2. Principles of parish administration ​

General principles ​

The person in charge of administration ​

The general principle is that the Archbishop is responsible for administering the goods belonging to the Archdiocese, while the parish priest is responsible for those belonging to the parish.

Summary of canons and respective roles ​

It is the responsibility of the Archbishop to supervise carefully the administration of all goods that belong to parishes of the Archdiocese (c. 1276, §1).

In attending to this responsibility, the Archbishop issues special instructions for administration of church goods and property (c. 1276, §2). These instructions (norms) take the form of the Parish Finance Committee Statutes.

The parish priest is the administrator of the assets of the parish (c. 532). He is to carry out this task of administration in accord with the norms of canons 1281–1288.

In place of a parish priest, the Archbishop may appoint a parish administrator. All the financial responsibilities of a parish priest apply equally to parish administrators, with the proviso that no changes take place that would prejudice the rights of a subsequently appointed parish priest. References to parish priests in this Handbook include reference to parish administrators where appointed.

Canon 537 makes it obligatory that there be a parish finance committee (PFC) in each parish to assist the priest in fulfilling his responsibilities as steward of the property and financial assets of the parish.

The existence of the finance committee does not detract from the parish priest’s standing as the one who acts in the name of the parish (c. 532). However, such a committee provides the parish priest with valuable insight and advice, so that he may act more effectively in the interests of the parish.

Careful adherence to any instructions issued by the Archbishop is required by parish priests and finance committees. If Archdiocesan policy and canon law requirements are not complied with, a particular transaction may be invalid under canon law and possibly under civil law as well.

There are certain situations where canon law, through the norms issued by the Archbishop, requires a parish priest to consult with and obtain the advice of the PFC. The parish priest is not bound in any way to accept the PFC’s advice, even if unanimous; nevertheless, there must be some overriding reason for not doing so.

Parish priest responsibilities ​

In summary, under the Code of Canon Law, the parish priest’s responsibilities of administration are to:

• act within the limits and manner of ordinary administration, except where the Archbishop’s written permission permits otherwise. Without permission, the act is invalid (c. 1281, §1)
• arrange adequate insurance for parish assets and risks (c. 1284, §2, 1°)
• ensure that all relevant civil law is complied with in relation to parish property (c. 1284, §2, 2°).
• attend carefully to the wishes of the founder or donor of money or goods to the parish (c. 1284, §2, 3–4°°).
• at the proper time, make repayments of principal and interest payments on loans (c. 1284, §2, 5°)
• invest profitably any surplus monies (c. 1284, §2, 6°)
• keep accurate records of income and expenditure (cn. 1284, §2, 7°)
• draw up an account of their administration at the end of each year (c. 1284, §2, 8°)
• submit each year to the Archbishop an account of their administration (c. 1287, §1)
• securely preserve and archive all records relating to parish assets (c. 1284, §2, 9°). This includes preparing and signing a clear inventory of parish goods (whether immovable property or movable objects, whether precious, of some cultural value or other goods) (c. 1283, 2° and 3°)
• draw up each year a budget of income and expenditure (strongly recommended) (c. 1284, §3)
• observe civil laws in relation to contracts of employment (c. 1286, 1°)
• pay employees a just and honest wage (c. 1286, 2°)
• render accounts to the faithful concerning the goods that the faithful have donated (c. 1287, §2)
• not institute or contest proceedings in a civil court in the name of the parish without first obtaining the written permission of the Archbishop (c. 1288).

Parish finance committee ​

Introduction and background ​

Each parish is required by the Code of Canon Law to have a parish finance committee to assist the parish priest with his administrative duties.

Independent of the parish pastoral council, which is concerned with the pastoral responsibilities of the parish, the PFC assists the parish priest with the administration of parish goods. The roles of these parish bodies are distinct, and each must be careful to protect its proper responsibilities should they collaborate for any specific purpose.

The PFC is composed of parishioners who are chosen and appointed according to the Parish Finance Committee Statutes issued by the Archbishop. This Handbook further specifies its role.

The PFC is a collaborative structure, consultative in nature, and requires the presence of the parish priest for the validity of its proceedings.

The Church does not favour acts of financial administration by a single parish priest acting alone. This is particularly true where the parish priest is called upon to fulfil many other responsibilities.

The need for financial, civil law and canonical expertise is critical in a complex modern world. Where the relevant expertise cannot be found at parish level, it will be necessary to draw on the expertise of the Archdiocesan office staff who are available to PFC.

Role of the parish finance committee ​

The existence of the parish finance committee does not detract from the parish priest’s standing as the one who acts in the name of the parish. However, such a committee provides the parish priest with valuable insight and advice, so that he may act more effectively in the interests of the parish.

The PFC should comprise a minimum of three members, not including the parish priest. The number of members should be commensurate with the size of the parish. Nevertheless, it does not need to be large.

Careful adherence to any instructions issued by the Archbishop is required by parish priests and finance committees, especially in relation to transactions undertaken. If Archdiocesan policy and canon law requirements are not complied with, a particular transaction may be invalid under canon law and possibly under civil law as well.

There are certain situations where Canon Law requires a parish priest to obtain the advice of the parish finance committee. If advice is required, the parish priest’s act is invalid if he does not hear the PFC. The parish priest is not bound to accept the PFC’s advice, even if unanimous; nevertheless, there must be some overriding reason for not doing so.

Responsibilities of the parish finance committee ​

The parish finance committee's responsibilities are to:

• prepare the parish budget of income and expenditure in accordance with the direction given by the parish priest. The parish priest, in consultation with the parish pastoral council, should undertake a regular, if not annual, review of parish needs and priorities, and share their vision with the PFC

• assist the parish priest in the preparation of suitable annual reports to the parishioners concerning parish finances by 31 March following the end of each calendar year

• assist the parish priest in the preparation of long-term cash-flow estimates to provide for future capital works and major maintenance requirements

• assist the parish priest in the preparation of an annual financial report to the Archbishop, or provide the Archdiocesan Finance Office with access to the parish's accounting application files by 31 March following the end of each calendar year

• call the parish priest’s attention to any matters that seem to need more immediate action, such as:

  • consistent overspending in a particular area of the budget
  • any concerns for the long-term financial welfare of the parish if it incurs an annual deficit, or if maintenance of adequate surplus funds appears to be in question.

  Where a parish has incurred an operating loss in each of the past three financial years, amounting to the lesser of $100,000 or 50% of stable patrimony at the beginning of the first year, the PFC must develop a plan to restore the parish to a net-surplus operating position. A copy of the plan is to be provided to the Archbishop

• assist the parish priest in ensuring that all regulatory requirements are complied with

• assist the parish priest in identifying and managing areas of risk to the financial viability of the parish

• ensure that at meetings of the PFC, the parish priest presents the totals of income and expenditure since the last meeting and any significant facts relating to parish finances

• conduct a review of all parish insurance policies on renewal to ensure adequate insurance coverage exists. All insurances are to be placed with the provider approved by the Archdiocese.

• ensure that prior to the purchase, sale or lease of property, the approval of the Archbishop is obtained according to the requirements of Parish Finance Committee Statutes.

Legal liability of parish finance committee members ​

The members of the parish finance committee bear no civil legal responsibility by virtue of their membership. This is because of the nature of ecclesial governance and the way such governance is organised with respect to civil law. A ‘parish’ is a canonical entity (public juridic person), not a civil legal entity. As a required advisory body in canon law, it is not a board of management in the civil sphere and is not civilly responsible at law.

The parish priest, by virtue of his appointment by the Archbishop, is the person in church law responsible for the temporal goods and finances of the parish. The Roman Catholic Trusts Corporation for the Diocese of Melbourne (RCTC) is the civil legal entity that holds legal title in property canonically owned by the parish.

In all matters of legislative compliance that pertain to the parish, particularly in regard to its registration with the Australian Charities and Not-for-profits Commission, the ‘Responsible Person’ listed is the parish priest and never members of the PFC.

This places special responsibility on the parish priest to seek advice wisely, as he bears legal responsibility for the temporal affairs of the parish. It also places a serious moral responsibility on the members of the PFC to provide wise and honest advice on such matters.

Parish priests and PFC members have the benefit of a directors and officers liability insurance master policy arranged through the Archdiocese. See ‘Insurance’ in chapter 3 for more details on insurance cover.

Acts of parish administration ​

Canon law summary ​

The Church holds and administers temporal goods to serve the mission that the Lord has entrusted to the Church. The first point to be kept in mind, therefore, is that Church property never belongs to an individual person as if it were his or her own personal property. Church property always belongs to some juridic person and is the concern of the Christian community.

The canonical norms, therefore, structure the Church’s administration of property to facilitate the Church’s mission, to protect the rights of various Christian communities to the proper use of property entrusted to them, and to promote the welfare of those persons and groups who should benefit from the wise use of the goods that are made available to the Church.

Canon law describes four broad purposes for Church property:

• pursuit of divine worship
• support for clerics and other ministers
• performance of the apostolic works proper to the Church
• works of charity, especially concern for the needy (c. 1254, §2).

Canon Law distinguishes two types of acts of administration in relation to parishes:

• acts of ordinary administration
• acts of extraordinary administration.

In addition, there are specific canon law requirements in relation to:

• the alienation (transfer of ownership) of property
• the leasing out of parish goods.

Ordinary administration ​

Acts of ordinary administration are transactions and expenditures considered necessary for the daily and routine operation and maintenance of the property or work of the parish, including but not limited to:

• maintenance of church buildings
• payment of salaries and taxes
• acceptance of ordinary donations
• replacement of equipment and furniture
• collection of debts, rents and interest.

The parish priest does not require authorisation, or the advice or consent of others (e.g. PFC or Archbishop) to carry out such acts. However, with some decisions, he may choose to seek advice from the PFC, and it is recommended that parish priests refer to experts in relevant fields where required.

Extraordinary administration ​

Acts that are not acts of ordinary administration are considered to be acts of extraordinary administration. These acts require the parish priest to consult with the PFC and seek the Archbishop's approval before proceeding.

All correspondence with the Archbishop or the Executive Director Stewardship’s office relating to consultations with, or the work of, the PFC must be signed by the parish priest.

The Archbishop has determined, in accordance with canon 1281, §2, that the acts listed below are acts of extraordinary administration:

• any capital works and major refurbishment on a single project with expenditure exceeding $100,000 for parish projects and primary school projects and $300,000 for secondary colleges. These must be submitted to the Archbishop for his approval through the Archdiocesan Building and Property Commission. (Note that Melbourne Archdiocese Catholic Schools Ltd will submit the requests for approval of primary school and secondary college projects)
• sale and purchase of land
• other acts of alienation of a parish’s stable patrimony (property and fixed assets) where the value (not the sale price) is above the minimum amount published in the norms issued by the Australian Catholic Bishops Conference. As at June 2023, acts of alienation in excess of $35,966 require the approval of the Archbishop
• leasing of property and buildings for terms greater than three years
• adopting an ‘indemnity-only’ basis for insurance of parish buildings (that is, where insurance cover is limited to the cost of removal or demolition of the insured building)
• formation of any civil incorporation, or participation in any civil incorporation other than the RCTC
• initiating or contesting litigation in a civil forum in the name of a public juridic person (a parish or the Archdiocese)
• acceptance or refusal of bequests to which are attached some qualifying obligation or condition
• any borrowings outside of the Catholic Development Fund (CDF) and any borrowings with CDF greater than $100,000
• establishing investments of parish reserves greater than $100,000 outside of CDF.

For the above acts, the parish priest must first consult the members of the PFC. The parish priest must ensure the members are fully informed before convening the PFC.

Following consultation with the PFC, the parish priest must seek written permission from the Archbishop for such acts of Extraordinary Administration. The opinion of the PFC must be relayed to the Archbishop in the request for permission.

Before the Archbishop provides written approval, he may be required to seek the advice of the College of Consultors and/or the Diocesan Finance Council.

Alienation (sale or transfer of parish property/goods) ​

Alienation, simply defined, is the transfer of assets or rights over assets from one person to another with or without compensation. Normally, this will be through the sale or gifting of assets. Acts such as mortgaging, renting or leasing of property are not acts of alienation, however, these transactions themselves may constitute acts of extraordinary administration and therefore require consent and approvals as noted above. The concept behind alienation is that goods constituting the stable patrimony (1) of the parish (that is, of the juridic person) are destined to remain in the possession of the Church for a long or indefinite period of time, in order to provide security for the future through the preservation of value (c. 1294 §1 and §2).

A typical example would involve the sale of property and investment of the sale proceeds. Additionally, interest earned on the investment should be reinvested so as to maintain the real value of the asset. If the purchasing value is not maintained, it cannot be said that the future benefit has been preserved. Utilisation of sale proceeds of a property should not be applied to the general maintenance of other properties, as distinctions between items of capital (assets and liabilities) and revenue (income and expenses) need to be drawn.

This is not to say that permission to utilise the proceeds will be unreasonably withheld, providing it can be demonstrated that the capital is being converted into another asset.

It is the Archdiocese’s policy that the proceeds from the sale of real property and long-term investment assets, not otherwise applied to purchase replacement assets, be lodged with the Catholic Development Fund (CDF). Investment of sale proceeds outside of the CDF require the permission of the Archbishop in accordance with the prescribed norms in the Parish Finance Committee Statutes. The purchase of replacement assets may constitute an act of extraordinary administration thus requiring its own approval as outlined in ‘Extraordinary administration’ above.

As regards donations, it is most important that the intentions of the donors of goods to the parish are respected when a decision is made to alienate such goods (c. 1300). It may be prudent to consult with the donor, or their representative(s) to ensure their original bequest/donation intentions are not contravened.

Specific permissions are required whenever the value of goods being alienated exceeds the sum determined by law (c. 1291). In November 1984, the Australian Catholic Bishops Conference determined the minimum and maximum sums in relation to alienation and confirmed that:

• proposed acts of alienation by a parish in excess of the minimum sum require the Archbishop to obtain the consent of the Diocesan Finance Council, the College of Consultors and other interested parties prior to giving permission for the alienation
• where such proposed acts are in excess of the maximum sum, the Archbishop must also seek the permission of the Holy See (c. 1292, §2).

The minimum and maximum sums are indexed at 30 June each year in accordance with the Consumer Price Index. For the current amounts, refer to Amounts for alienation of temporal goods.

Leases ​

In November 1984, the Australian Catholic Bishops Conference further determined when the leasing out of parish assets required special permissions in accordance with canon 1297:

• For leases for periods in excess of nine years, the same permissions as for acts of extraordinary administration are required.
• For leases for periods greater than three years but less than nine years, the parish priest requires the consent of the Archbishop after having consulted the PFC. The Archbishop may consult the Diocesan Finance Council and the College of Consultors.

In addition, the Archbishop has determined that for leases for periods of three years or less, the parish priest must consult the PFC.

Invalid acts of administration ​

Parish priests act invalidly if they perform acts of extraordinary administration without prior written permission of the Archbishop (c. 1281, §1). Without this permission, the action is invalid at canon law and may also be invalid from a civil-law standpoint.

Civil law obligations ​

Ownership of property: canonical v civil ​

In civil law, all Catholic Church assets owned by the archdiocese or parishes are owned under the title of the RCTC, established as a body corporate under the Roman Catholic Trusts Act 1907 (Vic.). Physical land titles are held at the offices of the Archdiocese.

Any formal legal transactions (such as property transfers, lease agreements) of the Archdiocese or of its parishes must take place under the seal of the Trustees of the RCTC.

In canon law, all parish assets are owned by the parish.

Australian Charities and Not-for-profits Commission (ACNC) ​

Parishes are to maintain current registration as a charity with the ACNC, and ensure local credentials are maintained to access the ACNC’s Charity Portal. Parishes are to ensure details of the ‘Responsible Person’ (solely the parish priest) are maintained through the portal.

The Archdiocesan Parish Support Office is responsible for the bulk lodgement of the Annual Information Statement for all parishes. Parishes and the Archdiocesan Finance and Parish Support offices are to both have access to ACNC Portal records.

Australian Taxation Office (ATO) ​

Parishes are to maintain current registration as an income tax exempt charity with the ATO, and maintain local access to the ATO Business Portal. The Archdiocesan Finance and Parish Support offices will also maintain separate access as an authorised contact on each parish’s ATO accounts.

Parishes are to maintain up-to-date records of local authorised ATO contact persons and comply with various taxation obligations including:

• employee and minister of religion ‘pay as you go’ (PAYG) withholding tax requirements
• goods and services tax (GST)
• fringe benefits tax (FBT).

Parishes serviced by the Archdiocesan Parish Payroll Service will have their ATO PAYG withholding tax obligations, including Single Touch Payroll reporting requirements, met via the automated lodgement process through the Employment Hero platform.

Employment of staff ​

Parishes are required to observe the civil laws concerning labour and social policy (c. 1286, §1) including abiding by national employment standards and maintaining contracts of employment. Canon law also requires parish priests to pay a just and honest wage (c. 1287, §2).

Parishes are also expected to meet responsibilities generally expected of a good employer. This includes, for example:

• maintaining accurate and up-to-date position descriptions
• completing annual performance reviews and providing regular feedback to employees during the year
• following approved procedures for handling complaints or disputes.

The Archdiocesan Parish Payroll Service and Human Resources Office can assist parishes in meeting these obligations. See ‘Archdiocesan Human Resources Office’ in chapter 9 for further details.

Priestly vocation not an employment relationship ​

Priests are not employees of the parish or of the Archdiocese. They exercise their vocation in relationship with the Archbishop ‘voluntarily … based on their shared Catholic faith and acceptance of the authority of [the Catholic Church’s] institutions’.(2) Refer to ‘PAYG withholding tax’ in chapter 3 for separate information on the application of the PAYG withholding tax requirements to priests’ personal stipends.

Occupational health and safety ​

Victoria’s Building Regulations 2018 require building owners to maintain ‘essential safety measures’ so that they operate satisfactorily. There are different obligations under the Regulations, which depend on when the building was built or when building work occurred on the building.

Refer to chapter 5, ‘Essential safety measures’ for further details.

Safeguarding children and young people ​

Safeguarding is everyone’s responsibility. The safety and wellbeing of all persons are considered our highest priority in the Archdiocese of Melbourne.

The Archdiocese acknowledges that safeguarding children and vulnerable people requires proactive approaches across policies, procedures and practices within parishes, agencies and entities, consistent with the requirements of the:

• Commission for Children and Young People Act 2012 (Vic)

• Child Wellbeing and Safety Act 2005 (Vic)

  • Child Safe Standards
  • Reportable Conduct Scheme

• Children, Youth and Families Act 2005 (Vic)

  • Mandatory reporting

• Crimes Act 1958 (Vic)

• Sexual offences

• Grooming offence

• Failure to disclose offence

• Failure to respond offence

  • Privacy Act 1988 (Cth)

• Privacy principles and obligations

  • Worker Screening Act 2020 (Vic)

• Working with Children Checks and related offences

• National Principles for Child Safe Organisations (Australian Human Rights Commission)

• National Catholic Safeguarding Standards (Australian Catholic Safeguarding Limited)

• The Archdiocese’s Safeguarding and Wellbeing Policy for Children and Young People and the Safeguarding Children and Young People Code of Conduct

In fulfilling this responsibility, the Safeguarding Children and Young People Framework has been developed to guide the implementation of child-safety policies, procedures and practices within parishes, agencies and entities with the aim of promoting the safety of children and young people.

Clergy, employees and volunteers are required to abide by the requirements of the Archdiocese’s Safeguarding and Wellbeing Policy for Children and Young People.

Refer to ‘Safeguarding protections’ in chapter 8 for further details of parish obligations.

Communications and media ​

The parish priest and the Archdiocese’s Director of Communications and Media are the people authorised to communicate with the media in relation to parish matters. Priests are encouraged to first check with the Director of Communications and Media to assist in ensuring the messaging is consistent and accurate.

Media interest in events and people can be generated for all sorts of reasons. In the main, it is usually good, but there may be times when it is both challenging and concerning for the parish community.

Refer to Guidelines for issues management and media enquiries for guidance to parish priests for the handling of challenging issues relating to events or people and subsequent media enquiries.

Parish episcopal visitations ​

Purpose ​

Along with visits to parishes for various occasions (for example, anniversaries, Confirmations, blessings), each year the Archbishop and his delegates (auxiliary bishops and episcopal vicars) undertake episcopal visitations to a number of parishes and migrant communities within the Archdiocese. These visitations run for approximately three days (Friday–Sunday) and allow those undertaking them to spend valuable time in each of the communities they visit.

While fulfilling a canonical requirement (c. 396), the primary purpose of an episcopal visitation is pastoral, with the visitation providing an opportunity for the Archbishop, auxiliary bishops and episcopal vicars to meet and celebrate with communities. Visitations will vary depending on the individual community but will usually include time with clergy, staff, parishioners, ministry groups and school communities. A visitation also provides communities a valuable opportunity to come together, and reflect on and share their story—their history, ministries, engagement with others, opportunities for growth, current structures, planning for the future and any challenges.

The Office of the Archbishop coordinates episcopal visitations and will be in touch with parish communities as needed regarding scheduling and other related matters.

Annual financial report review ​

The Archdiocese does not require parishes to audit their financial statements. Instead, the Archdiocese’s Finance and Parish Support offices review the parish financial report in order to provide feedback and support to the parish and advice to the Archbishop as required.

It is preferred that the parish supplies the Finance and Parish Support offices with access to the accounting package data file so that a review of the records may be conducted and extra support and advice provided to the parish where necessary. For example, this may be particularly helpful for parishes in reconciling balances related to ongoing tax remittance obligations (e.g. PAYG withholding tax and GST) to their ATO running balance account records.

The Finance and Parish Support offices will also provide advice on the completeness of the financial records, particularly to ensure they reflect all parish activities generating receipts and payments.

Footnotes ​

1. According to Canon Law Society of America, New Commentary on the Code of Canon Law, 2000, p. 1495: ‘Stable patrimony is all property, real or personal, movable or immovable, tangible or intangible, that, either of its nature or by explicit designation, is destined to remain in the possession of its owner for a long or indefinite period of time to afford financial security for the future. It is the opposite of free or liquid capital which is intended to be used to meet operating expenses or otherwise disposed of within a reasonably short period of time (within one or, at most, two years). There are four general categories of stable patrimony: (1) real estate (land, buildings); (2) non fungible personalty (tangible movable property that is not consumed in its use, such as automobiles, furniture, books); (3) long-term (over two years) investments in securities (stocks, bonds, treasury notes); (4) restricted funds, that is, funds, even if comprised of cash or short-term securities, that have been set aside for a specific purpose, such as pension [retirement] funds or certain building or educational funds.’

2. Lucas et al., Church Administration Handbook, 2nd edn, 2018, p. 341.