The Church has begun a “vicious circle” of eating into its capital assets after its reserve funds evaporated due to soaring expenditure, including last year’s €1 million papal visit.

This is a vicious circle

Publishing the Church’s financial report yesterday, pastoral secretary Fr Charles Cordina said a team of experts was being consulted to see how the Church could keep providing the services it offers.

The Church doubled its annual deficit between 2009 and 2010, according to the financial report. In 2009, when it announced it only had one year’s worth of reserve funds remaining, the Church lost €869,555 while the loss for 2010 added up to €1,750,545.

“We are not borrowing money but we are eating into our capital assets (investments, funds etc...) and this is a vicious circle,” financial controller Robert Agius said.

Fr Cordina explained that donations from the public were falling steadily, following the trend of declining Mass attendance. Meanwhile, a drop in vocations is causing the Church to replace priests and nuns with paid professionals in many of its institutes. Salaries make up the greatest expense.

In addition, the Church’s ageing properties require constant maintenance, modernisation and renovation.

Much as some people thought the Church’s financial woes could be solved by selling off or renting some of its property, Fr Cordina pointed out that most buildings could not be sold because they were inherited on condition they were used for charitable purposes.

The only positive side to the accounts was that operational costs had gone down, due in part to higher efficiency within the Church, where priests were being more careful in their use of stationery and utilities, according to Fr Cordina.

He denied the suggestion that the precarious financial position had anything to do with the Curia’s decision not to pay compensation to the victims of sexual abuse at the hands of priests.

Last year the Church had to cope with the “extraordinary expense” of Pope Benedict XVI’s visit. In March of last year, Fr Cordina had estimated that the Pope’s visit would cost €500,000 – less than half of the actual expenditure.

Questioned over this discrepancy, Fr Cordina told The Times the original estimate, which was given during a visit to the Floriana Granaries, was limited to the costs of the Papal Mass.

“It was then taken to be the total cost, when in fact it did not even cover the entire event,” he said, adding that costs were also raked up at the events in Rabat and at the Waterfront in Valletta. The bulk of the costs included audiovisual equipment and printing.

The final net expenditure of €1,083,479 was calculated after deducting around €200,000 in income made primarily from the selling of souvenirs.

“We did not spend money capriciously on dinners, for instance... we spent money to help people participate better.”

Although this does not feature in the financial report of 2010, this year the Church also spent €180,000 on the anti-divorce campaign. When questioned, Fr Cordina would not say whether public donations had risen or not since then. “We’ll have to see next year,” he said, adding that the information still had to be gathered. Meanwhile, the Church spent €445,871 on its Ecclesiastical Tribunal.

At the end of the press confe­rence, the Curia’s administrative secretary Fr Anton Portelli told reporters to remember this figure next time a retired judge claimed the Church made money from its tribunals – a dig at retired Judge Philip Sciberras who in the heat of the divorce campaign had said the Church was campaigning against divorce to preserve its power and riches.

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