Comments About Vatican's Financial Statement for 2001

Annual Reported Presented by Cardinal Sergio Sebastiani

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VATICAN CITY, JULY 5, 2002 ( The Vatican’s Financial Statement for the year 2001 was presented by Cardinal Sergio Sebastiani today in the Vatican Press Office. The cardinal is the president of the Vatican’s Prefecture of Economic Affairs.

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In this customary meeting with you, I am pleased to present the Consolidated Financial Statement of the Holy See for the fiscal year 2001, the last to be reported in Italian lire.

As a consolidated financial statement, it represents collectively the expenses and income of the various Vatican administrations included in the consolidation. These are the Administration of the Patrimony of the Holy See (APSA) — which is the largest — the Congregation for the Evangelization of Peoples, the Apostolic Camera, Vatican Radio, the Osservatore Romano / Vatican Press (combined with regard to administration), the Vatican Television Center, and the Vatican Publishing House.

As you know, for the world economy, the year 2001 has been highly difficult. Our financial statement for 2001 has registered this fact, with a deficit of 6.727 billion lire (equal to US $3.062 million at the rate of exchange at the close of 2001 of 2,197.06 lire per dollar, and equal to 3.474 million euro), resulting from total expenses of 387.972 billion (equal to US $176.587 million and to 200.371 million euro) and total income of 381.245 billion (equal to US $173.525 million and to 196.897 million euro). In comparison with the preceding fiscal year, the expenses diminished by 16.406 billion lire or 4.1%, while the income diminished by 40.853 billion, or 9.7%.

The negative result, which follows a period of surplus statements, is caused by various factors:

— the sharp fall in income from the financial sector (within which the revenues from securities and, above all, from fluctuations in the rate of exchange) decrease;

— the increased expenses of institutional activity (higher costs of real estate maintenance, higher costs of Apostolic Nunciatures);

— the increase in expenses of the media companies.

With this introduction, I pass now to the analysis of the principal entries of the operating statement, which are expressed, as is the custom, in the following four sectors, according to relatedness of activities.

1) Institutional activity.

This sector encompasses all the Dicasteries of the Roman Curia (Secretariat of State, Congregations, Councils, Tribunals, the Synod of Bishops and various Offices); these assist the Holy Father closely in his ministry as Universal Pastor at the service of the Particular Churches and also for the benefit of humanity as peacemaker in the world of today. Since this sector concerns organs that are called to render service, it does not generally produce income. From this is derived the rationale for Canon 1271 of the Code of Canon Law, which invites the Bishops to freely meet the financial needs of the Holy See, according to their means, in order to make it possible for it to give service to the Universal Church, in the same way as, according to Canon 1263, the diocesan curiae are sustained by the free offerings coming from the parishes.

In 2001, the revenues derived from these offerings reached the sum of 45.402 billion, with in increase of 2.183 billion or 5.05% over the year 2000. To these revenues are added the contributions of religious institutes and, above all, those of foundations, associations, other Catholic entities, and individual faithful, who together gave a sum of 82.109 billion. With regard to expenses, amounting to 199.642 billion, I would like to underline that the increase was caused not only by the ever-increasing cost of personnel but also by greater general and administrative expenses and by maintenance and construction of new Apostolic Nunciatures. This important sector therefore closed with a deficit of 63.484 billion, the total income having been 136.158 billion.

2) Financial Activity.

This sector includes the financial activities of the seven consolidated administrations of which the most important is the Extraordinary Section of the Administration of the Patrimony of the Holy See (APSA). The result in this sector amounted to 63.745 billion, less by approximately 50% than that registered for 2000. This is attributed to the unfavorable course of the world economy during the year, heavily aggravated by the attacks of 11 September. The course of ups and downs of the markets produced income from sales of securities of 20.3 billion (compared with 47.7 in 2000) and reduced the net positive margin on fluctuations in the rate of exchange from 30.5 billion in 2000 to 1.1 billion in 2001. As a whole the sector registers expenses of 47.019 billion against income of 110.764 billion.

3) Real Estate.

The real estate sector in 2001 had total expenses of 59.581 billion and income of 84.526 billion, thus closing with a gain of 24.945 billion, lower by more than 4.9 billion than that of 2000, due to the greater expenditures for maintenance and repairs (up 20% compared to 2000).

4) Media Institutions.

The activity of the Media Institutions connected with the Holy See registers an increase in deficit. From 37.711 billion in 2000 the deficit rises to 41.895 in 2001, the result of total expenses of 81.730 billion against income of 39.835 billion. In contrast to the preceding fiscal year, which registered some improvement traceable to the Jubilee Year, these organs present signs of general sluggishness.

The last part of the operating statement addresses various income and expenses which present a positive result of 9.962 billion (compared to a negative result of 41.946 in 2000). This positive result can be attributed in large part to the extraordinary income from the recuperation of a fund created to cover the eventuality of a negative judgment in a lawsuit that has since been resolved, as well as from the cancellation of expired debts.

After having submitted the financial statement to the examination of the Council of International Auditors, I had the privilege of presenting the Consolidated Financial Statement for the Holy See for 2001 to the Holy Father in the course of an audience granted to me on July 2, 2002 and to present it to the Council of Cardinals for the Study of the Organizational and Economic Problems of the Holy See, which held its meetings yesterday. The financial statement will now be translated in various languages and sent to the Bishops and Superiors General of Religious Institutes.

[text distributed by Vatican Press Office]

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