The Office of the Auditor General
By Alessandro De Carolis
It is one of the Vatican structures resulting from the reforms in the economic-administrative field initiated by Pope Francis at the beginning of his ministry. Established in 2014 and active since 2015, the Office of the Auditor General, by statute, answers directly to the Pontiff and has as its general mission that of contributing to the correct and transparent management of the Holy See's assets. The work of the Office of the Auditor is explained in detail in this interview with the Auditor General, Alessandro Cassinis Righini.
Established by Pope Francis as part of the reorganization of the Holy See's economic structure, your office is responsible for auditing the Vatican's complex financial and administrative machinery. What prompted the Pope to set up this office? What are the fundamental objectives of the auditor's work and, more generally, of the reform undertaken by the Pontiff?
In February 2014, the Pope decided, with the Motu Proprio Fidelis dispensator et prudens, to launch the so-called economic reforms through the establishment of three new bodies: the Council for the Economy, the Secretariat for the Economy, and the Auditor General. This was the result of the work of the study and steering commission for the organization of the economic-administrative structure of the Holy See that was established by the Pope a year earlier.
At the time I was not working at the Holy See and therefore I did not witness the genesis of these decisions, but their rationale is clearly indicated in the above-mentioned motu proprio, namely the responsibility “to safeguard and carefully administer her goods in light of her mission of evangelization, with special care for the needy.”
In pursuit of this aim, two criteria have been adopted, which are intrinsically linked: on the one hand, to make the economic management of the Holy See and the Vatican City State more transparent, and on the other, to do so by equipping themselves with new structures that function with reference to the best international practices.
These two criteria are also at the basis of all the economic reforms that have followed: from the formulation in February 2015 of the Statutes [Italian only] that regulate the functioning of the Council for the Economy, the Secretariat for the Economy and the Office of the Auditor General (URG), to the motu proprio of December 2020 “Regarding certain competencies in economic and financial matters” that centralises the management of assets at the APSA, under the control of the Secretariat for the Economy.
Within this framework of reform, the URG has already been through several stages, as we have said, because “Ecclesia semper reformanda” [the Church is always in need of reform]. Essentially, it has the task of ensuring compliance with the administrative and accounting rules issued by the Secretariat for the Economy (SpE). In order to carry out its duties in the best possible way, the URG is an independent Dicastery, answerable only to the Pontiff, while collaborating with the other economic bodies, starting with the SpE and having a functional relationship with the Council for the Economy. I believe this is important to grasp: after now more than six years since the operational start of its activities in the autumn of 2015, we realize how many people within the Vatican world do not understand our role or think that we are an Office dependent on other Dicasteries. Autonomy and independence are, on the contrary, fundamental characteristics that all the Supreme Audit Institutions of the world enjoy, in order to better respond to their mission.
In carrying out its audit activities, the URG adopts the audit criteria issued by INTOSAI [International Organization of Supreme Audit Institutions], the body that brings together the Supreme Audit Institutions. This is because, as its Statutes stipulate, the URG must adhere to international best practices.
Two years ago, the Pontiff issued new Statutes for the URG, introducing a series of changes with respect to the 2015 Statute, which was ad experimentum, eliminating the position of Assistant Auditors, strengthening the powers of control of the URG, and also giving it the functions of “Anti-Corruption Authority.” What have these changes meant for your work?
I believe that this step was very important and essentially stems from the fact that in October 2016 — that is, after the creation of the URG — the Holy See decided to accede to the Mérida Convention against Corruption. This Convention provides, among other things, for each State Party to have one or more anti-corruption bodies. When it acceded to the Convention, the Holy See designated the URG as its Anti-Corruption Authority, but it was necessary to codify this task in internal law.
Beyond, or rather above, this normative passage, there is, however, a growing awareness that corruption, a broad concept on which it is not possible to dwell here, is not a phenomenon that is foreign to the reality in which we work. I do not think any further words are needed to explain why the Pope (who is always so keen to highlight, I would say on a daily basis, the scandal of corruption), felt the need to adapt the institutional apparatus to prevent and combat corruption. And he thought that the URG was the most suitable body to carry out this role, since the 2015 Statute already provided that specific reviews could be carried out whenever there are reasonable grounds to suspect, inter alia, “that an act of corruption, embezzlement or fraud has been committed.”
Among the provisions of the Mérida Convention, there is also the requirement that each State Party put in place mechanisms to make procurements more transparent. At the instigation of the URG, the “Norms on transparency, control and competition in public contracts of the Holy See and the Vatican City State” (so-called NCP) were issued in June 2020. This is a “procurement code” that aims at reducing the risk that purchases made by the bodies of the State and of the Holy See may be the occasion of corrupt acts. Without going into how it works, which probably needs some simplification in the implementing regulations, the procurement code brings Vatican jurisdiction into line with that of the most advanced countries in this field. And the URG has a supervisory role within these procedures.
From an operational point of view, the URG, which already before the new Statute and the issuance of the NCPs carried out verification activities in this area, now has the duty to do so even more systematically. This is why we always pay particular attention to the procurement process and the human resources process of the entities in which we conduct our audits: two areas in which the danger of corruption can typically lurk. And we do so, it should be noted, always in cooperation with the other control authorities, beginning with the SpE and ASIF [the Supervisory and Financial Information Authority. To this end, I have signed two Memoranda of Understanding, with the Prefect of the SpE and the President of ASIF respectively, to regulate this collaboration and the exchange of information.
It is also very important to emphasize that the URG's task is not to suppress corruption, but first and foremost to help prevent it, which we do — among other things — by issuing a “letter of comments,” which is reserved to the Dicastery head, at the end of each audit and suggesting changes to the norms, as in the case of the aforementioned NCPs.
If the audit (whether of accounts or of particular situations) reveals elements that might suggest that criminal offences have been committed, the Auditor General reports this to the Vatican judicial authorities, which can ascertain, with the assistance of the Gendarmerie, whether the conditions exist for a referral to trial before the competent court.
Another very important tool provided by the Statutes of the URG is “whistle-blowing,” that is, the possibility given to anyone, in the exercise of their functions, to report suspected “anomalies in the use or allocation of financial or material resources; irregularities in the granting of contracts or in the performance of transactions or sales; acts of corruption or fraud.” The identity of the whistle-blower is protected and the Auditor General may not disclose it to anyone, except to the judicial authorities on the basis of a reasoned decision. At the same time, the whistle-blower is immune from any liability for breach of official secrecy or any other constraint on disclosure that may be imposed by legal, administrative, or contractual provisions. These rules place our jurisdiction at the forefront of the world in the fight against corruption.
In 2016 you were appointed deputy auditor, then in 2021 the Pope confirmed you with an ad quinquennium [5-year] appointment in the role of Auditor General, which you had held ad interim since 2017. Can you draw up a balance sheet of these six years in the service of the Holy See and the Pope?
I have had the great privilege of collaborating since the creation of the URG in the implementation of the economic reforms desired by the Pope and mentioned earlier. They have certainly been intense years and I will not hide the fact that I have measured myself against a reality that I did not know, having worked for 25 years in the private sector. The reality of the situation of the Vatican is certainly fascinating, but it has its own peculiarities that we must learn to understand. These peculiarities have first and foremost to do with the special nature of the Holy See and the Petrine munus, of service to the universal Church; a mission, which, as you can imagine, is unique to this reality and which requires a deep adherence of faith, in which we all waver at times, and of fidelity to the Pope.
But there are also peculiarities in the decision-making and operational mechanisms that impact on daily life. At the beginning it was difficult to understand these mechanisms, which sometimes have their own reasons for being, but at other times end up becoming obstacles to change, and where resistance or a real aversion to transparency, which is the raison d'être of the constitution of the URG, can also lurk.
With this in mind, we have had to make the administrations subject to our control understand not only what our work consists of, with procedures that may seem abstruse and also objectively impacting on the daily life of those who already have so much to do to carry out ordinary administration, but also that, despite absolute independence and a scrupulous application of the procedures adopted, our objective is to improve the management of the economic resources of the Holy See, without ever replacing the managers and never abandoning the so-called “scepticism of the auditor.”
If in the early years there was some resistance from the Entities [of the Vatican] due to a lack of knowledge of what the audit consists of, and a lack of a habit of being audited, with time the collaboration with the Entities has improved. Since I have had full responsibility for the Office, i.e. since mid-2017, we have tried to invest a lot of time in creating a climate of mutual trust with the Entities.
The balance is therefore positive, but there is certainly more and better work to be done, first and foremost on our part, both in the thoroughness of the controls, which today concern more than 90 entities of the Holy See and the entire Governorate, and in the effort to collaborate better with the other control authorities, avoiding overlaps that end up duplicating the work of the Entities.
How is the Office of the Auditor General structured?
We are a small organization, 14 people in all, 6 of whom are women. There are 12 auditors, in addition to the Auditor General, with varying degrees of experience; they all come from leading international auditing firms and some have over 20 years’ experience. We are a close-knit group, where everyone has their own role, but a lot of flexibility is required of everyone, because in addition to the annual audits we carry out various audits on particular situations; furthermore, the Auditor General participates in the Financial Security Committee (CoSiFi), a body of the Holy See that has the task of coordinating the competent Authorities of the Holy See and the Vatican City State in matters of preventing and combating money laundering, the financing of terrorism and the proliferation of weapons of mass destruction. Given the volume of work, there is no room for organizational rigidity.
Before the pandemic, we used to organize a service day at the Caritas cafeteria in Colle Oppio three times a year. We hope to resume as soon as the health regulations allow us to do so. These are moments of gathering among ourselves, which remind us of the profound meaning of working at the Holy See.
Another important element is formation. We have participated in several courses organized by ULSA and others organized by ourselves. Each of us has an individual professional development course, because accounting standards and auditing procedures are always in flux and we have a duty to know them.
The verification and reporting tasks assigned to the auditor are fundamental to guaranteeing transparency in the Vatican's economic and financial activities, as shown by the recent judicial events concerning the sale of the London property. What results have you achieved so far and how much more needs to be done in this direction?
Obviously, I was expecting this question and, as is natural, I cannot go into the specifics of what we have ascertained regarding the London affair, for which a trial is underway.
What I can say, however, is that in this case, as in others where we have identified suspected wrongdoing, not necessarily criminal, the outcome, beyond what the judgments may establish, has been to change the modus operandi of the realities that we have reviewed, and I would say that part of the economic reforms is also the result of what we have pointed out about the reasons that could lead to wrongdoing.
Perhaps I am too optimistic, but I believe that today there is greater awareness of the risks that unlawful acts may be committed within the administration of the Holy See and of the State.
I am convinced that most of the people who work here do so with a genuine commitment to service to the Holy See and the Holy Father, and that the image that the media sometimes give of our reality is distorted in a negative sense.
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