In a Vatican News op-ed Feb. 9, Vatican spokesman Andrea Tornielli, said the norms give the auditor more authority to review financial records than he previously had.
What is the guiding principle of the reform, then?
In the first place, the new statutes fulfill the Holy See’s international agenda by placing the auditor in the context of international law governing financial oversight. The statutes describe the auditor as the “anti-corruption authority,” a term that complies with the United Nation’s Mérida Convention, the anti-corruption multilateral legal tool the Holy See signed in 2016.
The Mérida Convention also provides some rules to control public procurements. The Holy See complies with those norms by giving the auditor the task to “review particular situations about: anomalies in the employment or attribution of material and financial resources; irregularities in assigning public procurements or in operating transfers or alienation of goods; acts of corruption and fraud.”
The issue of public procurements is crucial in the Vatican, where there is no market, nor private sector.
The statutes and rules of reporting harmonize the work of various entities involved auditing the Vatican finances. All of these entities are now given a specific and well outlined task.
The auditor is also requested to “inform the Council of the Economy via the review committee of the council, about mishandling it might find out,” and to send “a report to the Financial Intelligence Authority when there are grounded reasons to suspect that funds, goods, activities, economic initiatives or transactions are connected to money laundering or financing of terrorism.”
The auditor must also report the “the Vatican City State’s judicial authority every crime detected during its activity”.
The statutes also commit the auditor to “report every three month to the review committee of the Council of the Economy on its work done and ongoing.”
The statutes also regulate the activities of external auditors and subject them to clear oversight,
The issue of using external auditors has been a point of discussion since 2016. At issue was the question of whether, given that Vatican City is a sovereign state, and not a company, it is appropriate that its financial books undergo external auditing.
The Holy See’s sovereignty insists on the independent, albeit small, territory of the Vatican City State, which like any other independent nation has its internal jurisdiction and legislation, and is involved in international relations.
This sovereignty implies that the Vatican dicasteries are considered on par with the ministries of any other country – which includes a level of confidentiality in handling their budgets.
The discussion was about how introduce international accountability standards within a state system, finding a balance between the needs of a manager and those of a governor.
This discussion led to the new statutes. In a first phase, the Vatican financial reform marked certain discontinuity, and raised some issues. As a response, the reforming process was not halted, but was rather included in a wider framework, which involves the Curia and the Vatican City State.
The next step will be that of appointing a general auditor. Between 2015 and 2017, Libero Milone was the auditor, but he was fired after grave allegations of espionage and embezzlement.
In 2018, Vatican prosecutors informed Milone’s lawyers that a criminal investigation against him was closed and no charges were going to be filed.