Congregation for religious issues guidelines for financial management

Last updated on: August 7, 2014 at 6:04 am by CNA Daily News

Congregation for religious issues guidelines for financial management 2014-08-07T06:04:00+00:00 CNA Daily News

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Vatican City, Aug 7, 2014 / 12:04 am (CNA/EWTN News).- The Vatican's congregation for religious has released guidelines on the management of congregations, requiring them to adapt to international financial reporting standards and to verify that their financial operations align with their charisma.

The guidelines are contained in an Aug. 2 circular letter, released Tuesday, signed by the prefect and the secretary of the Congregation for Institutes of Consecrated Life and Societies of Apostolic Life, Cardinal Joao Braz de Aviz and Archbishop José Rodriguez Carballo.

The letter follows upon a Vatican symposium on religious congregations' management of goods held in March; it aims at providing a common juridical framework for religious institutes.

The circular letter stresses that in the first place, religious congregations should commit to transparency.

“Evangelical testimony requires that works are managed in full transparency with respect for civil and canon law, and are put at the service of the many forms of poverty. Transparency is fundamental for the experience and effectiveness of the mission,” it reads.

Religious congregations are asked for a clear accountability of their balance sheet, distinguishing between the balance sheet of the works and that of the communities, and establishing common rules of financial reporting for every branch of a given institute.

They are also to adopt audits to certify the veracity of these balance sheets.

In order to meet such standards, the congregations are urged to seek the help of qualified experts who are at service of the Church, including professors of relevant fields at Catholic universities.

“Transparency and reliability of patrimony and management reporting may be better achieved with the help of experts, in order to guarantee the adoption of adequate procedures, taking into account the size of the institute and of its works,” the letter reads.

The letter also recommends that institutes take a balanced approach to external consulting.

“It is necessary to avoid both extremes: on one side, not hiring consultants in order to save money, thus risking to get into legal, economic, and fiscal problems; on the other side, wasting the institute’s money” in indiscriminately hiring consultants who may not be effective, the letter advises.

The Congregation also suggested that having only one person serving as an institute's treasurer can lead to a detachment of the community's members from their cost of living and its associated difficulties and management, which can result in “a dichotomy between reality and mission.”

The letter asks religious congregations for more financial programming, with preventive budgets, resource planning, and planning for eventual financial problems, as well as monitoring the works in financial deficit and the promotion of sustainable works.

The document also recommends that congregations have “a clear scenario of the way the works within each province are managed, both the institute’s works, and those promoted by the institute.”

Congregations are also requested to insert the notion of “stable patrimony” into their constitutions or any other fundamental texts, in order to better define which goods are the institute’s property, thus “safeguarding the continuity of the institute as a public legal entity.”

The guidelines of the circular letter are also aimed at promoting more collegiality in congregations' management of goods, by making the members of the congregation co-responsible for financial matters.

In fact, among the recommendations there is that of using budget preview “not only for the works, but also within communities, as a mean of formation to the economic dimension, for the growth of a common awareness of these issues.”

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