More NewsPope Francis Overhauls Vatican Finances

Pope Francis Overhauls Vatican Finances

Pope Francis has ordered a radical overhaul of the Vatican’s financial system, which involves the creation of a single authority to handle all business, administrative and personnel management at the Holy See.

The new Secretariat for the Economy is to be headed by Australian Cardinal George Pell, the archbishop of Sydney, who has in the past criticised the Vatican’s lack of financial transparency. It will draw up the annual budget, call on lay experts for advice and launch unannounced internal audits.

“If we make better use of the resources entrusted to us, we can improve our capacity to support the good works of the church, particularly our works for the poor and disadvantaged,” Pell said.

In a papal document known as a motu proprio, the pope decreed that Pell would work with a 15-member council consisting of eight senior prelates from various parts of the world, and seven lay experts “of various nationalities, with financial skills and acknowledged professional status.”

Francis has already hired independent firms such as Ernst & Young and KPMG to transform the Vatican’s complicated bureaucracy and address the financial scandals that have undermined the reputation of the Roman Catholic Church.

A statement from the Vatican pledged that the new body will help ensure “a more formal commitment to adopting accounting standards and generally accepted financial management and reporting practices, as well as enhanced internal controls, transparency and governance.”

An unnamed senior Vatican official, quoted by the
Financial Times
, told the paper: “The idea is to streamline the whole system, especially economic affairs, effectively appointing a minister of finance to pull everything together. There will be more transparency and more professional guidance. It is an ongoing process.”

The Secretariat for the Economy will not oversee the Institute of Religious Works, aka the Vatican bank, which in recent years has faced accusations of money laundering. The bank is already under review by another papal commission. Various reforms, including the closing of many accounts, are being overseen by the Vatican Financial Information Authority, which was set up in 2011 by Francis’ predecessor, pope Benedict.

The centralising of so many financial powers under the new secretariat represents the biggest change to the Curia, the Vatican administration, since pope John Paul II instigated reforms in 1988.

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