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Cardinal George Pell issues financial rule book for Vatican

The Guardian (UK)
November 7, 2014

http://www.theguardian.com/australia-news/2014/nov/07/cardinal-george-pell-issues-financial-rule-book-for-vatican

George Pell was handed wide-ranging powers as head of a new secretariat.
Photo by Andrew Medichini

Australia’s Cardinal George Pell has made the first significant move in Pope Francis’s drive to clean up the Vatican’s finances, issuing a financial management manual to church officials.

The rule book, which will be binding on all members of the Vatican bureaucracy from 1 January, is part of Pell’s work to bring the church’s financial management into line with international accounting standards.

The manual was sent to all Vatican departments this week by the secretariat for the economy, a special unit set up earlier this year, according to an internal cover letter seen by Reuters.

The letter said the manual contained guidelines “that are an essential first step in the reforms of the economic and administrative practices of the Holy See, being requested by the Holy Father”.

All departments will have to enact “sound and efficient financial management policies” and prepare financial information and reports in a “consistent and transparent manner” that adheres to international accounting standards.

The letter, and a separate internal announcement from the secretariat, both say that each department’s financial statements will be reviewed by one of the world’s major international auditing firms.

Francis signaled his determination to make the Vatican’s finances more transparent and less vulnerable to abuse by handing Pell wide-ranging powers as the head of the new secretariat this year. Pell’s appointment was accompanied by an organisational restructure which means administrative and financial managements no longer fall under the authority of one cardinal.

Vatican sources said heads of some departments had resisted attempts to put them under the control of Pell’s department.

But the letter makes clear the new rules will apply to “all entities and administrations of the Holy See and Vatican City State”, putting that part of the statement in bold.

The Australian cardinal has moved quickly to bring in lay accounting experts and has diluted Italian influence among cardinals involved in financial oversight. He characterised Vatican finances before his arrival as “sloppy, inefficient and open to being robbed”, and this month admitted that the cardinals in charge had little idea of what was going on.

“For seven or eight years I was on a committee that was supposed to be overlooking Vatican finances,” he told Catholic weekly the Tablet. “The only thing that was absolutely clear is that we didn’t know what was going on.”

The financial reforms initiated by Pell concern the curia, the Vatican’s central administration.

Most of the most serious financial scandals that have tainted the church’s reputation in recent years have been centred on the separately run Vatican Bank, also known as the Institute for Religious Works.

The bank, which handles current accounts for curia employees and holds deposits for religious orders, has also been subjected to a clean-up operation ordered by the Pope.

Two of its former managers are on trial over alleged money-laundering in 2010 and a Council of Europe report in 2012 identified major deficiencies in the bank’s systems for preventing it. In a follow-up report in 2013, the Council of Europe said the Vatican had acted swiftly to remedy the deficiencies but underlined that “certain issues still need to be addressed”.

 




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