Youth schemes dogged by suspicions of fraud

Date: 11/04/02

By David Cronin

THE EU's financial watchdog has uncovered several cases of possible fraud in the Union's flagship youth programme.

In a new report, the Luxembourg-based European Court of Auditors finds nearly 80% of the 'cultural exchange' schemes for young people under Youth for Europe were not rigorously controlled. Both the European Commission and the national agencies that administered them did not require that final beneficiaries should submit documentation proving that money allocated was spent for the purposes intended.

After finding at least three instances of suspected mismanagement, the auditors have passed on a dossier to the European Commission's anti-fraud office, OLAF.

The auditors discovered 'excessive resorting to declarations of honour' rather than clear written agreements on how the money should be used. This is 'a practice which must be condemned', they said.

'Even when taking into account the very informal nature of the sector and youth organisations' lack of financial means, the use of such declarations to justify as much as 79.5% of the total of the final accounts cannot be accepted.'

Around €134 million was spent on Youth for Europe in 1995-99. Exchange visits for people from different backgrounds were one of the main activities under the programme. But the auditors said that some of the beneficiaries were not selected according to rigid conditions: 'For example, organisations in which young people do not play an active role received funds.'

The auditors also pinpoint possible irregularities in how the Socrates education programme, on which almost €939 million was spent in 1995-99, was administered. They query whether the Commission was right to award numerous studies under Socrates to external consultants. 'No evidence can be found that all of these studies were adequately exploited by the Commission,' they said.

One unnamed university had a 'preferential position' over other consultants, according to the auditors. It won around a dozen contracts, worth more than €1 million in EU funding. Two of those contracts are being probed by OLAF.

Furthermore, the auditors believe that the Commission has delegated too much power in managing both the Socrates and Youth for Europe programmes to both national agencies and consultants providing 'technical assistance'. In one particular case, a technical assistance office (TAO) involved in them had €6.2 million from a previous programme transferred to its account in 1995 and left there unused until 1999.

'The Commission could not justify having left more than €6 million in the TAO's coffers for four years,' said the auditors. 'This situation has distorted the Commission's revenue and expenditure accounts since 1995 and is a questionable way of managing the [European] Community's funds.'

A Commission statement responding to the auditors' observations pointed out that the programmes examined had helped more than a million people. 'They helped to boost cooperation in their specific fields, along with other more political measures, which they rendered possible.

'All these parallel developments put great pressure on the Commission's inadequate human resources and explain the need to rely on alternative management methods.'

The European Court of Auditors has uncovered several cases of possible fraud in the European Union's flagship youth programme.