In a significant step toward full financial transparency, Archbishop Seán P. O’Malley has announced a timetable for the release of financial reports of all entities under direct control of the Archdiocese of Boston.

“A year ago I assured the people of the archdiocese that we would have full transparency, disclosure of our economic situation,”the archbishop said in a letter published in this week’s Pilot.

“We are doing this to help the Catholics in the archdiocese to understand the seriousness of the challenges the archdiocese faces and to reassure them that the parish closings are not a result of the sex abuse settlements,”he said.

“This commitment was motivated out of respect for people of the archdiocese as donors and members of our Church and to demonstrate to the general public that the archdiocese is fulfilling its fiduciary responsibilities,”the archbishop continued.

In the past, only the finances of the Central Funds of the archdiocese were publicly disclosed.

In an Oct. 19 interview with The Pilot, the archbishop said, “There is a whole gamut of thought out there. On the one hand people who feel that the Church has all kinds of money hidden away some place and people, on the other side, who think we are wasting money or using it for things secretly. That’s not the case.”

“We would like to be able to dispel a lot of the myths that have been created about the Church’s finances,”he continued.

In his letter, the archbishop also sets a goal of a balancing the archdiocesan budget by fiscal year 2008 and promises “a full accounting of payments related to sexual abuse settlements and the sources of these funds.”

The expanded reports, expected to be released before April 2006, will contain “consolidated audited reports for fiscal years 2004 and 2005 with full disclosure and explanation of the archdiocese’s organizational structure, including Corporation Sole,”according to the letter. It will also include financial reports from all parishes in the archdiocese with an assessment of their condition in fiscal year 2005.

The Corporation Sole encompasses the archdiocesan entities that are not separately incorporated. It includes, according to Chancellor David Smith, the Central Funds, all the parishes of the archdiocese, a “small”endowment fund and the property and casualty self-insurance funds.

Corporation Sole does not include the lay or clergy pension funds, health and disability funds, the Regina Cleri residence for retired clergy, the two seminaries, the Catholic Cemeteries Association, Boston Catholic Television, Caritas Christi Health Care or Catholic Charities. According to Smith, these other entities already provide their own annual financial reports.

In his letter, the archbishop explains the ongoing efforts to prepare a strategic plan for the archdiocese to address the current financial difficulties and “assist us in planning for the future.”He expects the report to be ready in the first half of 2006.

“We must also identify ways to improve and expand our fundraising. Without a significant increase in fundraising we will have to make ever more difficult choices regarding the funding of many programs and services,”the letter says.

Commenting on the strategic plan and the goal of balancing the budget, Smith said that “the strategic plan cannot be that we continue to lose money on our operations every year and that we sell assets to pay for it.”

“That is not a viable strategy for us and the planning process will have to deal with finding some way that the budget can be balanced. You can’t just spend more than you take in every week,”Smith said.

The letter also announces that every November each parish will publish “an unaudited but complete accounting of its financial condition, including assets and liabilities as of the preceding June 30.”The new reporting will begin in 2006.

Every parish will be audited every three years.

In November 2004 the archbishop issued a letter in which he explained that the financial woes of the archdiocese were “worse than many may have thought.”

He explained that annual income to the archdiocese had dropped by 50 percent after the sexual abuse scandal and that the declining stock market had left the archdiocese with an unfounded pension liability of $80 million. Despite $14 million in budget cuts over the previous three years, the archdiocese was operating under an annual $10 million deficit and a $35 million loan taken out in 2002 had been exhausted and needed to be repaid, he said.

According to Smith, the operating deficit was reduced to $8 million for fiscal year 2005.

There have been increasing calls for the archdiocese to release details of its finances after some questioned the use of Easter and Christmas collections for clergy and Secretary of State William Galvin made a formal complaint against the archdiocese for an alleged mismanagement of cemetery funds earlier this year.

At the time those accusations were made, Chancellor Smith told The Pilot that in each instance, they were unfounded.

The archbishop said that Boston Catholics may not fully realize the need of those works of mercy and evangelization that are funded through the Corporation Sole.

“Many things are taken for granted; the fine work of the hospital chaplains, the university campus ministry, so many other things like that, ... unless your life is touched by this, you probably are unaware of it,”he said.