Vatican orders external audit to unravel tangled finances

The Vatican said on Saturday it had ordered the first external audit of its assets as part of a drive by Pope Francis to bring transparency to its finances, where millions of euros have gone unrecorded without any central oversight.

Papal spokesman Federico Lombardi said auditors PricewaterhouseCoopers would start work immediately.

The pope has promised to overhaul the Vatican's murky financial management, which have been hit by repeated scandals in recent years. However, he has met resistance from Church officials who want to maintain tight control over operations.

Lombardi told reporters that the Vatican's Secretariat for the Economy had called on PwC, the world's second-largest audit firm by revenue, to review the Vatican's consolidated financial statements, which includes assets, income and expenses.

The decision to work with one of the world's top four auditors continued "the implementation of new financial management policies and practices in line with international standards", he said.

A Vatican financial statement this year revealed that Vatican departments had stashed €1.1 billion ($1.2 billion) of assets that were not declared on any balance sheet.

The head of the economy secretariat, Cardinal George Pell, said last year that departments had "tucked away" millions of euros and followed "long-established patterns" in jealously managing their affairs without reporting to any central accounting office.

Pope Francis picked Pell, an outsider from the English-speaking world, to oversee the Vatican's often muddled finances after decades of control by Italian clergy.

Since the pope's election in March, 2013, the Vatican has enacted major reforms to adhere to international financial standards and prevent money laundering.

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