| Author (Person) | Bower, Helen |
|---|---|
| Publisher | ProQuest Information and Learning |
| Series Title | In Focus |
| Series Details | 6.11.02 |
| Publication Date | 06/11/2002 |
| Content Type | News, Overview, Topic Guide | In Focus |
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For the eighth year in a row the European Court of Auditors have expressed their reservations in respect of the reliability of the EU's accounts in their annual report on the management of the EU's budget in 2001. Although the Court reported that the 2001 accounts give a true picture of the Communities' revenue and expenditure, it only issued a positive statement of assurance on the legality and regularity of underlying transactions in respect of commitments, own resources and of administrative expenditure. Other payments, which account for 95% of the EU's €98 billion budget and include the extensive farm and regional aid budgets, were not given a positive statement of assurance 'due to the incidence of errors found'. Presenting the 25th annual report to the Committee on Budgetary Control of the European Parliament on 5 November 2002, Juan Manuel Fabra Vallés, President of the European Court of Auditors, said:
The Court of Auditors is responsible for the independent audit of the collection and spending of the European Union's funds and therefore the way that the European institutions carry out these functions. Every year the Court publishes an annual report as part of the EU's discharge procedure (Article 276 of the EC Treaty and Article 88 of the Financial Regulation). The discharge is granted by the European Parliament, on the recommendations of the Council. The European Commission then gives an account of the steps it has taken to respond to the observations set out in the European Parliament's resolutions accompanying the discharge decisions and to the comments accompanying the Council's recommendations. This year's report is seen as more important following the suspension of Marta Andreasen, the European Commission's chief accountant, in May 2002 because she refused to sign the European Commission's 2001 accounts based on her belief that they were unreliable. Following her suspension after only four months in the post Andreasen went public with her accusations. The chief accountant's main criticisms are:
At a conference hosted by the British conservative MEPs in London to highlight the potential EU accounting problems, Andreasen is reported to have said:
The European Commission have strongly and consistently disputed Andreasen's criticisms but the Court of Auditor's annual report and one of their internal working documents, leaked to the Financial Times in August 2002, all appear to confirm the chief accountant's claims. While the Court of Auditors has questioned the reliability of the European Commission's accounting system since 1994, this latest report coupled with the high profile departure of Andreasen has served to put the issue in the media spotlight and increase the pressure on the European Commission to deliver results. The question now being asked if is the European Commission is capable of implementing the necessary reforms quickly enough. In June 2001 the European Commission drew up a draft action plan to tackle the accounting problems which had already been identified yet the Court of Auditors found that by May 2002 no start had been made in implementing this action plan, which has remained at the draft stage'. In July 2002 the European Commission did issue a press release outlining the European Commission's increased efforts to modernise its accounting system and stating that a detailed plan would be issued by the end of 2002 which would allow the European Commission to take a decision on the options for development, the proposed calendar for implementation and the projected costs. However with improvement to the Sincom 2 computer system not expected until 2003 and testing and implementation of the new accounting framework not expected until 2004 Michaele Schreyer, the European Commissioner responsible for the budget, has indicated that it is unrealistic to expect the reformed accounting system to be in place before 2005. It is now up to the European Parliament to decide if that is soon enough since it is the only EU institution that has the powers to take action. In March 1998 the European Parliament refused to grant discharge to the European Commission over its management of the EU's 1996 budget. That decision sparked off events which led to the downfall of the Santer Commission. There is now increasing speculation as to whether the Prodi Commission will follow down the same path as its predecessor. Certain MEPs have already expressed their dissatisfaction with the European Commission's performance. According to the Financial Times, Chris Heaton-Harris, the British Conservative MEP, said of the report:
These criticisms were reiterated by the socialist group spokesman on the parliament's budgetary control committee, Eluned Morgan, who criticised the European Commission for 'dragging its feet' in implementing the necessary reforms. With the EU set for enlargement in 2004 an even greater amount of money is set to pass through the EU's books making it clear that the European Commission needs to tackle the problems with its accounting system with some urgency or face its own downfall. Helen Bower An overview of the European Court of Auditors' annual report on the management of the EU's budget in 2001. |
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| Subject Categories | Economic and Financial Affairs |
