Understanding the Vatican’s structure for financial management

Catholic Culture

By Dr. Jeff Mirus
Jul 27, 2016

Over the last several years, the effort to make the administration of Vatican funds more transparent—and the administrators more accountable—has reached center stage in the ongoing process of curial reform. Economic and financial reform have become increasingly important with rising concerns about money laundering, particularly in support of terrorism. In addition, it has become clearer to those inside the Vatican that, in some cases, curial congregations had become economic fiefdoms with insufficient consistency in accounting and financial management.

None of this is surprising. Governments and major organizations (i.e., conglomerates, universities, etc.) always have multiple levels of budgeting, financial administration, procedural control, income and expenditure. Over time bad habits can develop in some sectors, or at least there can be turf wars over control of budgets and the accountability between one sector and another. CatholicCulture.org has steadily reported on Vatican efforts at financial reform under Pope Francis, but I do not believe we have presented a snapshot of the overal Vatican financial structure to provide greater context. I’d like to do that now—in the very broad strokes of a non-specialist (and so subject to improvement).

Institute for the Works of Religion

The biggest financial scandals over the past generation have occurred in the Vatican’s Institute for the Works of Religion (IOR), which is essentially a bank for Catholic institutions worldwide. Like all banks, the IOR has separate accounts, owned by the account holders, for a wide variety of Catholic entities, including embassies, congregations, dioceses and religious orders around the world. While about 80% of its funds are in the Catholic institutional accounts, the IOR also has individual accounts, such as employee accounts.

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