The Vatican's Secretariat of State suspended the audit by international accounting firm PricewaterhouseCoopers last week.

This is four months after the Vatican had announced PwC was to perform the audit.

Vatican spokesman Fr Federico Lombardi, SJ, said that the audit had been paused because there are "underway detailed studies of some aspects relative to the agreement" reached with the firm.

According to media reports, the problem was not connected to PricewaterhouseCoopers, which had just begun its work.

Rather the issue was whether internal Vatican procedures were followed completely in offering a contract to the firm.

A letter sent to all Holy See departments from the Secretariat of State's Archbishop Giovanni Angelo stated that Cardinal Pell's instruction for Vatican bodies to co-operate with the firm had been overruled by "superior provision".

In a short statement, Cardinal Pell, who is the prefect of the Vatican's Secretariat for the Economy, said he is "a bit surprised" at the move.

Cardinal Pell said he anticipates the audit will "resume shortly" after "discussions and clarification" of some issues.

The cardinal that the work of the "internal auditor which covers all areas has not been interrupted".

It has been reported that the move to suspend the initiative has been seen as a move not only to undermine the work of Cardinal Pell and the department he runs, but moreover the Vatican's Council for the Economy which was responsible for appointing the auditors.

On April 21, Cardinal Pell had a private audience with Pope Francis.

The December appointment of PwC was announced by the Vatican as "continuing the implementation of new financial management policies and practices in line with international standards".

Sources

• National Catholic Register
• Catholic News Service
• The Tablet
• Image: Crux

Cardinal George Pell addressed recently ordained bishops in Rome last September.

The Tablet reported that the text of what he said has been released in a book of all the talks given to the bishops.

The Prefect of the Holy See's Secretariat for the Economy told the new bishops that spending in their dioceses must be kept under control.

Cardinal Pell said a bishop must act as a custodian of diocesan assets and firmly stated that he must "not sell land".

The cardinal stated: "This patrimony should be preserved and handed on to the bishop's successor."

"It belongs to the future and should not be spent on one generation."

When selling diocesan land, canon law provisions around stable patrimony and alienation of land must be followed by a bishop.

Cardinal Pell added that the leader of a diocese must understand financial basics and show an interest in the issues.

If he doesn't, Cardinal Pell explained, it "would give encouragement to thieves".

He continued: "One does not have to be an expert, but he must be able to see the holes in a ladder."

The cardinal said that "dishonesty is not unknown" in the Church.

He cited his first parish assignment as an assistant priest as an example without going into further details.

Cardinal Pell urged bishops to operate strict financial controls and employ a business manager to ensure guidelines are adhered to.

This manager should be more than an accountant, but "an entrepreneur" who understand finances, land matters and canon law.

Financial reporting is also cited as critically important along with strong internal controls to ensure cash is spent properly.

These measures will ensure that a diocese does not rack up an annual loss, something which the cardinal said should be "very rare".

Sources

• The Tablet
• CHAUSA
• Fr Achacoso blog
• Image: Yahoo News

Two years ago, the Vatican's then-Secretary of State, Cardinal Bertone, ordered the investment in Lux Vide SpA, for "evangelisation".

The company makes family movies, including films about popes and a series about a bike-riding country priest who helps police solve crimes.

Cardinal Bertone pushed the deal through despite objections from the bank's director and board members.

They thought the expense was too big and not justifiable, according to current and former bank executives.

The latter said Cardinal Bertone backed a proposal for the Vatican bank to buy up to 25 percent of Lux Vide in 2010 and, again in 2012.

Both times, the bank's directors tried to reject the deal, saying it was not in the bank's interest to invest in television companies and that the price was high.

But the deal was eventually approved. "The board said 'this is not a good idea' but could not block the deal," said a current bank official.

"The message was: the boss (Bertone) wants this."

Last month, the Vatican booked a loss for the entire amount spent, as part of a wider review of Vatican finances that has also led to the closure of hundreds of accounts at the Institute for Religious Works, as the Vatican bank is officially known.

Cardinal Bertone, who still stands by the decision to invest in the television company, said that when the bank approved the deal it did so with the board's unanimous consent.

Bertone had a virtual free reign to run the Vatican's administration under Pope Benedict XVI.

The zeroing of the Lux Vide investment is emblematic of Pope Francis's effort to loosen ties between the Holy See and Italy's business and political world.

Francis considers such relationships improper to the Church's religious mission.

He has instigated an overhaul of the way the Vatican operates, including its finances.

Under the new structure created by Pope Francis, Cardinal Bertone's successor as Vatican secretary of state, Cardinal Pietro Parolin, has no direct power over any of the financial affairs of the Holy See, including the IOR and APSA, the Vatican's asset management and investment arm.

Source

• UCA News
• Image: CathNewsUSA

"Of all the organisations that serve America's poor, few do more good work than the Catholic Church: its schools and hospitals provide a lifeline for millions. Yet even taking these virtues into account, the finances of the Catholic Church in America are an unholy mess," the magazine says.

In a 4000-word article, The Economist says some parts of the church have indulged in "ungainly financial contortions" allegedly to divert funds away from uses intended by donors or to frustrate creditors with legitimate claims, including its own nuns and priests.

Sexual abuse settlements have led to a liquidity crisis, apparently encouraging a trend towards paying for the expansion and renovation of facilities through publicly raised debt rather than donations or contributions from the faithful.

Over the past eight years, eight dioceses in the US have declared bankruptcy. Often parishes that had commingled their funds with diocesan finances lost all their investments, even if they had been told it was being kept separate, and money was diverted from priests' retirement funds.

The Economist estimates that annual spending by Church entities in the US was around $NZ210 billion in 2010 — 57% on health-care networks, 28% on colleges, 6% on parish and diocesan day-to-day operations, and 2.7% on national charitable activities.

The magazine says the American Church may account for as much as 60% of the Catholic Church's wealth globally.

And it names Cardinal Timothy Dolan, Archbishop of New York, as "Manhattan's largest landowner, if one includes the parishes and organisations that come under his jurisdiction".

Source:

The Economist

Image: Baylor University