Cardinal George Pell, the prefect of the Vatican Secretariat for the Economy, has said he was “a bit surprised” by the decision of the Secretariat of State to suspend an independent audit of the Vatican's finances.

In a short statement released this morning, he said he anticipates the audit will “resume shortly” after “discussions and clarification" of some issues, and added that the work of the “internal auditor which covers all areas has not been interrupted.”

Yesterday the Register reported that the Secretariat of State had sent a letter this week to all Vatican entities saying the first external audit aimed at raising the Vatican’s finances to international anti-money laundering standards had been suspended.

The Vatican had hired accountancy giant PricewaterhouseCoopers in December to conduct the audit on the instructions of the Council for the Economy, the 15-member monitoring body set up to oversee the work of the Vatican Secretariat for the Economy.

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 Council for the Economy which was responsible for appointing the auditors. 

In the letter, signed by Archbishop Angelo Becciu, the ‘sostituto’ of the Secretariat of State who oversees the day-to-day running of the Roman Curia, the archbishop says that the audit was being suspended because the Vatican is undergoing a “period of transition”, moving from old policies and practices to new ones. 

The point has been made that an external auditor cannot carry out its work until the internal audit has been completed. But some involved in the Vatican's financial reform dismiss this, saying just because there’s a period of transition doesn’t mean the external audit has to stop. “It might mean that it has to be limited in scope,” said one Vatican official close to the process, “but it doesn’t mean you don’t have to have some external verification.”

Further perplexity has arisen over the claim there might be illegalities surrounding the audit, an allegation firmly denied as the audit had been directed and unanimously passed by the Council for the Economy. The extent of the audit was clear, the official said, “so for people to say they were not really aware of its scope is more than convenient, it’s not true.”

Another concern appears to have been “mission creep” and that PwC might go beyond its remit, but the scope was “exactly as the Council had approved,” the official said. “Nothing has been added to it at all.” There were also fears about possible breaches in confidentiality during the audit process, but auditors say it is virtually unheard of for a large firm like PwC to ever leak information.

It’s becoming clear that the rigor of the audit in an effort to raise its financial transparency to international standards is unnerving some in the Vatican, some of whom are insisting on having more training to cooperate with the auditors, although those leading the process wonder what training is needed to send letters out to verify balances.

The official said he anticipated the problem of the suspension will be “resolved quickly”, that the commitment to seeing the audit through “is as strong as it ever was”, and that there is “solid support for reengagement as soon as possible”.

“We’re always going to have setbacks, so the audit might take four years instead of three, but the important thing is that we’re making progress,” he said. 

Bringing in PwC was “primarily the work of the Council and one of the core elements of Pope Francis’ financial reforms,” he recalled, so in a sense “it’s a blow to those reforms announced two years ago and the Council that made the appointment of the auditors.”

But he added that the cardinal “is very clear that the commitment remains.” 

Cardinal Pell had a private audience with Pope Francis this morning.