Vatican assets increase by 1 billion, finances still in red

ROME- Secretariat for the Economy of the Holy See Cardinal George Pell has released the financial statements for 2014 which show a boost in net assets, but with the sovereign state’s finances still remaining in deficit, Vatican sources said Saturday.
According to the information released by Australian Cardinal Pell, who was employed by Pope Francis to overhaul the Vatican’s extremely complicated financial system, these financial statements give the clearest outlook of the financial situation of the Vatican. The statements also aim to provide a better insight into assets and liabilities, which were examined by external auditors, as part of what the Vatican has called “a journey of transition to new policies”, aligning the Holy See’s financial management with international accounting standards. 
 The statements have shown that net assets have increased by 939 million euros thanks to the discovery of previously off-the-books assets. However, the cardinal has stressed that the newly declared assets were not “illegal, illicit or badly administered.”
Although the Holy See reported a greater deficit in 2014, 25.6 million euros, compared with that of 2013, which was 24.5 million euros, the Vatican has explained that “had the same (stringent) accounting treatment applied in 2014 been applied in 2013, the 2013 deficit would have been reported as €37.209 million.” From the statements it is likely that the deficits will continue in 2015.
 According to the statements, the largest expenses of the sovereign state in 2014 were salaries for its 2,880 employees, which were calculated to be 126.6 million euros. However, there will be no lay-offs to reduce expenditure, as “The Holy Father has said he doesn’t want any staff member dismissed,” Cardinal Pell said.
 Therefore, a group appointed by the Council is searching for ways to use staff in a more effective manner said Danny Casey, the cardinal’s chief of staff. For example, the Vatican’s media outlets have been recently merged so that staff can be better implemented to favour the digital age.
 In the statements the Vatican City State, which manages the Vatican Museums, has declared a surplus of €63.5 million in 2014, almost double that of 2013 (€33 million), thanks to “favourable movements in investments”.
 An issue that remains to be resolved concerning the financial reform is asset management, as Vatican offices, that have always invested independently, resist the plan to confer important roles to external managers. Another section of the reform that requires attention is management of human resources, with the Cardinal Pell contending with the Secretariat of State for the right to hire personnel.
 The Aussie Cardinal has remarked on the financial statements, in an interview with Italian newspaper Il Sole 24 Ore, saying: “The work being done to change Vatican finances and move toward transparency and the adoption of international standards is irreversible; there are still some pockets of resistance but the vast majority of people working in this field are in agreement.”