VATICAN INFORMATION SERVICE
YEAR XXII - # 133
DATE 16-07-2015

Summary:
- Consolidated statements for the Holy See and financial statements for the
Governorate of Vatican City State

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 Consolidated statements for the Holy See and financial statements for the
Governorate of Vatican City State
 Vatican City, July 2015 (VIS) - At the Council for the Economy meeting on 14
July 2015, Cardinal Pell and the staff from the Secretariat for the Economy
presented the Consolidated Statements for the Holy See and the Financial
Statements for the Governorate. The Statements had been prepared by the
Prefecture for Economic Affairs and reviewed and verified by the Secretariat,
the Audit Committee of the Council and the External Auditor.
 It was noted that 2014 was a year of transition to new Financial Management
policies based on International Public Sector Accounting Standards (IPSAS). The
former accounting principles and consolidation perimeter (comprising 64 Holy
See
entities) were used in preparation of the 2014 Statements. Managers were
however
asked to ensure they had included all assets and liabilities and provide
appropriate certification as to completeness and accuracy. Working with the
external auditor, third party confirmation of balances were requested so that,
consistent with sound audit practice, amounts could be independently verified.
To include all assets and liabilities in the accounts at year end and to
prepare
for the new policies, a number of closing entries were included which make
direct comparison with 2013 figures difficult. Where appropriate relevant
points
of comparison were provided to the Council.
 The journey of transition to new policies is progressing well and the
Secretariat was pleased to report high levels of interest and cooperation in
the
entities. The 2014 Financial Statements reflect an enormous amount of work by
staff in many Holy See entities, particularly in the Prefecture for Economic
Affairs and the Secretariat for the Economy and Council members expressed their
gratitude for the rigorous and professional work and the strong commitment to
implementing the financial reforms approved by the Holy Father.
 The Financial Statements for the Holy See for 2014 indicate a deficit of
25,621k Euro which is similar to the deficit of 24.471k Euro reported in the
2013 Statements. Had the same accounting treatment applied in 2014 been applied
in 2013, the 2013 deficit would have been reported as 37,209k Euro. The
improvement in 2014 was largely due to favourable movements in investments held
by the Holy See. The main sources of income in 2014, in addition to
investments,
include the contributions made pursuant to canon 1271 of the Code of Canon Law
(21m Euro) and the contribution from Institute of Works of Religion (50m Euro).
 Net assets increased by 939m Euro as adjustments were made to include all
assets and liabilities in the closing balances for 2014. For the entities
included in the consolidation perimeter, assets previously off the balance
sheet
amounted to 1,114m Euro and liabilities amounted to 222m Euro. While the
patrimonial situation in the pension fund was not reflected in the closing
balance sheet, it was reported that the new pension fund board will be asked to
prepare an updated assessment of the overall situation.
 As in previous years, the most significant expense included in the Holy See
Financial Statements is the cost of staff (126.6m Euro) and the statements
indicate a total of 2880 personnel in the 64 Holy See entities included in the
consolidation.
 The financial statements for the Governorate for 2014 indicate a surplus of
63,519k Euro which is a significant improvement on the 2013 surplus of 33,042k
Euro, largely due to continued strong revenue from the cultural activities
(especially the Museums) and favourable movements in investments. Net Assets
increased by 63.5m Euro and there were no adjustments necessary to include
additional assets and liabilities in closing balances for 2014. The Statements
indicate a total staff of 1930 in the Governorate.
 Following the meeting of the Council for the Economy,the Secretariat for the
Economy was advised the Auditor confirmed that a clear audit certificate had
been issued for the Holy See and Governorate Financial Statements.
 The Council also received a further update on the 2015 Budget. The 2015
Budgets
were prepared under the new Financial Management Policies, approved last year
by
the Holy Father. The Council in late May received a detailed budget submission
prepared by the Secretariat. The submission highlighted proposed activities as
well as anticipated revenue and expenditure for the coming year and included
specific recommendations for each of the 136 entities on the list, as approved
by the Holy Father, who are subject to control and vigilance of the Council and
Secretariat. The Budgets indicate the deficits experienced in recent years are
likely to continue in 2015.
 While rapid progress is being made in implementing reforms requested by the
Holy Father, the complete transition to the IPSAS is likely to take several
years. The 2015 Budgets and the 2015 Statements are the first important steps.
From 2015, the Consolidated Statements for the Holy See will include the new
practices and additional entities, as required under the new Financial
Management Policies and the IPSAS Standards.

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