The archdiocese spent $524,797 on expenses related to the issue in the fiscal year that ended in June, according to a newly released audit.

Brian Reynolds, chancellor and chief administrative officer for the archdiocese, said the total, though dramatically down from the $27 million paid in legal settlements and other costs from the previous fiscal year, still represents "a significant outlay of funds."

"It has a real financial impact on our operations," Reynolds said.

The archdiocese drastically cut its budget and staff and shifted costs to parishes to recover from the initial payout, and Reynolds said the situation continues to improve. The archdiocese has postponed a scheduled increase in assessments on parishes, and it has resumed paying for certain employee insurance benefits after a year of requiring parishes to cover them.

"Our fundamental principle is strong parishes make a strong archdiocese," he said. "We were very concerned that another assessment increase was going to hurt parishes to a greater degree than it was going to help us."

The audit did not measure donations to parishes, which Reynolds said is mixed depending on parish, though overall parish income is up because of school tuition increases and growth in revenue from other sources.

One measure of giving - the annual Catholic Services Appeal - raised $2.7 million, falling short of its $3 million goal. Reynolds said he was still pleased with that amount, citing the tight economy and the archdiocese's efforts to regain trust after the abuse crisis.

The Rev. Bill Medley, pastor of St. Joseph Church in Bardstown, said donations have increased modestly at his parish and at others.

"For the most part in 2003 and 2004, people have looked beyond whatever hurt and betrayal they felt about that (abuse crisis) and resumed their normal spirit of giving," said Medley.

The archdiocese paid $25.7 million between July 2002 and June 2003 to settle lawsuits filed by 243 victims of sexual abuse by priests and others associated with the church. The archdiocese settled subsequent lawsuits individually.

The lawsuits maintained that the archdiocese had placed priests in ministry whom it knew had sexually abused children and that it had not warned parishioners.

Reynolds said the continued cost of the abuse crisis has prevented the archdiocese from being able to fill the nearly 50 positions it cut last year.