VATICAN RELEASES 2014 FINANCIAL STATEMENTS

You may recall that in mid-June, on a flight to Rome from a cousin’s funeral in Chicago, I sat next to Bret Bonanni, one of the members of the USA Water Polo team on the plane on their way to a round of matches in Europe. On June 15, their one free day in Rome, nine of the team members joined me and Santiago Perez, head of the Vatican’s Sports Desk at the Council for the Laity, on a three-hour tour of Vatican City, the gardens and the basilica. I wrote about that morning and posted a photo.

Each of the team members wrote me a beautiful thank-you email and I have been able to stay in touch, especially with Bret and his parents, who were in Europe for the matches and took me to dinner in Rome. They are all currently in Toronto where the USA Water Polo teams, both men and women, won the Gold Medal matches last night! Seems they are now on the road to Rio 2016!

Here is a photo from the link to the victory story:

USA WATER POLO TEAM

http://www.teamusa.org/News/2015/July/16/Veteran-Captain-Tony-Azevedo-Leads-Recently-Formed-Mens-Water-Polo-Team-To-Gold

VATICAN RELEASES 2014 FINANCIAL STATEMENTS

The Vatican today released its 2014 financial statements and, noting that new accounting systems had been used for 2014, there was good news and bad news.

Income from areas like the Vatican Museums and the sales of stamps almost doubled profits from the previous year (from 33 million euros to 63.5 million euros), but the budget deficit to run the Roman Curia grew over 2013 (up from 24.5 million euros to 25.6 million).

Previously unreported assets of 1.1 billion euros, and previously unreported liabilities of 222 million euros meant that net assets rose by 939 million euros.

The biggest single outlay in 2014 for the Vatican was salaries for 2,880 personnel at 64 Holy See entities – 126.6 million euros.

The Governorato – the administration that basically runs Vatican City state – the museums, pharmacy and medical offices, clothing and food stores, post office, police and fire department – has a staff of 1,930 people.

Another entry: 21 million euros in contributions from the world’s dioceses and 50 million euros from the Vatican bank.

Here is the report released by the Secretariat for the Economy, headed by Cardinal George Pell:

2014 Financial Statements: Consolidated Financial Statements of the Holy See and Financial Statements of the Governorate of Vatican City State

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 Governatorato.  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 Prefettura for Economic Affairs and the Secretariat for the Economy and Council members expressed their gratitude for the rigourous 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 25.621 M Euro which is similar to the deficit of 24.471 M 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 37.209 M 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 (21 M Euro) and the contribution from Institute of Works of Religion (50 M Euro).

Net Assets increased by 939 M 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 1,114 M Euro and liabilities amounted to 222 M 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 (126.6 M Euro) and the Statements indicate total staffing of 2880 in the 64 Holy See entities included in the consolidation.

The Financial Statements for the Governatorato for 2014 indicate a surplus of 63.519 M Euro which is a significant improvement on the 2013 surplus of 33.042 M Euro, largely due to continued strong revenue from the cultural activities (especially the Museums) and favourable movements in investments.  Net Assets increased by 63.5 M Euro and there were no adjustments necessary to include additional assets and liabilities in closing balances for 2014.  The Statements indicate a total staffing in the Governatorato of 1930.

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 Governatorato 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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