[From Austen Ivereigh in Rome]

Pope Francis has announced the biggest shake-up in Vatican administration for years by creating a new Secretariat for the Economy which will have oversight of all economic and administrative activities within the Holy See and the Vatican City State. The changes have been made via a motu propio, meaning on the Pope’s personal initiative.

The Secretariat, led by a cardinal prefect, will be responsible for preparing an annual budget, all financial planning as well as staffing, and will prepare detailed financial statements of the Holy See and Vatican State.

George Pell of Sydney

The Secretariat will be headed by Cardinal George Pell, the Archbishop of Sydney,  who since 2007 has sat on the so-called ‘Council of Fifteen’, the body which until now has overseen the financial affairs of the Holy See. Cardinal Pell is also a member of the “C8”, Pope Francis’s kitchen cabinet of advisors. According to the Vatican, “The Prefect of the new Secretariat for the Economy has been asked to start work as soon as possible.”

The Secretariat for the Economy will be answerable to a new Pontifical Council for the Economy, made up of eight cardinals or bishops drawn from across the world, together with seven lay experts of different nationalities with strong professional financial experience. The Council will meet regularly to consider policies and practices and to prepare and analyze reports on the economic-administrative activities of the Holy See.

There will also be a new post of Auditor-General, appointed by the Pope, with the power to conduct audits of any agency of the Holy See and Vatican City State at any time.

According to the Associated Press, “The change appears to significantly weaken the Vatican’s powerful Secretariat of State, which previously had administrative control over the Holy See while also handling diplomatic relations. That the new entity is called the Secretariat of the Economy would suggest some sort of hierarchical parity with the Secretariat of State.”

Today’s announcement follows a root-and-branch review  by the Pontifical Commission for Reference on the Organization of the Economic- Administrative Structure of the Holy See (COSEA), whose recommendations were last week considered and endorsed by the C18, during their three-day meeting with the Pope. They were also agreed by the “Council of 15” existing financial oversight board.

According to the Vatican press release, “COSEA recommended changes to simplify and consolidate existing management structures and improve coordination and oversight across the Holy See and Vatican City State. COSEA also recommended more formal commitment to adopting accounting standards and generally accepted financial management and reporting practices as well as enhanced internal controls, transparency and governance.”

The press release also said that the changes “will enable more formal involvement of senior and experienced experts in financial administration, planning and reporting and will ensure better use of resources, improving the support available for various programs, particularly our works with the poor and marginalized.”

This is the first major structural reform announced by Pope Francis, which is intended to root out corruption and inefficiency in the Vatican’s finances, both of which were highlighted during the ‘Vatileaks’ scandal of late 2012.

Cardinal Pell has been a longstanding advocate of structural reform in Vatican finances, and a critic of curial incompetence.

Today’s announcement did not mention the so-called ‘Vatican Bank’, the Instituto delle Opere delle Religioni (IOR), which was also the subject of a report presented to the C8 last week. According to the Vatican press release, two existing bodies  — APSA, the Administration of the Patrimony of the Apostolic See, known as the ‘Vatican central bank’; and the AIF, or Financial Administration Authority, which has a watchdog role within the Vatican — are unaffected by the announcement.

FULL TEXT OF MOTU PROPRIO 

This is the full text of Pope Francis’ Apostolic Letter issued Motu proprio, “Fidelis et dispensator Prudens”, dated 24 February.

“Like a faithful and prudent manager who has the task of carefully looking after what has been entrusted to him, the Church is aware of her responsibility to protect and manage her assets, in the light of her mission of evangelisation and with particular care for those in need. In a special way, the management of the economic and financial sectors of the Holy See is intimately linked to its specific mission, not only in the service of the universal ministry of the Holy Father, but also in relation to the common good, with a view to the full development of the human person.

After having carefully consulted the results of the work of the Commission for Reference on the the Organisation of the Economic-Administrative Structure of the Holy See (cf. Chirograph of 18 July 2013), and after consultation with the Council of Cardinals for the reform of the Apostolic Constitution ‘Pastor Bonus’ and with the Council of Cardinals for the study of economic and administrative problems of the Holy See, by this Apostolic Letter issued Motu proprio, I adopt the following measures:

COUNCIL FOR THE ECONOMY

1. The Council for the Economy is hereby instituted, with the task of offering guidance on economic management and supervising the structures and the administrative and financial activities of the Dicasteries of the Roman Curia, of the Institutions connected to the Holy See, and of Vatican City State.

2. The Council for the Economy is composed of fifteen members, eight of whom are nominated from among the Cardinals and Bishops in order to reflect the universality of the Church, and seven of whom are lay experts of various nationalities, with recognised professional financial competences.

3. The Council for the Economy shall be presided over by a Cardinal coordinator.

SECRETARIAT FOR THE ECONOMY

4. The Secretariat for the Economy is hereby instituted, as a Dicastery of the Roman Curia in accordance with the Apostolic Constitution ‘Pastor Bonus’.

5. Notwithstanding the provisions for the Council for the Economy, the Secretariat will report directly to the Holy Father and will undertake the economic audit and supervision of the Bodies indicated in point 1 above, along with the policies and procedures regarding procurement and the allocation of human resources, respecting the competences of each Body. The competence of the Secretariat will extend to all matters that in any way fall within this area.

6. The Secretariat for the Economy shall be presided over by a Cardinal Prefect, who shall collaborate with the Secretary of State. A Prelate Secretary General will assist the Cardinal Prefect.

AUDITOR GENERAL

7. The Auditor-General shall be appointed by the Holy Father and shall prepare the audit of the accounts of the Bodies referred to in point 1.

THE STATUTES

8. The Cardinal Prefect shall be responsible for drawing up the definitive Statues of the Council for the Economy, the Secretariat for the Economy, and the Office of the Auditor-General. The Statutes shall be presented quam primum for approval by the Holy Father.

I dispose that all that is established herein have immediate, full and permanent value, abrogating any incompatible measures, and that the present Apostolic Letter issued Motu proprio be published in the Osservatore Romano of 24 February 2014 and subsequently in the Acta Apostolicae Sedis.

Given in Rome, St. Peter’s, on 24 February of the year 2014, the first of my Pontificate.”