Rules for Vatican finance offices include protection for whistleblowers

VATICAN CITY -- New rules governing the guidance, oversight and control of Vatican financial and administrative activities include the power to levy sanctions and take "civil or criminal action" in cases of "damage to assets," as well as providing protection for whistleblowers raising red flags about "anomalous activity."

The provisions were detailed in separate statutes for the Council for the Economy, the Secretariat for the Economy and a "general auditor's office," which will be staffed by three lay experts.

The Vatican published the new statutes in Italian on its web site March 3; they went into effect March 1. Pope Francis approved the statutes on a trial basis for an unspecified period of time.

The establishment of the council and secretariat were announced in February 2014. Officials said it took a full year to develop the statutes because they had to be reviewed by the Pontifical Council for Legislative Texts. A key issue reportedly was to ensure adequate checks and balances.

The statutes officially define the nature, role, responsibilities and organizational structure of each of the three bodies; outline channels of command and accountability; designate English and Italian as the new offices' working languages; and emphasize the need to keep data and documents confidential.

The statutes codify the mission of the three bodies as part of a major overhaul of the Vatican's accounting and budgeting procedures, and make clear that both the Secretariat for the Economy and the auditors report to the Council for the Economy.

The auditing office, made up of a general auditor and two assistant auditors, will have the power to audit any Vatican office or body "in full autonomy and independence, and following the best practices recognized internationally concerning public administration."

The auditor's office will be the body that receives and investigates any signs of corruption, fraud and "anomalous activity" or irregularities concerning financial activities, budgeting, bookkeeping and the offering of outside contracts or services.

"The general auditor guarantees the confidentiality, integrity and security" of documents and information associated with suspected activities and "protects the identity" of those signaling any potential problems unless revealing the whistleblower's identity becomes necessary in carrying out an investigation or trial.

The Council for the Economy, the statutes say, is dedicated to devising best practices, according to international standards, for more ethical, effective and transparent financial management and administration "in light of the Gospel" and Church social doctrine.

The council -- which is made up of 15 members -- will be charged with inspecting the budget forecasts and final budgets of all dicasteries, offices and organizations of the Holy See and Vatican City State. The council will prepare "recommendations for them and submit them to the Holy Father for approval."

The council will also examine annual "risk assessments" concerning the Vatican's holdings and finances.

The council will have the authority to request information from every office, including the Financial Intelligence Authority and the Vatican bank, and will examine annual reports from the general auditor.

The council members, appointed to a five-year term by the pope, will include eight cardinals or bishops and seven lay experts, all of nationalities to "represent the universality of the Church."

The Secretariat for the Economy, currently headed by Australian Cardinal George Pell, will act in collaboration with the Secretary of State and is in charge of "supervision and vigilance" over all administrative and financial activities at the Vatican. It is charged with implementing the norms and suggestions made by the Council for the Economy.

The secretariat will "monitor activities of the dicasteries" and other Vatican agencies, making sure they carry out their activities "efficiently" and "prudently" while funding pre-approved programs and projects. Spending must follow approved budget plans and bookkeeping should conform to the new norms.

Cardinal Pell's office will provide assistance and support to all Vatican offices and organizations so they can implement standardized norms and procedures and better manage their financial and administrative affairs. It will have the authority to conduct onsite "checks" at any Vatican office.

If the secretariat discovers any "possible damage" to assets or to the Vatican "patrimony," it can make sure corrective measures are taken or "where opportune, civil or criminal action and administrative sanctions."

To ensure a better separation of powers, the secretariat will have to maintain two separate sections each headed by a "prelate secretary" with one dealing with the Vatican's administrative activities and the other with financial oversights and controls. It added that during a "sede vacante," the interim period before the election of a new pope, the two secretaries, and not the prefect, will govern the secretariat.

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