Pope Francis issues a law to reorganize Vatican finances

Pope Francis issued a new law on Monday reorganizing Vatican finances following a series of scandals.

In a document issued on December 28, the pope formalized the transfer of financial responsibilities from the Vatican Secretariat of State to the Administration of the Patrimony of the Apostolic See (APSA), which acts as the treasury of the Holy See and manager of the sovereign patrimony.

He first announced the shock in an August 25 letter to Vatican Secretary of State Cardinal Pietro Parolin that was made public on November 5 after the Secretariat of State was engulfed by allegations of financial mismanagement.

The pope promulgated the new law in an apostolic letter motu proprio ("of his own impulse").

The text, titled “A Better Organization,” also establishes new rules for the supervision of Peter's Pence, an annual worldwide collection in support of the Pope's mission.

Vatican officials were forced to deny that the money raised for Peter's Pence was used to cover losses on a controversial London real estate deal overseen by the Secretariat of State.

The document, signed on December 26 and entered into force before the start of the new Vatican fiscal year, contains four articles. The first concerns the transfer of investments and liquidity from the Secretariat of State to the APSA. The second regulates the management of papal funds. The third provides for "provisions on economic and financial monitoring and supervision" and the fourth concerns the functioning of the administrative office of the Secretariat of State.

Under the new law, APSA will acquire ownership of funds, bank accounts and investments, including real estate, previously administered by the Secretariat of State from January 1, 2021.

The management of the new responsibilities of the APSA will be subject to the “ad hoc control” of the Vatican Secretariat for the Economy, established in 2014 to oversee the financial activities of the Holy See and the Vatican City State. In the future, the Secretariat for the Economy will also act as the Papal Secretariat for economic and financial matters.

The law requires the Secretariat of State to "transfer as soon as possible, and no later than February 4, 2021", all its liquidity held in current accounts with the Institute for Works of Religion, commonly known as the "Vatican bank" and foreign banks.

The law asks APSA to create a budget provision called "Papal Funds" which will be included in the consolidated budget of the Holy See. It will contain a sub-account called “Peter's Pence”. Another sub-account, called the “Holy Father's Discretionary Fund”, will be managed exclusively under the direction of the pope. A third sub-account, known as “Authorized Funds”, will be created for funds that “have a particular destination restriction by the will of the donors or by regulatory provision”.

The motu proprio gives the Secretariat for the Economy, led first by Cardinal George Pell and now by Fr. Juan Antonio Guerrero Alves, SJ, supervisory powers over entities previously overseen by the Secretariat of State. Various Vatican entities will send their budget and final balance to the Secretariat for the Economy, which will then pass them on to the Council for the Economy, founded in 2014.

The text also states that the administrative office of the Secretariat of State should maintain "only the human resources necessary to carry out the activities related to its internal administration, budget preparation and budget and other non-administrative functions carried out so far", and the transfer archival material relevant to the APSA.

The Holy See press office declared on December 28 that the motu proprio converts the decisions contained in the pope's August letter to Parolin into law, which led to the creation of a commission that oversees the transfer of responsibilities from the Secretariat of State to the APSA. The press office explained that the commission "will continue to clarify some technical details until 4 February, as planned".

"This new law reduces the number of economic leaders of the Holy See and concentrates the administrative, managerial, economic and financial decisions that correspond to the purpose in the dicasteries," said the press office.

"With it, the Holy Father wishes to proceed to a better organization of the Roman Curia and to an even more specialized functioning of the Secretariat of State, which will be able to help him and his successors with greater freedom in matters of greater importance for the good of the Church".

He added that the motu proprio "also establishes greater control and better visibility of Peter's Pence and of the funds that come from donations from the faithful."