Pell presses Vatican’s financial clean-up despite resistance

By Inés San Martín
Crux
February 27, 2015

http://www.cruxnow.com/church/2015/02/27/pell-presses-vaticans-financial-clean-up-despite-resistance/

Cardinal George Pell, arriving for a morning session of the synod on family issues last fall, is pressing ahead with Vatican financial reforms.

ROME — Against a backdrop of controversy over his campaign to clean up Vatican finances, Australian Cardinal George Pell pressed ahead this week by issuing a first-ever set of “closure procedures” to finalize financial reporting for 2014.

Put together by the Secretariat for the Economy in collaboration with an independent auditor, the procedures require all heads of Vatican departments, for the first time, to certify in writing that they’ve provided complete and accurate information.

The procedures were issued by the Secretariat for the Economy on Monday and appeared in an “Informative Bulletin” released by the secretariat on Wednesday.

Designed to “ensure a smooth transition from former accounting policies,” those procedures include confirmation by external banks and financial institutions of the money held by each Vatican department.

Once presented to Pell’s office, the reports of every Vatican department will be assessed and revised. According to the bulletin, they will then be submitted to the Council for the Economy for review and eventually presented to Pope Francis.

At the end of the line, the idea is to issue a consolidated financial statement for 2014 which, for the first time, will provide a comprehensive picture of the Vatican’s financial situation at the end of the year.

The activity comes at a time when Pell and the new financial oversight system he represents seem to be generating increasing resistance within the Vatican.

In its Friday edition, the Italian newsmagazine L’Espresso published leaked receipts from within the Secretariat for the Economy showing that it had run up more than a half-million dollars in expenses during its first six months, including a bill of more than $3,000 from a famed Roman clerical tailor.

Critics have charged Pell with accumulating excessive power and with replicating the very cronyism and secrecy he was meant to dislodge. The effort to discredit him now may be related to the fact that Pope Francis is set to issue a new legal framework for the financial oversight bodies, which observers see as a litmus test for whether the pope has greater faith in Pell or his critics.

On Friday, the Vatican released a statement calling the leaking of confidential information “illegal” and also describing the attacks on Pell as “undignified and petty.” The Rev. Federico Lombardi, the Vatican spokesman, said the work of reform under Pell is proceeding with “continuity and efficacy.”

The Secretariat for the Economy was created by Pope Francis in February 2014 and reports to the Council for the Economy, a 15-member body created to supervise the economic and administrative activities of the various Vatican departments.

US Cardinal Daniel DiNardo, archbishop of Galveston-Houston in Texas and a member of the council, is the lone American on that council.

The directives sent out on Monday came as Pell, former archbishop of Sidney and appointed by Francis to top the financial reform as head of the secretariat, was participating in the annual Lenten retreat together with the pontiff and the top papal aides that ended Friday.

They build on a financial management manual sent out by the secretariat last November, which has been effective since Jan. 1. The handbook was approved in forma specifica by the pope Oct. 24, meaning it has his personal blessing.

That handbook was designed to help bring the Vatican in line with international standards of accounting and money management. Among other things, it dictates that each office is expected to have an annual budget, with a reliable picture of its assets and expenditures.

The handbook also pledges that the Vatican’s consolidated annual financial statement will be reviewed by a major international auditing firm.

When he was first brought into the Vatican from Sydney, Pell stated that his ambition was to save “millions, if not tens of millions” of dollars each year by implementing rational accounting measures, turning the Vatican, as he put it, from an “embarrassment” into a “good model.”

The final financial statements are expected to include $1.5 billion of previously un-accounted assets that were reported to the secretariat during the 2014 fine-combing of the Vatican’s offices and revealed by Pell to cardinals from all over the world that gathered in Rome in mid-February for the annual meeting of the College of Cardinals.

During an interview with Crux on Feb. 13, the Australian prelate stressed that the discrepancies weren’t the result of illegal activity, but an overly compartmentalized and unwieldy reporting system that allowed significant pockets of assets to go undetected.

“What we’ve got to do is to get in place structures so that the Vatican is a model to others and not a scandal,” Pell said in that interview. “We have to make it terribly difficult to return to waste and inefficiency and some measure of corruption.”