Cardinal George Pell will remain as prefect of the Vatican Secretariat for the Economy beyond his 75th birthday on June 8, his office confirmed.

The April 28 news quashed speculation that Pope Francis was going to accept the cardinal’s resignation, which every cardinal is obliged to submit upon turning 75, despite his having a mandate of three more years to serve as prefect of the new secretariat. An official from the cardinal’s office has since confirmed to the Register that “there is no doubt that the cardinal has been asked to stay on.”

Pope Francis appointed Cardinal Pell to head up the new Secretariat for the Economy in 2014 in order to lead the administration of Vatican finances and increase the transparency of the Vatican’s financial transactions.

The Pope visited Cardinal Pell’s secretariat on April 23, during which the Holy Father spent an hour in “a friendly and lively discussion”  with staff. He reportedly made clear that he “fully supported” the secretariat’s work and “re-emphasized the ongoing need for transparency in continuing with their reforms.” The Pope also “repeated the need for outside or external professional inclusion and assistance.”

The Pope’s reassurances came on the heels of the Secretariat of State’s decision in mid-April to suspend the first major external audit of Vatican finances, just four months after it began, in a move that appeared on the surface to undercut the work of the Secretariat for the Economy.

Last December, the Council for the Economy, a 15-member body that oversees the Secretariat for the Economy, unanimously agreed to bring in accountancy giant PricewaterhouseCoopers (PwC) to conduct the first external audit of the Vatican in a bid to increase transparency and bring Vatican finances into line with international anti-money-laundering standards. The council asked that its audit committee proceed as quickly as possible with the initiative.

But despite Cardinal Pell and the chairman of the audit committee co-signing the final engagement letter with PwC, the cardinal received no prior notification of the suspension, which came in the form of a letter, dated April 12, from Archbishop Angelo Becciu, sostituto at the Secretariat of State, to all Vatican entities. This naturally led some to believe that move was part of an effort to unseat the Australian cardinal, who has met resistance to his reforms since he took office.

Speculation about the cardinal’s possible imminent removal was further heightened when, in an April 20 article in the Italian newspaper Italia Oggi, it was alleged that the president of the Vatican Bank, Frenchman Jean Baptiste De Franssu, was also to be replaced in June by an Italian financier, who subsequently turned down the offer. The article’s author, Antonino D’Anna, said the candidate’s refusal to take the job was proof that the Cardinal Pell era was “nearly over.” Reliably informed Vatican sources told the Register the story was unfounded.


‘A Bit Surprised’

In a statement April 21, Cardinal Pell said he was “a bit surprised”  by the decision to suspend the audit but that he anticipated the initiative would “resume shortly,” after “discussions and clarification” of some issues.

Vatican officials involved in the process claimed that some in the Vatican, particularly in the Secretariat of State and the Administration of the Patrimony of the Apostolic See (APSA), were “afraid of the audit uncovering information they don’t want uncovered” and were “worried about losing sovereign control over Vatican finances.”

Until Pope Francis created the Secretariat for the Economy, Vatican finances were monitored in a more informal, decentralized fashion, loosely directed by three dicasteries: the Secretariat of State; APSA, which dealt with real estate, personnel and assets; and the Prefecture for the Economic Affairs of the Holy See, which audited the balance sheets and budgets of Curial offices.

The Vatican Bank, officially known as the Institute for Works of Religion (IOR), was a further entity, separate from the Roman Curia, while each department tended to manage its own budgets independently of one another, meaning there was little oversight.

Most of the responsibilities of the three dicasteries were subsumed into the Secretariat for the Economy, which now has almost total authority over Vatican finances. APSA was divided in two and now acts as the Vatican’s “treasury.” Although the Holy See’s real estate responsibilities were initially given to the secretariat, they were returned to APSA last year.

In 2014, Pope Francis also established three bodies — including the Council for the Economy — to inspect the budget forecasts and final budgets of all Vatican entities and to monitor the work of the secretariat and Vatican finances in general.


Oversight Issues

In a December 2014 commentary that outlined his mission as head of the new Secretariat of the Economy, Cardinal Pell said he had discovered millions of euros “tucked away”  in various Vatican dicasteries. He did not say any wrongdoing had occurred, but added that Vatican departments long had “an almost free hand” with their finances.

Further evidence of problems emanating from a lack of oversight emerged at the end of April, in a report alleging waste and mismanagement of a vast Vatican-owned property portfolio consisting of nearly 300 apartments, buildings, shops and garages, thanks to generous benefactors.

According to an April 29 article in Il Messaggero, the poor management of the portfolio has left the Vatican with 700,000 euros in liabilities. It added that, of the almost 300 apartments, many of which are centrally located, 80 are not inhabited and produce no income. Others are practically vacant, and of the occupied apartments, a good percentage have tenants who haven’t paid a cent in rent for years.

“While Pope Bergoglio strongly encourages parishes and religious orders to do more to help the refugees and the homeless by providing some empty apartments,” the Il Messaggero article said, these Vatican-owned assets “continue to escape any kind of control.”

An official in Cardinal Pell’s office subsequently confirmed the veracity of the article to the Register.


Moving Forward

In a statement April 26, the Holy See Press Office sought to play down the speculation and especially any talk of resistance to the PwC audit. It said the suspension was “not due to considerations linked to the integrity or quality of the work initiated by PwC, let alone the intention of one or more entities of the Holy See to block the reforms in progress.”

Instead, it said issues have “emerged regarding the meaning and scope of certain clauses of the contract and their methods of implementation. Such elements will undergo the necessary examination.” The Holy See Press Office said the decision to “proceed in this way was taken after suitable consultations between the competent bodies and experts in the field.”

It closed by saying that it hoped this “phase of reflection and study” would take place in an “atmosphere of serenity and collaboration” and that the commitment to “adequate economic and financial auditing remains a priority for the Holy See and for Vatican City State.”

One well-informed source involved in the PwC audit told the Register April 27 that the audit was “pretty non-controversial until PwC started meeting with officials from APSA and the Secretariat of State.”

The source said that the “real issue” was the audit’s “scope and rigor,” even though this had been discussed with Vatican officials for some time.

At the time the Register went to press, there was still no decision reached about restarting the PwC audit. This means Vatican dicasteries won’t be able to release financial statements in July as hoped.

However, Cardinal Pell’s office is confident progress will continue. Pope Francis, an official reported, “remains strongly committed” to such scrutiny and to the reform of Vatican finances in general.