Cardinal Pell gave a statement to The Tablet in the wake of the Holy See announcing that a full audit by PricewaterhouseCoopers would not take place.

Instead, PwC will assist an internal auditor-general with the work.

The cardinal is the prefect of the Vatican's Secretariat for the Economy.

He said the new arrangement "is not a rejection of financial reform".

Rather it is "a recognition that the many challenges in transitioning to full implementation must fit the context and a way forward is being found".

But Cardinal Pell said the financial reforms of the Holy See so far are "irreversible".

This has ensured there are no more "pools of darkness in the Vatican", he said.

Cardinal Pell stated: "The Vatican is committed to transparency, international cooperation and the use of contemporary international standards in financial reporting."

But he pointed out that the "full implementation of such changes will take time".

Cardinal Pell added that work needed to be done to bring expenditure under control.

He said that the Vatican now prepares one overarching budget, and it monitors expenditure, meaning that the Holy See knows where it stands financially.

He added that the work culture was changing with development programmes led by Georgetown University, in the United States.

"The vast majority of the financial staff appreciate the modernisation and are cooperating happily," he said in a statement.

But the cardinal said more needed to be done to streamline budgeting and expenditure as well as battling significant "cash deficits" over the last three years.

He added that hundreds of millions of euros were needed to fund a shortfall in the pension fund.

"The Vatican financial situation is not critical, but we face significant challenges, which can be met," Cardinal Pell explained.

Sources

• The Tablet
• Image: Catholic News Agency

The Vatican announced last week that PricewaterhouseCoopers (PwC) would no longer be responsible for the audit.

Instead it will be performed by the Holy See's Auditor General.

In a statement, the Vatican noted that PwC would play an "assisting role" to the Auditor General.

PwC will also be available to help Vatican departments with support and consulting services.

The Vatican said this new arrangement will enable "a broader collaboration" with PwC.

"This agreement permits all of the entities of the Holy See to participate more actively in the reforms under way," the statement noted.

The Holy See said that "by law" the Auditor General should undertake the audit as this is "normally the case for every sovereign state".

The position of the Auditor General, first established under Francis, reports directly to the Pope and has the power to look at the finances of any Vatican identity.

The current Auditor General is Libero Milone, a former chairman of Deloitte in Italy.

The Vatican's statement stressed that the path to achieving international accountancy standards is "normally complex and prolonged".

The Holy See suspended the audit by PricewaterhouseCoopers (PwC) in April in order "to examine the meaning and scope of certain contract clauses".

PwC's auditing was unilaterally and without the Pope's permission, put on hold by Cardinal Angelo Becciu, a high-ranking official at the Secretariat of State, in what was seen as a power struggle between Cardinal George Pell and senior curial officials.

One of the problems was reportedly the fact that Cardinal Pell was one of the signatories to the contract with PwC.

This assertion was challenged by the cardinal who said that PwC's three year deal - reportedly worth US$3 million - was agreed by the Council for the Economy, the body led by German Cardinal Reinhard Marx, which also oversees Cardinal Pell's department, the Secretariat for the Economy.

The latest Vatican statement stresses that the earlier suspension of PwC's work was not an attempt to "hinder reforms".

Sources

• The Tablet
• Catholic Herald
• Image: Catholic Herald

Although he turns 75 next month, the cardinal plans to continue in his current post until 2019.

This was confirmed in a statement his office released late last month.

A Crux article reported that, according to the cardinal's office, "Pope Francis had confirmed the Australian prelate as the Vatican's top financial official until at least 2019".

Cardinal Pell is currently in the middle of what some commentators are seeing as a power struggle between departments in the Roman Curia.

An external audit of the Vatican's finances by PricewaterhouseCoopers was suspended last month by a senior official at the Holy See's Secretariat of State, Archbishop Angelo Becciu.

Problems with the firm's contract were cited, including the fact that Cardinal Pell was one of the signatories, The Tablet reported.

This assertion was challenged by the cardinal who said the PwC agreement was agreed by the Council for the Economy, the body led by German Cardinal Reinhard Marx which also oversees Cardinal Pell's department.

According to statement from Cardinal Pell's office, "it is also interesting to note so called ‘concerns' about the PwC audit and contract were only raised when auditors began asking for certain financial information and were finding it difficult to get answers".

A communique from the Holy See released last Tuesday said there were issues with "the meaning and scope of certain clauses" and "methods of implementation" with the PwC deal.

Last week, Pope Francis paid a visit to Cardinal Pell's department.

In its statement, Pell's office said the Pope spent an hour with the secretariat's team during which he took part "in a friendly and lively discussion".

It added that Francis "repeated the need for outside or external professional inclusion and assistance".

Sources

• The Tablet
• Vatican Insider
• Statement from Cardinal Pell's office
• Crux
• Image: Crux