlement data for incurred but not reported claims based on an independent analysis performed by an actuary.

Deferred Revenue and Support

Deferred revenue and support represents payments received for tuition, fees and support for program services to be provided in future periods.

Other Liabilities

Other liabilities represent amounts held on deposit for the benefit of other institutions, parish obligations, annuity obligations of split-interest agreements and miscellaneous other liabilities not classified elsewhere herein. 11 Page 43 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Conditional Asset Retirement Obligations

The liability for conditional asset retirement obligations represents an estimate for future obligations to perform certain retirement activities in connection with the ultimate disposition of tangible long-lived assets due to the nature of material used in their construction or operation. The timing of the performance of these retirement activities is within the control of the Corporation Sole and, due to the nature of these assets, will be performed over an extended period of time. The Corporation Sole is able to estimate its conditional asset retirement obligation for long-lived assets that are expected to undergo major renovations or have been identified for demolition. The Corporation Sole is not able to reasonably estimate its asset retirement obligation for numerous other long-lived assets as the range of time over which it may settle the obligation is unknown or cannot be estimated.

Included in other liabilities in the accompanying statements of financial position is $3.1 million at June 30, 2008 and 2007, representing management’s estimate of its future obligation for such long-lived asset retirement activities.

Collections

Collections represent contributions received by Archdiocesan parishes for general and specified purposes. These funds are raised for parish operations and other purposes such as hunger, homelessness, and other human welfare programs and are reported as revenue in the statement of activities. Collections at Archdiocesan parishes for specified beneficiary organizations are not recorded as revenues, but are reflected as agency obligations until such time as the funds are remitted to the specified organization.

Catholic Appeal

The Catholic Appeal represents an annual solicitation by The Catholic Foundation through direct mailings and Archdiocesan parishes in support of the central administrative activities and programs of the Archdiocese.

Contributions, Bequests and Grants

Unconditional promises to give are reported at fair value on the date the promise is verifiably committed. Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. The present value discount on these contributions is computed using a risk free interest rate applicable to the years in which the promises are received. Amortization of discounts is included in contributions revenue. Unconditional promises to give are reported as contributions receivable. Conditional promises to give are not included as support until the conditions are substantially met.

Rental Income

External parties and certain related organizations are charged rent for the use of property owned and operated by the Corporation Sole.

12 Page 44 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Revenue from Services Provided

The Corporation Sole provides various administrative, technology and clerical services to related Catholic organizations for which it charges fees. Such services include risk and benefits management, treasury and investment management, financial management, information technology and property management services. Fees and other revenue are also generated by pastoral and ministerial workshops and retreats, tribunal services and newspaper publications.

Other Revenues

Other revenue primarily represents income from various goods sold and services provided by the parishes and parish schools.

Future Care Funds

Under Massachusetts law, the Corporation Sole sets aside 30% of all proceeds from parish cemetery mausoleum sales into a future care fund included in permanently restricted net assets. With respect to parish cemetery plot sales, the Corporation Sole’s recommended guideline is for each parish to deposit 10% of all proceeds into a future care fund included in unrestricted net assets. This guideline is voluntary and each parish establishes its own policy.

Future care funds include only such funds for cemeteries operated under the Corporation Sole and do not include the future care funds of cemeteries within the geographic territory of the Archdiocese of Boston that are owned and operated by The Catholic Cemetery Association of the Archdiocese of Boston, Inc., (“Cemetery Association”), a separate related organization.

Split-Interest Agreements

Contribution revenue derived from charitable gift annuities is determined by comparing the fair value of the assets associated with the instrument to the present value of the amounts expected to be paid to beneficiaries under the arrangement. This process requires the use of life expectancy and other assumptions in determining the amount to record. When the Corporation Sole has control over the assets associated with the gift annuity, such assets and the liability associated with obligations under the instrument are recorded on a gross basis. If third parties control the assets associated with the gift annuity, only the net amount expected to be received is recorded.

Beneficiary in Wills and Estates

The Corporation Sole is named as a beneficiary in numerous wills and estates. The Corporation Sole deems these to be intentions to give and not unconditional promises to give. When a probate court declares an individual will is valid and the fair value of the estate can be estimated, the Corporation Sole recognizes contribution revenue and a receivable for its interest in the estate.

13 Page 45 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Income Taxes

The Corporation Sole is included in the United States Conference of Catholic Group Ruling and is therefore exempt from income tax under Section 501(c)(3) of the Internal Revenue Code. Accordingly, no provision for income taxes is included in these financial statements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant items presented herein affected by the use of estimates are the allowances for uncollectible loans and accounts receivable, the fair value of investments, depreciable lives of buildings and equipment, reserves for losses, the accrued pension and other post-retirement obligations, the functional allocation of expenses and the reserve for conditional asset retirement obligations. Actual results could vary from those estimates.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to current year presentations.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements. SFAS No. 157 defines fair values, establishes a framework for measuring fair value, and expands the disclosure requirements about fair value measurements. In February 2008, the FASB issued Staff Position No. FAS 157‑2 that defers the effective date of applying the provisions of SFAS No. 157 to the fair value measurement of nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. In October 2008, the FASB issued FASB Staff Position 157‑3, Determining Fair Value of a Financial Asset When the Market for That Asset Is Not Active (“FSP 157‑3”). This FSP clarifies the application of SFAS No. 157 in a market that is not active and is effective immediately. The Corporation Sole is required to adopt the provisions of SFAS No. 157 that pertain to financial assets and liabilities for the year ending June 30, 2009 and is currently evaluating the effect SFAS No. 157 will have on its financial position and changes in net assets.

In August 2008, the FASB issued Staff Position 117‑1 (FSP 117‑1), Endowments of Not-for-Profit Organizations: Net Asset Classifications of Funds Subject to an Enacted Version of the Uniform Prudent Management of Institutional Funds Act, and Enhanced Disclosures for All Endowment Funds. This FSP provides guidance on the net asset classification of donor-restricted endowment funds for organizations located in states that adopted as law Uniform Prudent Management Institutional Funds Act (the “UPMIFA Act”) (Massachusetts has currently not adopted the Act) and requires extensive new disclosures about an organization’s donor-restricted and board-designated endowment funds. Massachusetts law, enacted before FSP 117‑1, already requires substantially the same net asset classification and, accordingly, the Corporation Sole does not anticipate a significant change to its financial position or changes in net assets if Massachusetts adopts the UPMIFA Act. 14 Page 46 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE C - LOANS RECEIVABLE

Loans receivable consisted of the following at June 30 and are due from various Archdiocesan related organizations (primarily Archdiocesan Central High Schools, Inc.) ($000’s):

2008 2007

Performing loans receivable $ 9,151 $ 5,953 Nonperforming loans 68,695 69,178 77,846 75,131 Allowance for loan losses (69,183) (69,889)

Net loans receivable $ 8,663 $ 5,242

Changes in the allowance for loan losses were as follows for the years ended June 30 ($000’s):

2008 2007

Write-off balance at beginning of year $ 69,889 $ 69,724 Write-off of uncollectible loans (483) (57) Additional provision (credit) for loan losses (223) 222

Balance at end of year $ 69,183 $ 69,889

Nonperforming Loans

In prior years, the Corporation Sole issued non-interest bearing demand loans to the Archdiocesan Central High Schools, Inc. (ACHS), a related organization, to fund its operations. These loans are collateralized by the real estate of ACHS. Through June 30, 2004, ACHS’ Board of Trustees governed eight Catholic high schools located within the geographic boundaries of the Archdiocese of Boston. On July 1, 2004, ACHS transferred the governance and the personal property relating to the operations of each of these schools to eight newly formed related legal entities, one for each school with each having its own board of trustees. ACHS continues to own the real estate being used by the high schools and has entered into leases that expired on June 30, 2008 at a nominal annual rental with each of the newly formed legal entities. The Corporation Sole is currently in the process of finalizing the renewal of these leases which will provide for nominal annual rents.

No payments have been made on these loans for several years and the Corporation Sole has not demanded repayment. As a result, these loans were fully reserved in prior years as their ultimate collection was judged to be remote.

15 Page 47 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE D - INVESTMENTS

Investments consisted of the following at June 30 ($000’s):

2008 2007

Common Investment Fund $ 77,396 $ 64,205 Fixed Income Fund 2,936 3,601 Short-term investments (primarily certificates of deposit) 12,859 14,001 Assets held under split-interest agreements (mutual funds) 116 139

Total investments $ 93,307 $ 81,946

NOTE E - LAND, BUILDINGS AND EQUIPMENT

Land, buildings and equipment consisted of the following at June 30 ($000’s):

2008 2007

Land and land improvements $ 62,568 $ 53,121 Buildings and improvements 1,051,948 1,005,793 Furniture and equipment 67,466 78,266 Construction in progress - 6,760 1,181,982 1,143,940 Less accumulated depreciation (785,539) (802,982)

Land, buildings and equipment, net $ 396,443 $ 340,958

Land and buildings held for sale totaling $1.6 and $10.3 million at June 30, 2008 and 2007, respectively, are carried at cost, net of accumulated depreciation, which is less than estimated net realizable value.

In November 2007, the Corporation Sole purchased a 100% membership interest in a limited liability corporation whose sole assets were land and a 150,000 square foot building located in Braintree, Massachusetts. The $25.8 million purchase price was established by an independent appraisal of the property which allocated $10.1 million to the value of the land and $15.7 million to the value of the building. Subsequently, the limited liability corporation was dissolved and the assets were transferred to the Corporation Sole. A temporarily restricted donor gift funded the entire purchase price. Through June 30, 2008 the Corporation Sole invested $4.3 million in building improvements and $3.4 million in furniture and equipment for the use of this building as the Pastoral Center for the Archdiocese.

In connection with the sale of the Archdiocese’s administrative campus in July 2007 (see note L), the Corporation Sole disposed of furniture and equipment with a cost of $16.5 million, recognizing a loss of $16,000 for the remaining net book value of those assets.

16 Page 48 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE E - LAND, BUILDINGS AND EQUIPMENT - Continued

The Corporation Sole leases certain of its properties to unrelated third parties. At June 30, 2008, scheduled receipts under non-cancelable long-term rental agreements are as follows ($000’s):

Year ending

June 30,

2009 $ 8,872

2010 7,003

2011 5,079

2012 4,369

2013 3,295

NOTE F - NOTES PAYABLE

Note Payable - Related Organization

In April 2005, the Corporation Sole entered into a $4.9 million note payable to St. John’s Seminary, a related organization. The loan principal, together with interest accrued from the date of the note, is to be repaid on January 1, 2011. For the period from July 1, 2005 through January 1, 2011, interest compounds on the note at a rate equivalent to the annual average total return of the Common Investment Fund, which was (6.60)% and 14.00% for the years ended June 30, 2008 and 2007, respectively. Accrued interest on this loan amounted to $754,713 and $1,190,358 at June 30, 2008 and 2007, respectively, and is included in the balance of this loan as presented in the accompanying statements of financial position.

Other Notes Payable

Other notes payable consist of secured amounts due to third party lenders with the following terms at June 30 ($000’s):

Interest Type - Security Rate Maturity Date 2008 2007

Mortgage note - Central Operations 5.54% November 1, 2022 $ - $ 26,156 Mortgage note - Parish 5.75% September 19, 2023 255 265 Mortgage note - Parish 5.75% November 1, 2023 22 23 Mortgage note - Parish 6.37% October 16, 2010 1,035 1,066 Auto loan - Parish 4.99% June 16, 2008 - 6

Total other notes payable $ 1,312 $ 27,516

The mortgage note - Central Operations was repaid in August 2007 from the proceeds of the sale of most of the remaining property comprising the administrative campus in Brighton (see Note L). The remaining notes are collateralized by the respective parish properties for which the proceeds were used.

17 Page 49 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE F - NOTES PAYABLE - Continued

Scheduled principal payments on the mortgage notes as of June 30, 2008 are as follows ($000’s):

Year Ending June 30

2009 $ 45 2010 48 2011 979 2012 14 2013 15 Thereafter 211

$ 1,312

Interest expense and amounts paid on notes payable was $0.3 million and $1.6 million for the years ended June 30, 2008 and 2007, respectively.

NOTE G - TEMPORARILY RESTRICTED AND PERMANENTLY RESTRICTED NET ASSETS

Temporarily restricted net assets were available for the following purposes at June 30 ($000’s):

2008 2007

Interest in net assets of a foundation - program restricted $ 3,527 $ 4,031 Interest in net assets of a foundation - time restricted 914 580 Buildings and equipment 1,735 1,817 Special collections 2,641 262 Pastoral 11,178 3,894 Education 2,108 1,866 Ministerial 603 1,663 Social 1,347 565 Cemetery future care 79 593 Religious women’s retirement 940 923 Other programs 2,601 3,641

Total $ 27,673 $ 19,835

18 Page 50 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE G - TEMPORARILY RESTRICTED AND PERMANENTLY RESTRICTED NET ASSETS - Continued

Net assets released from restrictions and reclassifications were expended for the following purposes for the years ended June 30 ($000’s):

2008 2007

Land and buildings $ 25,757 $ 8 Clergy retirement benefits 5,449 5,599 Special collections 2,539 938 Pastoral 557 532 Education 228 148 Ministerial 175 424 Other programs and reclassifications (1,178) 5,363

Total $ 33,527 $ 13,012

Permanently restricted net assets were restricted as follows at June 30 ($000’s):

2008 2007

Interest in net assets of a foundation $ 9,981 $ 8,181 Pastoral 11,744 6,992 Education 5,587 5,522 Ministerial 2,568 2,535 Social 200 200 Cemetery future care 126 126

Total $ 30,206 $ 23,556

NOTE H - BENEFIT PLANS

Lay Employee Pension Plan

The Corporation Sole participates with other related Archdiocesan organizations in a noncontributory, defined- benefit multi-employer pension plan covering substantially all lay employees, the Roman Catholic Archdiocese of Boston Pension Plan (the “Pension Plan”). The Corporation Sole’s employees represent approximately 75% of all lay employees covered under the Pension Plan. The Pension Plan is not subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Pension expense allocated to the Corporation Sole is based on payroll cost and amounted to $7.6 million and $7.1 million for the years ended June 30, 2008 and 2007, respectively.

19 Page 51 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE H - BENEFIT PLANS - Continued

Accumulated plan benefits information for Corporation Sole, as provided by consulting actuaries, has not been distinguished from the benefits of the other organizations participating in the Pension Plan and, accordingly, such information is not presented herein. At June 30, 2008, the audited financial statements of the Pension Plan reflected approximately $272.1 million in net assets available for benefits and $301.5 million in accumulated plan benefits. At June 30, 2007, the audited financial statements of the Pension Plan reflected approximately $293.0 million in net assets available for benefits and $286.2 million in accumulated plan benefits.

Lay Employee Health and Dental Benefit Plan

The Corporation Sole participates with other Catholic organizations that operate within the Archdiocese of Boston in a health and dental plan covering substantially all lay employees, the Roman Catholic Archdiocese of Boston Health Benefit Plan (the “Health Plan”). The Corporation Sole’s employees represent approximately 22% of all lay employees covered under the Health Plan. The Health Plan agreement provides that the participating employers make monthly contributions to the Plan of a specified amount for each class of employee. The Corporation Sole’s contributions to the Health Plan, net of employee contributions, amounted to $15.5 million and $11.5 million for the years ended June 30, 2008 and 2007, respectively.

At June 30, 2008, the audited financial statements of the Health Plan reflected approximately $6.5 million in health and dental benefit obligations and $30.2 million in net assets available for benefits. At June 30, 2007, the audited financial statements of the Health Plan reflected approximately $5.5 million in health and dental benefit obligations and $34.0 million in net assets available for benefits.

Clergy Plans

Archdiocese of Boston Clergy Retirement/Disability Plan

The Corporation Sole sponsors a single-employer, noncontributory, defined benefit pension and disability plan covering clergy who are incardinated in the Archdiocese of Boston. Benefits are provided through the Archdiocese of Boston Clergy Retirement/Disability Plan (the “Clergy Retirement Plan”). The Clergy Retirement Plan is not subject to ERISA.

The Clergy Retirement Plan also offers other post-retirement benefits, including health, dental and subsistence benefits which are expected to be paid to or on behalf of currently retired clergy and active clergy after retirement. This obligation is unfunded.

20 Page 52 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE H - BENEFIT PLANS - Continued

The assets and obligations of the Clergy Retirement Plan and the Corporation Sole’s other post-retirement obligations to clergy were as follows as of June 30:

Benefit Obligations ($000s)

Pension Benefits Other Benefits 2008 2007 2008 2007

Change in benefit obligation: Benefit obligation at beginning of year $ 119,485 $ 121,293 $ 47,241 $ 44,472 Service cost 1,331 1,328 794 715 Interest cost 7,238 7,675 3,016 2,880 Plan amendment - 4,016 - - Actuarial (gain)/loss (340) (5,602) (6,335) 962 Benefits and other expenses paid (10,155) (9,225) (1,854) (1,788)

Benefit obligation at end of year $ 117,559 $ 119,485 $ 42,862 $ 47,241

The weighted average assumptions used to determine benefit obligations were as follows:

Pension Benefits Other Benefits 2008 2007 2008 2007

Discount rate 6.55% 6.25% 6.75% 6.40% Rate of compensation increase NA NA NA NA Health care cost trend rate assumed for next year NA NA 8.50% 9.00% Rate to which the cost trend rate is assumed to decline (ultimate trend rate) NA NA 5.00% 5.00% Year that the rate reaches the ultimate trend rate NA NA 2015 2015

Plan Assets ($000s)

Pension Benefits Other Benefits 2008 2007 2008 2007

Change in Plan assets: Fair value of Plan assets at beginning of year $ 57,112 $ 55,509 $ - $ - Actual return on Plan assets (2,764) 5,100 - - Transfers from Clergy Benefit Trust 1,745 5,728 1,854 1,788 Benefits and other expenses paid (10,155) (9,225) (1,854) (1,788)

Fair value of Plan assets at end of year $ 45,938 $ 57,112 $ - $ -

21 Page 53 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE H - BENEFIT PLANS - Continued

The asset allocation for the Clergy Retirement Plan at the end of 2008 and 2007, and the target allocation for 2008, by asset category, are as follows:

Actual Target % of Plan Assets at Year End 2008 2008 2007

Equity Securities 43% 35% 40% Debt Securities 29% 25% 20% Other investments 0% 10% 14% Real Estate* 23% 23% 19% Cash 5% 7% 7%

Total 100% 100% 100%

* Real estate property is valued at book value and is leased to a related party.

The investment policy and strategy, as established by the Corporation Sole, is to provide for growth of capital with a moderate level of volatility by investing assets based on the target allocations stated above. The Clergy Retirement Plan will reallocate its investments periodically to meet the above target allocations. The Clergy Retirement Plan also reviews its investment policy periodically to determine if the policy or allocations should be changed.

Reconciliation of Funded Status ($000s)

Pension Benefits Other Benefits 2008 2007 2008 2007

Funded status $ (71,621) $ (62,373) $ (42,862) $ (47,241)

Accrued cost $ (71,621) $ (62,373) $ (42,862) $ (47,241)

Effective June 30, 2007, the Corporation Sole adopted the provisions of SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans an amendment of FASB Statements No. 87, 88, 106 and 132 (R) (“SFAS No. 158”). This statement requires an employer to recognize the over-funded or under-funded status of a defined benefit plan (other than a multi-employer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through changes in unrestricted net assets. By requiring that employers account for the funded status of the defined benefit plan on the statement of financial position, such items as prior service cost and actuarial gains and losses that had previously received delayed recognition treatment are now fully accounted for in the financial statements.

In connection with the initial adoption of SFAS No. 158, the Corporation Sole recognized a reduction of $24.3 million in its accrued pension liability representing the impact of eliminating deferred actuarial gains of $22.5 million and a prior service cost credit of $1.8 million.

22 Page 54 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE H - BENEFIT PLANS - Continued

Components of Net Periodic Pension Cost ($000s)

Pension Benefits Other Benefits 2008 2007 2008 2007

Service cost for benefits earned during the period $ 1,331 $ 1,328 $ 794 $ 715 Interest cost on projected benefit obligation 7,238 7,675 3,016 2,880 Expected return on Plan assets (3,443) (3,496) - - Net amortization and deferral (491) (279) (429) (429)

Net periodic pension cost $ 4,635 $ 5,228 $ 3,381 $ 3,166

Accumulated Amounts Charged/Credited to Unrestricted Net Assets ($000s)

Other Pension Benefits Postretirement Benefits 2008 2007 2008 2007

Net Actuarial loss/(gain) $ (16,489) $ (23,122) $ (5,732) $ 603 Prior service cost/(credit) 3,741 4,016 (5,360) (5,789) Transition obligation/(asset) - - - -

Total $ (12,748) $ (19,106) $ (11,092) $ (5,186)

The change of $452,000 in the accumulated amount charged to unrestricted net assets in 2008 is classified as a component of non-operating income (loss) in the accompanying statement of activities.

The weighted average assumptions used to determine benefit plan cost were as follows:

Pension Benefits Other Benefits 2008 2007 2008 2007

Discount rate 6.55% 6.25% 6.75% 6.50% Rate of compensation increase - - - - Expected return on plan assets 6.50% 6.50% 6.50% 6.50%

Health care cost trend rate assumed for next year N/A N/A 8.5% 8.0% Rate to which the cost trend rate is assumed to decline (ultimate trend rate) N/A N/A 5.0% 5.0% Year that the rate reaches the ultimate trend rate N/A N/A 2015 2012

23 Page 55 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE H - BENEFIT PLANS - Continued

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percentage point change in assumed health care cost trend rates would have the following effects ($000s):

Other Benefits Other Benefits One Percentage One Percentage Point Increase Point Decrease 2008 2007 2008 2007

Effect on service and interest cost $ 600 $ 603 $ (486) $ (482) Effect on benefit obligation 5,275 6,049 (4,416) (5,042)

To determine the expected long-term rate of return, the Clergy Retirement Plan considered the historical returns of the major market indicators relating to the target asset allocation, as well as the current economic and financial market conditions.

Expected Benefit Payments ($000s)

Years ending Pension Other June 30 Benefits Benefits

2009 $ 10,521 $ 2,215 2010 11,145 2,521 2011 10,960 2,680 2012 10,804 2,843 2013 10,562 2,970 2014 - 2018 50,048 16,705

Archdiocese of Boston Clergy Benefit Trust

The Corporation Sole sponsors a noncontributory benefit trust that was established for the purpose of generating and providing support for the benefit of clergy who are incardinated in the Archdiocese of Boston. Benefits provided through the Archdiocese of Boston Clergy Benefit Trust (the “Clergy Benefit Trust”) include the funding of the Archdiocese of Boston Clergy Medical/Hospitalization Plan, the Archdiocese of Boston Clergy Retirement/Disability Plan and the Archdiocese of Boston Benefit Trust for Non-Incardinated Priests Duly Assigned for Services in the Archdiocese of Boston on an as needed basis. Additional benefits include support for the well-being of clergy incardinated in the Roman Catholic Archdiocese of Boston at the discretion of the Trustee. The Clergy Benefit Trust is not subject to ERISA.

24 Page 56 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE H - BENEFIT PLANS - Continued

During the years ended June 30, 2008 and 2007, $5.4 million and $5.6 million, respectively, of collections from parishes restricted to assist clergy were contributed into the Clergy Benefit Trust. During the years ended June 30, 2008 and 2007, approximately $300,000 and $763,000, respectively, were disbursed to support the Archdiocese of Boston Clergy Medical/Hospitalization Plan and $1.4 million and $2.6 million, respectively, were disbursed for supplementary clergy benefits. Also during the year ended June 30, 2008 and 2007, $3.6 million and $7.5 million, respectively, was transferred to the Archdiocese of Boston Clergy Retirement/Disability Plan. At June 30, 2008 and 2007, the audited financial statements of the Clergy Benefit Trust reflected $2.8 million and $4.3 million, respectively, of net assets available for benefits.

Archdiocese of Boston Clergy Medical Plan

The Corporation Sole sponsors a health and dental plan covering clergy who are incardinated in the Archdiocese of Boston. Benefits are provided through the Roman Catholic Archdiocese of Boston Clergy Medical/Hospitalization Plan (the “Clergy Health Plan”). The Clergy Health Plan provides that the Corporation Sole and related organizations that have covered clergy make monthly contributions to the Plan based on their number of clergy. The Clergy Health Plan is not subject to ERISA. The Corporation Sole contributed approximately $3.6 million and $3.1 million for the years ended June 30, 2008 and 2007, respectively. The audited financial statements of the Clergy Health Plan reflected a $113,579 and $322,376 deficiency in net assets available for benefits at June 30, 2008 and 2007, respectively.

Archdiocese of Boston Non-Incardinated Priests Trust

The Corporation Sole sponsors a health and benefit plan covering priests who are non-incardinated in the Roman Catholic Archdiocese of Boston and assigned for service in the Archdiocese of Boston. These benefits are provided through the Benefit Trust for Non-Incardinated Priests Duly Assigned for Services in the Archdiocese of Boston (the “Non-Incardinated Trust”). The Non-Incardinated Trust is not subject to ERISA. During the years ended June 30, 2008 and 2007, approximately $50,331 and $50,000, respectively, was transferred from the Clergy Benefit Trust into the Non-Incardinated Trust. The audited financial statements of the Non-Incardinated Trust reflected $40,181 and $61,648 in net assets available for benefits at June 30, 2008 and 2007, respectively.

Early Retirement Program

During the year ended June 30, 2008 the Corporation Sole offered an early retirement program to certain employees. The total cost of the one-time termination benefits was $3.5 million and is being expensed over each individuals required future service period. For the year ended June 30, 2008, $1.9 million is included in management and general expense in the statement of activities and in other liabilities in the statement of financial position at June 30, 2008 for this one-time termination benefit.

25 Page 57 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE I - PARISH RECONFIGURATION

In May 2004, the Corporation Sole entered into a reconfiguration plan that included the suppression of certain parishes. This plan was in response to significant changes occurring within the Archdiocese of Boston, including changing demographics, a decline in the number of clergy, and the impact of deferred maintenance on parish properties. Since the initial plan was established, sixty-four parishes have been closed and consolidated with adjoining parishes.

The Corporation Sole separately accounts for all financial activities of Archdiocesan parishes as a separate reporting unit in its financial statements. The Corporation Sole accounts for all closed parishes in Central Funds, another reporting unit of the Corporation Sole. At the time a parish is closed, the unrestricted net assets of the parish are transferred to Central Funds at their net book value.

The land and buildings associated with thirty-three suppressed parishes have been sold through June 30, 2008. Gains of approximately $3.4 and $3.6 million are being recognized during the years ended June 30, 2008 and 2007, respectively, for reconfiguration sales. These gains are included in the accompanying statements of activities as part of the gain on sale of other land and buildings.

The cost of maintaining the suppressed parish properties are included in the accompanying statements of activities as parish reconfiguration expenses.

Eight lawsuits arose out of the reconfiguration process, primarily asserting claims that the Corporation Sole held the property of these former parishes in trust. At present, all but one of these cases has been dismissed. A motion to dismiss the last suit remains pending.

NOTE J - RESERVES FOR LOSSES

During the year ended June 30, 2005, the Corporation Sole established a $25.0 million reserve for the estimated cost of future settlements of clergy misconduct claims. At June 30, 2008 and 2007, the Corporation Sole’s reserve for these estimated future settlements was $10.0 and $16.5 million, respectively, which is included in the reserves for losses in the accompanying statements of financial position.

During the year ended June 30, 2008, the Corporation Sole entered into settlement agreements with 55 individuals who had brought sexual misconduct claims for approximately $5.5 million.

During the year ended June 30, 2007, the Corporation Sole entered into a settlement agreement with 34 individuals who had brought sexual misconduct claims for $2.1 million. The settlements were paid throughout the year and were partially funded with the remaining $1.1 million of restricted monies that had been received in the 2005 settlement with insurance carriers.

The Corporation Sole is now substantially self-insured for the risk of loss on clergy misconduct claims. The ultimate cost to defend or settle these claims is subject to uncertainty and the estimated liability is subject to change. The nature and the magnitude of the potential effects of these claims could have a material impact on Corporation Sole’s financial condition and cash flows.

26 Page 58 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE J - RESERVES FOR LOSSES - Continued

During each of the years ended June 30, 2008 and 2007, the Corporation Sole expensed $2.8 million and $2.0 million, respectively, for funding provided to a related organization for the purpose of providing counseling services to individuals affected by clergy misconduct and other educational and abuse prevention services.

NOTE K - COMMITMENTS AND CONTINGENCIES

Construction

The Corporation Sole has commitments to fund construction and other contracted costs in the amount of approximately $11.4 million and $13.6 million at June 30, 2008 and 2007, respectively.

Other Legal Proceedings

The Corporation Sole is involved in various legal proceedings arising out of and incidental to its activities other than claims of sexual misconduct discussed in Note J and claims relating to suppressed parishes discussed in Note I. In management’s opinion, the ultimate liability which may arise from these proceedings is not expected to have a material effect on the Corporation Sole’s unrestricted net assets and changes in net assets.

NOTE L - RELATED PARTY TRANSACTIONS

In July 2007, the Corporation Sole and St. John’s Seminary entered into an agreement with Boston College to sell the Archdiocese of Boston’s remaining administrative campus of 18.7 acres of land for $65.0 million of which $61 million was paid prior to June 30, 2008. In accordance with the agreement, the remaining $4.0 million is to be paid upon satisfaction of two conditions, one of which was satisfied in July 2008 and the second of which the Corporation Sole expects to satisfy in the foreseeable future.

The sales price, which was received by the Corporation Sole, was allocated between the Corporation Sole and St. John’s Seminary based upon the relative appraised value of the property owned by each entity. The amount allocated to St. John’s Seminary was $45.6 million, inclusive of accrued interest, and is included in due to related organizations in the statement of financial position at June 30, 2008. In December 2008, the Corporation Sole and St. John’s Seminary entered into a subordinated 10 year non- interest bearing promissory note for $36.4 million of the amount due to St. John’s Seminary. The Corporation Sole paid an aggregate of $9.2 million to St. John’s Seminary in January and February 2009.

The Corporation Sole provides administrative, technology and clerical services to related Catholic organizations. Service fees of $3.6 million and $4.6 million were charged for these services during the years ended June 30, 2008 and 2007, respectively. The revenue from these service fees is included in revenue from services provided in the accompanying statements of activities.

The Corporation Sole utilizes The Catholic Foundation to provide all centralized fundraising services including the annual Catholic Appeal, Planned Giving and other fundraising activities. Amounts paid to The Catholic Foundation for these services amounted to $3.0 million and $1.4 million for the years ended June 30, 2008 and 2007, respectively.

27 Page 59 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2008 and 2007

NOTE L - RELATED PARTY TRANSACTIONS - Continued

On July 1, 2006, the Corporation Sole transferred the governance and related operating assets and liabilities (excluding land and buildings) of the high school at St. Mary’s Parish in Lynn to a newly formed related organization, St. Mary’s High School, Inc. This transfer is reflected as a net asset transfer in the statement of activities for the year ended June 30, 2007.

On October 1, 2007 the Cemetery Association assumed responsibility for the operations of two cemeteries with the transfer of ownership from the Holy Family Parish in Gloucester, MA as part of the parish reconfiguration process. The net assets of these cemeteries on the date of transfer were $200,586. In December 2007, the Corporation Sole transferred $643,886 from parish reconfiguration funds to the Cemetery Association as funding for the future care of these cemeteries. These transfers are reflected as a net asset transfer in the statement of activities for the year ended June 30, 2008.

On August 13, 2007 as part of the parish reconfiguration process, $2.5 million was transferred to Trinity Catholic Academy Brockton, Inc., a newly formed related organization that consolidated the operations of certain parish schools in Brockton. This transfer is reflected as a net asset transfer in the statement of activities for the year ended June 30, 2008.

The Catholic Schools Foundation, Inc., a related organization, provides support to Catholic schools located in the Archdiocese of Boston. During the years ended June 30, 2008 and 2007, this foundation awarded $3.8 million and $3.6 million in inner city scholarships to elementary schools that are operated by Corporation Sole’s parishes.

NOTE M - SUBSEQUENT EVENTS (unaudited)

Subsequent to June 30, 2008, the Corporation Sole sold three properties classified as held for sale at June 30, 2008 for approximately $1.2 million recognizing a gain of approximately $900,000 on such transactions.

Due to volatility in the domestic and international fixed income and equity markets, the fair value of the Corporation Sole’s investments has decreased by approximately 21% from July 1, 2008 to February 28, 2009. The value of investments presented in the statement of financial position as of June 30, 2008 do not reflect any market events after such date.

28 Page 60 · 2008 Financial Report for the Archdiocese of Boston

SUPPLEMENTAL INFORMATION

29 Page 61 · 2008 Financial Report for the Archdiocese of Boston

Grant Thornton

Audit  Tax  Advisory

Grant Thornton LLP 175 W Jackson Boulevard, 20th Floor Chicago, IL 60604-2687

T 312.856.0200 F 312 565 4719 www.GrantThornton.com

Report of Independent Certified Public Accountants on Supplemental Information

His Eminence Cardinal Sean Patrick O’Malley, O.F.M. Cap. The Roman Catholic Archbishop of Boston

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole of The Roman Catholic Archbishop of Boston, A Corporation Sole (“the Corporation Sole”) as of and for the years ended June 30, 2008 and 2007. The supplemental information is presented for pur- poses of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Boston, Massachusetts March 17, 2009

30 Page 62 · 2008 Financial Report for the Archdiocese of Boston

THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, BOSTON, OF ARCHBISHOP CATHOLIC THE ROMAN SOLE CORPORATION A Positions Financial of Statements Combining 2008 30, June 2007) 30, June as of information summarized (With

Page 63 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Combining Statements of Activities - Unrestricted For the year ended June 30, 2008 (With summarized information for the year ended June 30, 2007)

Page 64 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Combining Statements of Activities - Temporarily Restricted For the year ended June 30, 2008 (With summarized information for the year ended June 30, 2007)

Page 65 · 2008 Financial Report for the Archdiocese of Boston THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Combining Statements of Activities - Permanently Restricted For the year ended June 30, 2008 (With summarized information for the year ended June 30, 2007)

Page 66 · 2008 Financial Report for the Archdiocese of Boston

CORPORATION SOLE’S COMPENSATION AND VENDOR DISCLOSURE

COMPENSATION SCHEDULES

CURRENT CABINET COMPENSATION COMPENSATIO EMPLOYEE TITLE NOTES N His Eminence Seán P. Cardinal O’Malley, Paid to Capuchin Priests and O.F.M. Cap. Archbishop of Boston $ 33,800 Brothers Very Reverend Richard Vicar General & M. Erikson, Ph.D, VG Moderator of the Curia $ 32,300 Auxiliary & Most Reverend Emilio S. Vicar for Hispanic Allue, SDB Apostolate $ 34,200 Sister Marian Batho, CJS Delegate for Religious $ 49,608 Paid to Sisters of St. Joseph Secretary for Faith Formation & Janet P. Benestad Evangelization $150,000 Sister Clare Bertero, Special Assistant to OSF the Archbishop $ 45,609 Paid to The Franciscan Sisters Most Reverend John P. Auxiliary Bishop Boles Emeritus $ 27,000 Reverend John J. Special Assistant to Connolly, Jr. the Archbishop $ 31,400 Very Reverend Arthur M. Episcopal Vicar for the Coyle, V. E. Merrimack Region $ 34,000 Secretary for Terrence Donilon Communications $166,304 Most Reverend John A. Regional Bishop - Dooher South Region $ 33,900 Most Reverend Walter J. Regional Bishop - Edyvean West Region $ 34,400 Episcopal Vicar & Very Reverend Thomas Secretary for Parish S. Foley Life and Leadership $ 32,200 Secretary for Health & Paid as a member of the faculty Reverend J. Bryan Hehir Social Services $ 0 of Most Reverend Robert F. Regional Bishop - Hennessey Central Region $ 33,000 Most Reverend Francis Regional Bishop - X. Irwin North Region $ 34,800 Reverend Arthur L. Rector, St. John's Salary paid by St. John's Kennedy Seminary $ 34,200 Seminary Reverend Robert T. Chief Secretary to the Kickham Archbishop $ 31,100

Page 67 · 2008 Financial Report for the Archdiocese of Boston Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 68 · Financial 2008 Uglietto Peter J. Reverend Very Cap. O.F.M. M. Peterson, Br. James O'Neill Mary Grassa O'Connell Mark Reverend Very P McDonough James F. Beirne Lovely, Jr. BeirneF. Scot Landry J. J. Walsh Donilon T. McGonagle T. S. Landry McDonough J. E

MPLOYEE CORPORATION E

MPLOYEE

TOP FIVE EMPLOYEES COMPENSATION FOR FISCAL YEAR 2008 YEAR FISCAL FOR COMPENSATION FIVE EMPLOYEES TOP

CURRENT CABINET COMPENSATION - CONTINUED - COMPENSATION CABINET CURRENT SOLE Judicial Vicar Judicial Seminary National John XXIII Blessed Rector, Affairs Canonical Curia, the of Moderator the to Assistant Education for Secretary Chancellor Services, Administrative & Financial for Secretary General Counsel General Development Institutional for Secretary Catholic Schools Catholic of Superintendent Associate Communications for Secretary Finance of Director Development Institutional for Secretary Chancellor Services, Administrative & Financial for Secretary

’

S COMPENSATION T T

ITLE ITLE

C C OMPENSA OMPENSA $ 178,825 $ 250,000 $ 250,000 $ 163,650 $ 166,304 $ 33,100 $ 45,609 $325,000 $ 31,800 $250,000 $300,000 $250,000 TION TION

AND VENDOR

- -

John XXIII Seminary John XXIII Blessed by paid Salary Brothers and Priests Capuchin Paid to

Secretary Cabinet Secretary Cabinet Secretary Cabinet

DISCLOSURE N N OTES OTES

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 69 · Financial 2008 sultants. The above disbursements include insurance premiums disbursed to insurers. disbursed to premiums include insurance disbursements above The sultants. con- management and risk brokers insurance are Inc. USA, and Marsh Services FargoInsurance Well TEN HIGHEST PAID TEN HIGHEST 2008 FISCAL FOR YEAR VENDORS Themeli Builders, Inc. Builders, Themeli Construction Auburn LLP & Gray Ropes Inc. Construction Santini 1) (Note Inc. USA, Marsh Corp. Construction R.A.D. Corp. Construction TLT & Construction Folan Waterproofing (Note 1) Services FargoInsurance Well Suffolk Construction Suffolk CORPORATION Note 1

VENDOR

SOLE

’ S COMPENSATION

AND VENDOR $ 2,119,579 $ 1,337,153 $ 1,551,152 $ 1,557,165 $ 2,111,717 $ 2,159,693 $ 2,902,932 $ 3,820,544 $ 2,902,894 $ 4,010,598 AMOUNT

DISCLOSURE

 www.bostoncatholic.org

FISCAL YEAR 2008 FUNDING FOR ABUSE SETTLEMENTS AND RELATED COSTS

OVERVIEW In April 2006, as part of the overall financial transparency presentation, the Archdiocese of Boston published a report entitled “Financial Disclosure of the Archdiocese of Boston Regarding Sexual Abuse Settlements and Related Costs.” That report detailed the payments that had been made by the Archdiocese to fund sexual abuse settlements and related costs in the years prior to June 30, 2005. The report also described the sources of the funds that had been expended. The Archdiocese committed to and has updated the report on an annual basis. This report covers fiscal year 2008.

SEXUAL ABUSE SETTLEMENTS AND RELATED COSTS Sexual Abuse Settlements. During fiscal year 2008, the total amount expended by the Archdiocese to settle claims arising from sexual abuse was $5,475,368. This represented a total of 55 settlements.

Costs for Pastoral Response and Abuse Prevention and Training. In fiscal year 2008, the Archdiocese expended $2,794,306 to cover the expenses associated with administering abuse prevention efforts and funding outreach to promote healing and reconciliation with survivors and others harmed by sexual abuse. That figure includes the expenses incurred by three principal offices of the Archdiocese: the Office of Volunteer Resources (which conducts annual CORI checks of clergy, employees and volunteers), the Office of Child Advocacy, Implementation, and Oversight (which oversees abuse prevention training), and the Office of Pastoral Support and Outreach (which administers the program of the Archdiocese to fund therapy and related services to survivors of abuse). Under the program administered by the Office of Pastoral Support and Outreach, the Archdiocese funds weekly therapy and related medications. This support is available whether or not the survivor has brought a claim against the Archdiocese, and continues to be available after a claim has been settled. In fiscal year 2008, the program funded therapy for 308 individuals, at a cost of $1,353,311.

Other Costs Related to Sexual Abuse Claims. In addition to the moneys paid in settlements and the costs of its pastoral response and abuse prevention programs, the Archdiocese incurred an additional $1,736,357 in costs to respond to and facilitate the settlement of sexual abuse claims during the past fiscal year. These costs were comprised principally of legal costs as well as expenses for mediation and arbitration.

Page 70 · 2008 Financial Report for the Archdiocese of Boston Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 71 · Financial 2008 of betrayed trust experienced by so many. Encouraged by the words of of words the by Encouraged to committed be to many. continue we so 2008, April in assisting their recovery. survivorsfamilies process of and by in visit experienced his during XVIBenedict trust Pope betrayed clergy of with associated costs financial the pain the assuage can money of amount no of Boston, of Archdiocese the in abuse sexual reality the expresses report this While C supplemental basis, annual an on provide, to of those continue sources for funds settlements. the and willclaims abuse sexual of settlements Archdiocese future any regarding information The financial F ofadministrativeto proceeds costs fund related sexual sales property to claims. abuse expenses. Sales Property and related healing promote and to outreach and settlements with harmedreconciliation others by survivors abuse. efforts sexual and prevention associated abuse in expenses the administering cover with to $484,454 provided was funding of funded $1,876,400 Additionally, settlements, abuse Self-Insurance two companies recoveries insurance that from was to fully settlements. used fund Recoveries Insurance costs. used settlement not being for are process reconfiguration parish the from proceeds and Appeal, Catholic Annual the Campaign, Tomorrow for Promise the from raised money funds, parish that practices, past with consistent clear, made be should It above. described expenses related and settlement of costs the cover to sufficient been have and sources These sales property funds. insurance estate real both sexual of the to proceeds related coststhe other from and settlements 2008 the fiscal funded hasin Archdiocese claims The abuse S the by Archdiocese incurred the costs ($4,530,663), other claims of abuse sexual total the the a expended total of $10,060,031 during the yearfiscal 2008. to as related well Archdiocese as Costs ($5,475,368) of Summary settlements OURCES UTURE LOSING

R W OF EPORTS ORDS F UNDS sl-nuac fn, salse b te rhics t rsod to respond to Archdiocese the by established fund, self-insurance A uig icl er 08 te rhics ue $,4,5 fo the from $6,041,355 used Archdiocese the 2008, year fiscal During

n icl er 08 te rhics rcie $,0,2 of $1,603,822 received Archdiocese the 2008, year fiscal In aig no con te oa cs o te eul abuse sexual the of cost total the account into Taking

 www.bostoncatholic.org

COMPENDIUM OF AUDITED FINANCIAL STATEMENTS OF CORPORATION SOLE RELATED ORGANIZATIONS

For a complete description of the related organizations and their audited financial statements, please visit our website at http://www.bostoncatholic.org and click on the Offices & Services tab and click on Finance, listed alphabetically. Thank you.

LISTING OF RELATED ORGANIZATIONS

CEMETERIES Catholic Cemetery Association of the Archdiocese of Boston, Inc. (The)

COMMUNITY RELATIONS Boston Catholic Television Center, Inc. Massachusetts Catholic Conference, Inc.

EDUCATION Archbishop Williams High School, Inc. Archdiocesan Central High Schools, Inc. Bishop Fenwick High School, Inc. Cardinal Spellman High School, Inc. Cathedral High School, Inc. High School, Inc. Marion High School, Inc. , Inc. Mother Caroline Academy for Girls North Cambridge Catholic Corporate Work Study Program, Inc. North Cambridge Catholic High School, Inc. Pope John Paul II Catholic Academy, Inc. Pope John XXIII High School St. Columbkille School, Inc. St. Mary's High School St. Sebastian's School, Inc. St. Sebastian's School Fund, Inc. Trinity Catholic Academy, Inc.

Page 72 · 2008 Financial Report for the Archdiocese of Boston Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 73 · Financial 2008 Benefit Trust for non-Incardinated PriestsDuly non-Incardinated Benefit Servicefor theTrust Archdiocese in for Assigned Roman Catholic Archdiocese Catholic Boston Archdiocese LifeRoman of Insurance and Accidental Dismem- Death, L ISTING Roman Catholic Archdiocese of Boston Transition Assistance Program Trust Catholic Boston Archdiocese Roman of AssistanceTransition Program Trust OF Pension Plan & Trust of the Roman Catholic Archdiocese of Boston Plan & CatholicPension of Trust the Roman ofBoston Archdiocese Common Investment Fund, Roman Catholic Archbishop of Boston Catholic Investment ofCommon Roman Boston Fund, Archbishop R Archdiocese of Boston Clergy Medical / Hospitalization Trust ofBostonArchdiocese Hospitalization Clergy / Trust Medical Catholic Foundation of the Archdiocese of Boston, Inc. (The) Foundation Catholic ofBoston,the Archdiocese (The) of Inc. Roman Catholic Archdiocese Catholic Boston Archdiocese HealthRoman of Benefit Trust Archdiocese of Boston Clergy Retirement / Disability Trust ofBostonArchdiocese Disability Clergy/ Retirement Trust ELATED Church of St. EducationalChurch Charles Borromeo Foundation Massachusetts Catholic Self-Insurance Group, Inc. Group, CatholicMassachusetts Self-Insurance berment & Long-Term Long-Term berment & Disability Trust Insurance St. Mary's Women Mary'sSt. and Inc. Center, Children's Women H Marian High School Fund, HighMarian Support Inc. School (The) Archdiocese of Boston Clergy Benefit ofBoston Archdiocese ClergyTrust Benefit O EALTH Caritas Christi Retirement Plan ChristiCaritas Retirement and Trust RCAB Collective Investment Partnership RCAB Collective Investment St. Mary'sSt. Inc. High Foundation, School Fixed Income InvestmentFixedFund, Income RCAB RGANIZATIONS Franciscan Hospital for Children, Inc. Hospital Children, Franciscan for Fund Catholicfor Schools,Fund Inc. (The) Development of MarianDevelopment Education Catholic School Foundation, School Catholic Inc. , R ETIREMENT D Caritas Christi Christi Caritas H EVELOPMENT

EALTHCARE of Boston Boston of

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T RUSTS

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 74 · Financial 2008

Office ofOutreach,Assistance, Office and Education Prevention ofthe Archdiocese ofBos- L ISTING OF R Catholic Charitable Bureau of the Archdiocese of Boston, Inc. Charitable ofCatholic the ArchdioceseBureau of Boston, Inc. West Broadway Community Development Corporation, Inc. BroadwayCorporation,West Inc. Development Community Columbia Road Community Development Corporation, Inc. RoadCommunityCorporation,Columbia Inc. Development ELATED Catholic Action League of Massachusetts, Inc. (The) Action Massachusetts,Catholic League of Inc.(The) Missionary Society of St. James the Apostle (The) James MissionarySt. theApostle (The) Society of Propagation of the Faith of ofthe FaithPropagation of Boston, Inc. (The) Blessed John Seminary, XXIIIBlessed National Inc. O Massachusetts Catholic Woman's Guild CatholicMassachusetts Guild Woman's RGANIZATIONS Planning Office Affairs,Inc. Urban Planning for Catholic Social Services, Inc. Social Services,Catholic Inc. St. Francis Charities,Inc. Francis St. St. Ann's Home, Ann's Inc.St. St. John's Seminary John's St. Life Resources, Resources, Life Inc. Cushing Hall, Inc. Inc. Hall,Cushing , Inc. Cleri,Inc. Regina S ton, Inc. (The) Inc. ton, OCIAL M

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 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 76 · Financial 2008

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OF Charlestown St Mary Catherine St -St Francis de Saint Sales Parish Charlestown Charlestown Bridgewater Saint Saint Thomas Aquinas Parish Bridgewater Chelmsford Saint Mary Saint Parish Chelmsford

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 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 77 · Financial 2008

Lady the Assumption Our Parish of Harbor Green Saint Tarcisius Parish Parish Saint Stephen Framingham Saint BridgetParish Framingham Framingham Conception Immaculate Parish Mary Saint Parish the Saint Albert Great Parish East Weymouth East East Walpole Weymouth John Saint Parish Bridgewater E P ARISHES

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THE C Somerville Saint Catherine ofGenoa Saint Parish Saint Benedict Parish Somerville Saint Anthony Parish Somerville Saint Ann Parish Somerville Somerville Heart Parish Sacred Roslindale Saxonville Saint George Parish Saint Saxonville Randolph Saint Mary Saint Parish Parish Saint Bernadette Randolph Randolph Pepperell Saint Joseph Parish Saint Pepperell Rockland Holy Family Parish Holy Family Parish Rockland Kateri Blessed Parish Tekakwitha Saint PeterParish Plymouth Mary Saint Parish Plymouth Plymouth Sherborn Saint Parish Saint Theresa Sherborn ofthe Parish Sea Star Salisbury Parish Saint Anne Readville ITY Plainville Saint Martha Saint Parish Plainville Lady Fatima Our Parish of Peabody Reading Saint Saint Athanasius Parish Parish Saint Agnes Reading Reading Roxbury St. Katharine Drexel St. Parish Parish Saint Patrick Roxbury LadyPerpetual Our of Parish Help Roxbury Mary the Saint of Angels Parish Roxbury Roxbury Scituate Saint Mary theNativity Saint of Parish Scituate Saugus Saint Margaret Saint Parish ParishSacrament Blessed Saugus Saugus Sharon Our Lady of Sorrows Parish LadySorrows Our of Parish Sharon Saint Anthony of Padua Parish Mary the Saint Parish of Assumption Revere Conception Immaculate Parish Revere Revere A uny Holy Trinity Parish Heart Parish Sacred Quincy Joseph Parish Saint Quincy John Saint theBaptist Parish Quincy Quincy Shirley Saint Saint Anthony Parish Shirley /T Salem Saint John Saint theBaptist Parish James Parish Saint Salem Conception Immaculate Parish Salem Parish Saint Anne Salem Salem RCHDIOCESE OF OWN P ARISH B

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 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 81 · Financial 2008 West Roxbury Saint of Saint Theresa Avila Parish John Parish Saint Chrysostom Roxbury West Parish Holy Name Roxbury West Mary Saint Parish Roxbury West Quincy West Saint Ann Parish John Saint theEvangelist Parish Bridgewater West WellesleyHills Francis Xavier Saint Parish Saint Paul Parish De Saint Vincent Paul Parish South Weymouth Hamilton South Saint PeterParish Boston South LadyCzestochowa Our of Parish Boston South Monica-St Augustine Parish Saint Boston South Heaven of Gate Parish Boston South Saint BrigidParish Boston South P ARISHES

OF Swampscott Saint John Saint theEvangelist Parish Swampscott West Acton Saint Elizabeth of Hungary Parish ofHungary Saint Elizabeth Parish ActonWest

THE Tewksbury Saint Saint Parish William Tewksbury C Watertown Sacred Heart Parish Sacred Parish Saint Patrick Watertown Watertown West Lynn Sacred Heart Parish Sacred LynnWest Mary Saint Magdalen Parish Tyngsboro Somerville Patronage of Saint Joseph Parish ofSaintJoseph Patronage Parish Somerville Townsend Saint John Saint theEvangelist Parish Townsend Stoughton Saint James Parish Saint Conception Immaculate Parish Stoughton Parish Saint Patrick Stoughton Stoneham Wakefield Most Blessed Sacrament Parish Sacrament Blessed Most Joseph Parish Saint Wakefield Florence Saint Parish Wakefield Wakefield Wellesley Saint Saint Paul Parish Wellesley ITY Topsfield Saint Rose ofLima Saint Parish Topsfield Waltham Sacred Heart Parish Sacred Lady of Our Parish Afflicted Comforter Waltham Mary Saint Parish Waltham Jude Saint Parish Waltham Charles Borromeo Parish Saint Waltham Waltham Wayland Saint Saint Ann Parish Wayland Sudbury Our Lady Fatima Our Parish of Parish Saint Anselm Sudbury Sudbury Walpole Blessed ParishSacrament Blessed Walpole A /T Stow Saint Isidore Saint Parish Stow RCHDIOCESE OF OWN P ARISH B

OSTON

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 82 · Financial 2008

P ARISHES

OF

Winchester Saint Mary Saint Parish Saint Eulalia Parish Winchester Winchester Wilmington Saint Villanova Saint Thomas of Parish Dorothy Saint Parish Wilmington Wilmington THE C Weymouth Sacred Heart Parish Sacred Weymouth Westwood Saint Margaret Mary Margaret Saint Parish Denis Parish Saint Westwood Westwood Wrentham Saint Mary Saint Parish Wrentham Wollaston Saint Saint Ann Parish Wollaston ITY Winthrop Saint John Evangelist Saint the Parish Winthrop Catherine ofAlexandria Saint Parish Westford Whitman Holy Ghost Parish Parish Holy Ghost Whitman Woburn Saint Joseph Parish Saint Charles Borromeo Parish Saint Woburn Saint BarbaraParish Woburn Saint Anthony of Padua Parish Woburn Woburn Weston Saint Julia Parish Saint Weston A /T RCHDIOCESE OF OWN P ARISH B

OSTON

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 83 · Financial 2008 Mr. James F. Mooney, Mr.Jr. James J. Jr., Connors, Mr. John Chair Advancement Institutional Committee Mr.Massaro, CPA George Ms.Mary Ryan Hanley, Mr. Paul CPA Fay Msgr.P. William McCarthy, H. Chair Mr. John CPA, Audit Members Committee Jr. Mosher, Mr. Giles Mooney, Mr. James Jr. A.McNeice Mr. John Ms.Mary Ryan McGrath P. Mr. Sean S.Lynch Mr. Peter McDonough P. Mr. James JoanDuffy,C.S.J. Sister Sandman, Paul Esquire W. Morrissey, J. Robert Esquire McCarthy, H. Mr. John CPA McCall, F. Mr.Jr. William J. Jr. Connors, Mr. John Kaneb, Mr.Vice John Chair VeryPh.D., Erikson, Rev. M.VG Richard CouncilMembers Finance these listing of a full individuals andthe they committees onwhich serve. tostabilize thehis mission Archdiocese andtoensure ofBoston best practices. here Included is realestate,tise infinance,Seán many law, investments, Cardinal otherareas assist to and Finance relatedCommittees. andits Council Theseselflessly professionals give oftheir exper- We give laywho areblessedindividuals numerous by serve oftheir timeandtalent who onthe His Eminence O’Malley, P.HisSeán OFM, Cardinal Chair Eminence Cap., F INANCE COUNCIL

AND C

OMMITTEE M EMBERS

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 84 · Financial 2008 Robert J. Morrissey, J. Robert Esquire McCarthy, H. Mr. John CPA McCall, F. Mr.Jr. William J. Jr. Connors, Mr. John Chair Kaneb, Mr. John McGrath P. Mr. Sean Committee Steering X.Hogan, Frances Esquire Ms.Marci Griffith-Loeber McCall, F. Mr.Jr., Chair William James Cap. Peterson,OFM., M. Brother EstateCommittee Real C.Morrissey, Francis Esquire Sandman, Paul Esquire,Chair W. Stakem,Jr. C. Mr. Thomas Committee Legal J.Mahoney, Jr. Mr. James S.Lynch Mr. Peter Curtis Mr. Gerald Clough, Charles Jr. Morrissey, J. Robert Esquire,Chair Investment Committee Mr. Thomas M. O’Neil M. Mr. Thomas

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 85 · Financial 2008 specific responsibilitiesThe theFinance of Council include: Article III. which Councilnance matters they on those on Charter. be provided this under to are thecounsel Charter, its voteisrequiredbyandwilloversightor theFi- this of seek Archbishop will seekThe Finance theapproval on of Councilthe which on also matters on whichmatters it isto vote, oversee this toor under consultation Charter. provide bycepted theArchbishop. willThe Archbishop theFinance fullyinform Council on thetions, and will implementation ofrecommendations monitor that ac- have been specific recommendations towill theArchbishop on policies, make procedures ac- and reporting. financial esan (iii) achievingand theArchbishop assisting in and transparency openness Archdioc- in (ii) not managing) Archdiocesan operationsfinancial overseeingcondition, (but and ofstrategies mentation designed to assure soundness the Archdiocese, of financial (i) isresponsible on thedevelopment for Council advisingArchbishop andimple- the in in matters thenorms accordcanon with assisting Finance him law.of financial The body, quired canonical established by Archbishop the the purposefor of advising and along CouncilArchdiocese, thePastoral with Council.the Itre- and Presbyteral isa Archdiocese Finance ofThe Boston Council of the isone three ofthe councils major Article II. to as ferred Council. the Archdiocesan Finance name ofthis The body be theArchdioceseshall Finance of Boston also re- Council, Article I. C. B. A. Name Responsibilities To approve, by June approve,by To 30 June of each year, theannual Archdiocesan budgetof and the Archdiocesanplanning long-term financial oversee To financial Purpose To oversee the oversee To financial performancerelative the to regularbudget on a basis; basis; theArchdiocese thenext in of year; succeeding fiscal income and the whichexpenditures are the foreseen entire governance for strategic of planning; aspects

OF THE OFARCHDIOCESE BOSTON Consistent with these responsibilities, the Finance Council the responsibilities, Finance with these Consistent SECOND SECOND AMENDED FINANCE COUNCIL COUNCIL FINANCE F EBRUARY CHARTER

12, 2009 2009 12,

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 86 · Financial 2008 R. and oversee To provide on consultation procedures for maintaining se- and effective Q. P. (1) acts voteon: To of extraordinary definedbylaw,as canon administration the O. N. M. L. K. and oversee To provide on consultation de- more important acts as of administration J. and oversee To provide on consultation any assessment; tax new or diocesan I. H. and oversee To provide on consultation property construction management; and G. F. E. D. To receive periodic reports receive To periodic on the of status issues arising the of Interest from Conflict To oversee and and oversee To provide on consultation employee and compensation benefits poli- To oversee and and oversee To provide on consultation procedures establishingfor account- fiscal and oversee To withprovide on consultation a regularbasis respect to poli- finance To oversee and and oversee To provide on consultation the appointment, performance removal or of To oversee and and oversee To provide on consultation risk coveragemanagement and insurance open provide theChancellor To access seek input; to advice to and and oversee To provide on consultation institutional advancement activities; To recommendto To the theappointmentof Archbishop the external toauditor, review To oversee and and oversee To provide on consultation a mechanism the reporting confidential for issues related to related theArchdiocese; issues technology information cure theconfidentiality sensitive and information; of responsibility ability parishespart and the Archdiocesanof other entities; and on $1,000,000 theproperty exceeds termor ofthe years lease isthree longer; or goods ownedecclesiastical Archdiocese value when by the the ofthemarket leased ofthe Archdiocese income year, the prior for (4)leasingwhichever and greater; of is subject juridic persons theArchbishop over or ofto $27,373* the 5% ordinary annual partythird onArchdiocese, behalf of the over(3) alienations $1,095,000*; by public theArchdiocese,includingand dition of debts obligationspayments other or by a Archdiocesanof transactionsations can or that worsen property the con- patrimonial States Conference ofCatholicUnited Bishops Archdiocesanpolicy, and (2) alien- compliance withtor such policies; on gifts,cashrestrictions and management, asset sales debt financing,and to moni- of investment endowed other and compliance with funds, endowmentobligations and and procedures,includingcies relating asset those acceptance, to preservation, gift against pitude an employee, priest the religious or of Archdiocese; exceeding $50,000; diocese, tur-and (5)allegations of financial impropriety moral or including settlements paymentsceedings, or party by third behalf of a the Arch- on $50,000;excess (4) of payments madeas resulta ofactual threatenedor legalpro- (3) $400,000; oractual legal threatened proceedings involving in exposure financial owned goods Archdioceseby when the the valueofthemarket goods exceeds Archdiocese, the and over $750,000 up (2) theto lease $1,095,000*; of ecclesiastical including debts cese, and other obligations or payments bythird party a of behalf on property transactionssan can or that worsen condition ofthe patrimonial Archdio- by fined law canon policy,(1) alienations Archdiocesan and including: Archdioce- of by employees and other parties of questionable or unethical practices; byand other unethical questionable employees or parties of practices; Policy; retirementprograms; including cies, the Chancellor, the who the shall officer be finance theArchdiocese; of recommendationsto and monitor made auditors; by the the annualaccept and report, audited financial to thereport, ensurepublic access to

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 87 · Financial 2008 C. B. A. Article V. special that volunteers projects mayfor undertaken Financeby be Council. the activelyticipate knowledgeably deliberations ofthe Finance and the Council in be willing and theFinance of Members expected Council attend are to meetings,most prepared to par- be Steeringship. The Committee will achieveseek to diversity also balance. geographic and how and individual’ssider each background the currentmayexpertise complement member- review. Committee Steeringfor Committee The will credentials candidates’ andcon- evaluate submitted to be should Chancellor, the who to willsuch proposals theSteering all forward theFinance of Member a Council of or the Archdiocese. Proposals membershipfor theFinancebership on its or Council one of committees, candidatebea proposed must by a in civil perts business, accounting and/or financial or mem- be selected matters, for law. To a Nominatingacting as Members Committee. be Catholics should in standing, good and ex- will recommended persons Archbishop by Members all theSteeringfrom appoint Committee leastone Member willThe at membership from regionthe each of include Archdiocese. The General Archbishop,Members. theVicar The andtheChancellor are Council Archdiocesan Finance less not shallThe consistthan of nine nor more than fifteen Article IV. Catholic Bishops,of ence and will adjusted annually. be * These amounts These amounts linked tohave theConsumerPriceIndex been United by Confer- the States The term of office of each Member shall be five years, with approximately one-fifth of of the term shall ofoffice of The eachMember be fivewith years, approximately one-fifth The provisions ofthe Article The apply do not V to the The term of office of The each of committeemember ofa the two Finance shall Council be periods. periods. years. Committee termsmembers renewed may be one or for more successive two-year quorumcounted toward a toward or total the ofCouncil.the Finance membership that will thatmembership, except voting bewill she and he longer or a be Member, no not Council. retains all Life the Member Finance A including a rights Member, of committee terms ofoffice two invited consecutive mayfive-year be to become of Lifethe Member a therecommendation on a turning of the Steering Member completing Committee, or 75 ofsuch Member’s son theage 75. the reaching of In discretion of the Archbishop, based ifearlier, or, Member by duration any rea- to such conclusionexpire the its of five-year at officeof inatstatus any thedate Member of approval this Charter, of term the of office of provided,tive however, five-yearterms; the shall that foregoing clause the affect not her or seventy-fifth on his pire birthday. two No serve shall than Member more consecu- saidcally date. the on term office a expire Thereafter, Member of will ex- automatically June the age of 75 priorto on 30,or 2008, suchterm Member’s ofoffice shall automati- year. thecaseMembers’ whoexpiring of terms any In each shall have reached Member Council. T. S. Term ofOffice

To oversee and and oversee To provide on consultation compliance Archdioceseby with the civil To oversee and and oversee To provide on consultation legal exposures facingArchdiocese; the Membership laws and regulations. regulations. laws and and

ex officioex Members theFinance of ex ex officio Members.

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 88 · Financial 2008 Archbishop. The standing committees of the Finance Council shall be: standing oftheArchbishop. The committees Council Finance shall be: hoc Ad committee Council the Each willof Finance Council.by chaired Member theFinance be a of Article X. notarizedand notary. ecclesiastical by an Council. Anynance by Council theFinance by required canon action witnessed law be shall theMembersat present of at anywhich meeting athere is quorum be theactshall of the Fi- of action at business all Except meetings. XII, as Article in provided abelow,the act majority of majorityvoting necessarytheshallA constitute membership be to of quorumfull a the trans-for Article IX. andaretowill to circulated subjectthe Members their approval. be by clared theChair. participationTelephone Minutesis permitted. Council Finance of meetings will bers least in days’of except notice at business meetings, five receive an emergency de- as without ducted the presence of Archbishop one or acting with episcopal his mandate. Mem- of approval the Archbishop, at the request least of Members. can beat con- meeting No four proval ofthe regular isrequired outside meetingmeeting schedule. A be called, with can the meetingsbeally. called by when canonical can Additional theArchbishop consultation ap-or atMeetings willtheof call the Archbishop. must held There be at be least four meetings annu- VIII. Article Meetings Committee.Steering Secretary The minutes will the of meetings Council. record theFinance of Chair will serve the of theperformancethe Chair in of as assigned duties. Vice-Chair The the of place the Vice-ChairChairin Chair will The when act isabsent the and will the assist name thecommittees, and Council of chairs after consultation with theSteering Committee. themembers willthe of Financethe appoint of Finance Vice-Chair committees Council.the The in consultationagenda Chancellor, withand otherwise the arrange the effectivefor functioning of and conduct will schedule coordinate thepreparation ofthe theand Vice-Chair all meetings, with theSteeringconsultation Committee. Thewill Chancellor Secretary. Chair as serve The among Chair,theMembersFinancefrom theVice-Chair and will of Councilthe appoint after a officersshall and Secretary. The Archbishop consistwillof Chair, Vice-Chair a The a as serve VII. Article Officers and ofoffice. term pointed. Uponappointment, each begin newnew shall a Member five-year by be shall appointment by in filled Archbishop the same are newmanner as ap- Members resignation, byVacancies of reason disability, death, termofoffice or of termination otherwise, Article VI. D. The term of office of the Vice Chair term ofoffice Finance of The the Vice of the Council shall beyears. three A mem- tive. may thanber one serve Vice more term as Chair, but terms notbe may consecu- multiple committees can be established by vote of Councilthe Finance approval the with of the Quorum and Voting Vacancies Committees

Duties Duties

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 89 · Financial 2008 ence. shall haveand credentials members investment withproven and/or experi- business general Investment consist gifts. The shall Committee leastone Memberof at of Councilthe Finance gifts of tance Archdioceseby the and the disbursement of endowed funds from and restricted policies.investment Investmentin Committee The shall the recommend guidelines for accep- review performance of the each manager andrecommendto Council theFinance any changes select investment shall Committee the to the managers manage assets, and funds periodically policies investment the and determine appropriate allocation ofinvestments. The Investment whateverof andwhatever nature for purpose theArchdiocese. maintained, of shallIt approve InvestmentshallCommittee the investmentThe oversee managementof all thevarious funds, D. credentials general vancement and/or business experience. one Member of Councilleast the Finance with and have shall institutional proven members ad- throughout grams the Institutional Archdiocese. The Advancementinclude shall Committee at Archdiocese, the and recommendationsmake improve coordinationof thesuccess to and pro- Advancement Institutional The Committee shall theinstitutional oversee effortsadvancement of C. control credentials and experience. and leastone Member theFinance clude at of Council, shall haveand with members audit proven and controls the process. financial reporting ofThe the Committee Audit membership willin- theand Archbishop. Committee Audit monitor willinternal thesystem The andoversee also of and auditor external appropriate recommendationsmake to theFinance Council,the Chancellor Council. Committee shallFinance The Audit the an annual reportmake on performance ofthe togetherletter,statements, withtheauditor’s aftermanagement and, to the review,them present Committee Audit shallThe receive thereport theexternal of auditor the on annual financial B. committees. who Vice-Chair, willthe theSteering chair well Committee,as the as standing of the other chairs the budget to Financefull the Council. membership of SteeringThe will Committee of consist the Archdiocese,yearand, later than of no the MaySteeringwill Committee 1, a recommend will Committee Steering theChancellorrecommended receive a from budget the next for fiscal used in development. budget and theparameters its later than No ofeach year,April 1 the Steering will The developing Committee procedures for theannual review the operatingfinancial Chair on appointments committeescommittee theVice-Chair and the and to chairmanships. to the ommendations to and willArchbishop appointments theFinance for Council, consultwith to soon theported Finance is as as Council Steeringpracticable. willThe rec- Committee make tee may act on Council,behalf theFinance of thattaken provided re- so all must actions be the pertainingters to administration the of emergency,Archdiocese. In an the Steering Commit- Steering shallThe the Committee offer Archbishop theChancellor and advice general on mat- A. The Committee Audit The Steering Committee The Committee The Investment CommitteeThe AdvancementInstitutional

 www.bostoncatholic.org Page Page · 2008 Financial Report for the Archdiocese of Boston of Archdiocese the for Report 90 · Financial 2008 ______February 12, February2009 12, Chancellor McDonough P. James ______February2009 12, ATTEST: ofBoston Archbishop Cardinal O’Malley,Seán Cap. O.F.M., ______APPROVED: Amendmentsquorum. effective become approval only by upon Archbishop. the present -thirds voteof the Finance Members at any of Council meeting atwhich there isa Charterto Amendments this shall writing advance be proposed in in may beby enacted and two a Article XII. the it to Archbishop. of Councilthe Finance bers will disclosureinteresta ofconflictsof complete annually submit and Council Finance shall The in adopt and keep at times all Interestforce Conflict of Policy.a Mem- XI. Conflict Article with legal business ence issues. Councilnance shall and who attorneys practicing members have are having members or experi- counsel. ofoutside tention Committee Legal shallThe include least at one Member the of Fi- and counsel the re- threatened or pending cluding legal employmentproceedings, the of in-house Legal AffairsThe shall Councilthe Committee advise on Archdiocesan legal Finance matters, in- F. with estateand/or general real credentials proven experience. business consist shall Committee leastone Memberof at of Council,the Finance and shall have members Committee shalltate alsoon real advise other requested. as estate Real matters EstateThe used be by for parishes the maintenance management, and disposition of Realfacilities. Es- The struction projects undertaken Archdiocese. by willresources and the It guidelines to recommend Real CommitteeEstate The shall develop and recommendguidelines management of for con- management, gardingmaintenance and the of propertiesdisposition by owned theArchdiocese. requires property consentofall real Council. the Finance that the It recommendpoliciesshall re- Real Committee Estate The shalland the assist adviseon leasingacquisition, and disposition of E. The AffairsThe Legal Committee The Real The Real Committee Estate

Amendments

of Policy Interest

 www.bostoncatholic.org