Auditors ‘sanitize’ whistleblower claims

Date: 05/06/03

By David Cronin

THE European Court of Auditors has decided not to publish a controversial draft report accusing the Commission of not heeding warnings that its accounting system "has obvious risks regarding its reliability".

In February last year, the Luxembourg-based financial watchdog sent a draft of the Accounting and Management Information Systems in the field of external relations report to the Commission's Brussels headquarters.

Court insiders have confirmed that this document is not to be published because the institution's top table has decided the criticisms contained in it relate to 2001 and are no longer valid.

Instead, the Court sent the Commission an eight-page letter on 8 May, giving what one European Parliament source called a "sanitized" summary of the document.

The original draft report backed criticisms made by whistleblower Marta Andreasen, who was removed from her post as the Commission's accounting officer during 2003 after claiming the institution's bookkeeping system Sincom 2 was "vulnerable to fraud".

After details of the draft report were leaked to the media last autumn, the Court issued a statement saying it was an internal working document, rather than one which had been formally endorsed by the institution.

The draft report said that the Commission had been warned about risks covering the use of Sincom 2 "but to date has not taken any remedial action".

"These risks stem in particular from the lack of security surrounding the running of Sincom 2, from its complexity and from the failure to apply generally accepted accounting standards," it added.

The document stated that these problems made it difficult to adapt the system to the Commission's offices outside the EU and also in some of its departments, where the main accounting and management software used was Excel.

The criticisms contained in the 8 May letter are milder.

They state that Sincom 2 is not geared to provide an overview of money paid and committed in programmes stretching over several years, as is "predominant" in foreign aid.

They also say that the system does not provide basic details such as the nationality of contractors and beneficiaries and where projects are being implemented.

And while Sincom 2 does record details of reimbursements made of particular sums, these are given "without any logical reference to the commitments or payments concerned, thus impeding the authorising officers to easily determine the definitive cost of an action involving reimbursements".

Moreover, the auditors note that a new system to manage data held by the Commission's external relations (Relex) departments came into place at the end of 2002 - the Common Relex Information System (CRIS).

It urges "that it is essential to carry out reconciliations" between CRIS and Sincom 2 "to avoid any risk of discrepancy in the data recorded in the different systems".

In 2001, nearly 7 of money spent from the EU's €98 billion budget went on projects in the wider world.

Replying to the Court, the Commission has said it shares the observations about the need to ensure compatibility between Sincom 2 and CRIS. It added it is working to ensure the two systems are better integrated.

The European Court of Auditors will not publish a report that accuses the European Commission of not listening to warnings concerning its accounting system.