A senior Vatican official has told an Australian sex abuse inquiry that he did not immediately act when a boy raised abuse allegations against a cleric in the 1970s and should have done more.

Australian Cardinal George Pell, Pope Francis' top financial adviser, gave evidence on Thursday for a fourth day to the Royal Commission into Institutional Responses to Child Sexual Abuse from a Rome hotel a short distance from the Vatican.

Pell told the inquiry in Sydney via videolink from Rome that he was a priest in the Australian city of Ballarat in 1974 when an unnamed student at St. Patrick's College told him that Christian Brothers teacher Edward Dowlan "is misbehaving with boys."

Asked by commission chairman Peter McClellan what he did about it, Pell replied: "I didn't do anything about it."