Vatican Cancels Accountancy Giant's Full Involvement in External Audit

By Edward Pentin
National Catholic Register
June 10, 2016

http://www.ncregister.com/blog/edward-pentin/vatican-cancels-accountancy-giants-full-involvement-in-external-audit

After first suspending accountancy firm PricewaterhouseCoopers' external audit of Vatican finances in April, the Holy See has now definitively cancelled PwC's full involvement in the financial inspection.

In a statement released today, the Vatican said the audit would now be executed by the Vatican’s own Auditor General. It added that PwC would henceforth “play an assisting role” and be “available to those dicasteries that wish to avail themselves of its support and consulting services.”

The Register revealed in April that the Secretariat of State had suspended the external audit just four months after it had begun its work. The news came as a surprise to Cardinal George Pell, the prefect of the Secretariat for the Economy, who had not been given advance notice of the suspension which was ordered by the Secretariat of State in a letter sent to all Vatican entities.

Together with the body that oversees the Secretariat — the Council for the Economy headed by Cardinal Reinhard Marx — he had commissioned accountancy giant PwC to carry out the audit in a bid to bring accountability and transparency to the Vatican’s finances and make sure they matched international standards.

Some are therefore seeing this as a defeat for the reform process, especially as the minutiae of PwC’s auditing plans, including its scope, was discussed and clearly laid out before the audit began. This led to the accusation that some in the Vatican were uneasy about the intrusive nature of the inspection and saw it as a challenge to its sovereignty.

But the Vatican said today that the suspension in April was in order to “examine the meaning and scope of certain contract clauses, as well as to examine the manner in which the contract was executed.”

Those issues were “duly examined”, it said, and the questions resolved, one of which entailed handing the audit over to the Vatican’s own Auditor General — a practice that is “normally the case for every sovereign state.”

The Vatican further insisted that the suspension in April “was not due to considerations regarding the integrity or the quality of PwC’s work, nor is it attributable to the desire of one or more entities of the Holy See to hinder reforms.”

Instead, it said striving to meet international standards “is normally complex and prolonged” and the process requires “a series of legislative choices as well as the adoption of administrative and accounting procedures, which are presently under development.”

The statement added that the Vatican and PwC had therefore “entered into a new agreement” which would mean “a broader collaboration” that would be “adaptable to the Holy See’s needs.”

The Vatican also said the new agreement allows more active participation in the reforms, and was at pains to point out that the commitment to the audit of the Holy See and Vatican City State “has been, and remains, a priority.”