February 11, 2013

July 31, 2014

Statement by Archbishop Apuron on FinancesWith the advice of the Finance Council and Deloitte and Touche for transparency and accountability, I wish to communicate the economic problems evidenced by the initial review of Archdiocesan entities. This step has not been taken lightly, as we have been trying to get information for some years from the entities involved but with no significant results.In particular, the report of Deloitte and Touche noted the following significant accounting deficiencies in The Catholic Cemeteries of Guam, Inc.:1.that The Catholic Cemeteries of Guam, Inc. had incorrectly included in its assets, land which was not in its own name; thus, overstating its assets, and using this property to secure a loan;

2.that construction costs were duplicated, incorrectly overstating its assets by $3.8 million, and that the construction contracts needed to verify the exact costs were missing. More than seven months after the report, construction documents showing the exact costs have yet to be produced.3.that the accounting is not in conformance with accounting principles generally accepted in the United States of America because there is no way to distinguish between what has been paid and what is due, and between principal and interest.

4.that depreciation was never recorded and we are dealing with an estimate which is unacceptable in accounting as it could involve a violation of fiduciary responsibility.

5.that The Catholic Cemeteries of Guam, Inc., did not allocate money for long term care liability, and this is not correct accounting. After almost one year this matter has not yet been corrected despite recommendation, causing an increase of liability of at least $800,000.

Deloitte and Touche concluded that since we dont know the correct amount of the long term care liability, we dont know the correct depreciation, we dont know the correct allowance for doubtful accounts, we dont know how much revenue in a specific year has been overstated an audit is at the moment impossible.Deloitte and Touche did not issue a report on the Cathedral but the Archdiocesan Finance Officer documented a series of accounting improprieties that can be produced as well.

(Page 2 Archbishop Statement)

This report is released, under the advice of Deloitte and Touche and the Archdiocesan Finance Council, to begin a process of reorganization and reordering. I am being proactive in moving the Archdiocese forward to ensure proper financial accountability and integrity. We are committed to fulfill our obligations and the intentions of our contributors.

Given the gravity of the situation, I was compelled to take urgent measures changing administration in order to end this state of affairs which is detrimental to the Archdiocese canonically and financially in the entities involved. This decision, contrary to speculations, deals only with the matter of good administration and my canonical responsibility with the management of archdiocesan temporal goods. As I have previously stated, we will release shortly the full financial reports and financial reviews for all diocesan entities.

As in the past, when we faced grave matters, I addressed them through a pastoral letter; this happened when we faced the danger of casinos being established on the island, or when I forbade the use of the Cathedral-Basilica and other Catholic churches for civil marriages, or when I addressed the issue of abortion and the defense of the family. I will soon publish a pastoral letter preparing us for the fiftieth anniversary for our Archdiocese. We Guamanians are renowned for our hospitality and dialogue. Let us begin all together the process of renewal, reconciliation, reordering and moving forward.

Servus Tuus,

/s/Most Rev. Anthony S. Apuron, OFM Cap., D.D.

Archbishop of Agana

Attachment: Deloitte & Touche Catholic Cemeteries Report

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