VATICAN CITY (RNS) — Pope Francis continued his cleanup of Vatican finances by stripping the powerful department of the Secretariat of State of its financial assets, the Vatican announced Monday (Dec. 28). The funds had come under scrutiny in 2019 after a questionable investment in luxury apartments in London.

The new papal decree will shift the funds held by the Secretariat of State to the Administration of the Patrimony of the Holy See, or APSA, which already handles the Vatican’s investment portfolio and real estate holdings. APSA will also oversee the pope’s personal account and Peter’s Pence, a global fund to sustain the pope’s charitable actions.

While the Secretariat of State “represents an essential reference point for the activities of the Roman Curia,” the pope’s decree reads, “it’s not appropriate for it to perform those economic and financial functions already attributed to other competent departments.”

While APSA is considered among the Vatican’s least transparent entities, it has earned Francis’ trust after he appointed Bishop Nunzio Galantino, a trusted ally, as its head in June 2018.

Once transferred to APSA, the Secretariat of State accounts will be reviewed by the Secretariat for the Economy, an agency created by Pope Francis in 2014 to spearhead his financial reform. The Secretariat for the Economy, led by the Rev. Juan Antonio Guerrero, a Jesuit priest, will also act as an adviser to the pope on economic and financial matters.

The Secretariat of State has until Feb. 4 to send all its liquid assets to the APSA account for the “General Budget of the Holy See.” It will no longer exercise financial oversight of other Vatican departments, the papal decree states, suggesting that the administrative offices of the Secretariat of State should be reorganized or perhaps even eliminated.

The Secretariat of State, established in the 15th century, is one of the most powerful departments of the Vatican, and for centuries has overseen everything from church administration to the Vatican’s diplomatic affairs. It controls the papal seal and other ancient symbols of pontifical power.

Reforms under Pope John Paul II split it into two separate agencies, one to manage internal affairs and the other tending to foreign relations. In 2017 Pope Francis added the Section for Diplomatic Staff, an administrative office that oversees the appointments of papal nuncios and related posts.

While the Secretariat of State’s power will still be considerable, the Secretariat for the Economy and APSA will be strengthened by the new decree.

In 2019 media outlets reported a 2014 investment of over $200 million of Vatican funds from the Secretariat of State into luxury buildings in London’s Chelsea neighborhood. A Vatican probe into the investment deal led to the suspension of five Vatican employees last year and is thought to be what led Pope Francis to remove the privileges of Cardinal Angelo Becciu, who served as substitute of the Secretariat of State, a top deputy to the secretary of state, from 2011 to 2018.

Francis had already launched his reform of the Vatican’s finances, Galantino said in an interview with media on Monday, but “the question of the London real estate helped to understand what control mechanisms had to be strengthened.”

“We learned many things because of it: not only how much we lost — an aspect that we are still evaluating — but also how and why we lost it,” the bishop added.

Some media reports suggested that some of the funds for the real estate deal were taken from Peter’s Pence, donations made by individual Catholics around the world. Becciu vehemently denies the use of Peter’s Pence along with all other accusations.

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“Concerning Peter’s Pence, the pope always asked that there be a more marked distinction from other available funds,” Galantino said.

In a letter last August to the current secretary of state, Cardinal Pietro Parolin, Francis signaled his intention to shift financial control from the Secretariat to APSA and made clear that any move should not be interpreted as disapproval of its current leadership.

“The Secretariat of State is with no doubt the Dicastery that most closely and directly supports the pope’s activities,” the pope wrote to Parolin, while emphasizing the need to ensure transparency in the Vatican’s financial dealings.

The pope expressed particular concern about the London deal in the letter and urged that the Vatican exit the investment as soon as possible to avoid “reputational risks.”

Vatican spokesman Matteo Bruni told journalists that Francis met with Parolin; Archbishop Edgar Peña Parra, Becciu’s successor as substitute of the Secretariat of State, Galantino; Guerrero; and the secretary-general of the Governatorate of Vatican City State, Bishop Fernando Vérgez Alzaga, to discuss the reform on Nov. 4.

This new decree is only the latest move to reshape how the Vatican manages and invests money. Pointing to efforts made by Francis’ predecessor, Emeritus Pope Benedict XVI, Galantino said, “It’s a journey that started a while ago.”