Schreyer bids to end delays in paying bills

Date: 29/06/2000

By John Shelley

Budget Commissioner Michaele Schreyer will propose a series of measures next month to slash the time the European Commission takes to pays its bills.

Schreyer will suggest that the target time for making payments should be cut from 60 to 45 days, that the amount of paperwork involved in approving invoices should be reduced, and that contracts should be improved so that creditors have a clearer idea of when to expect payment.

The move follows a flood of complaints to EU Ombudsman Jacob Söderman from businesses angry over the Commission's failure to pay its bills on time. It is also designed to counter accusations that the Commission is failing to practice what it preaches, after championing proposals to punish late payers in the private sector which were recently approved by EU governments and the European Parliament.

Internal Commission figures reveal that the number of payments delayed beyond the 60-day target is increasing steadily. In 1999, 20% of payments took longer than 90 days compared with just 7.5% in 1995.

In a paper due to be adopted by the full Commission next week, Schreyer will argue that the problem needs to be tackled on several fronts. She will not only suggest cutting the target time for payments to 45 days, but will also propose setting a firm rule that no payment should take longer than 90 days. In addition, she hopes to simplify the invoice approval procedure, which has become increasingly over-burdened by an 80% increase in the number of payments made by the Commission over the past four years.

To this end, she will suggest that the number of documents which creditors need to supply with their invoices be reduced, most notably by setting standard amounts for certain types of costs, including travel expenses, so that receipts do not need to be provided for every item. "One of the main reasons for the delays is that there is just so much paper work involved in the process," explained a Commission official.

In a further attempt to save time, Schreyer's paper will also suggest that the EU executive should keep bank details of all contractors in a central ledger and set up an early warning system so that companies submitting invoices which are likely to take a long time to process can be warned in advance. Schreyer will also propose revising Commission contracts to include more details clarifying the payments procedure.

Officials say many of the complaints about late payments result from misunderstandings over the payment system. Some companies are not aware, for example, that their invoices can only be accepted once a detailed report on the quality of their work has been completed. "The proposals as a whole should simplify the processes involved, make sure the approving of technical reports is carried out smoothly and reduce the amount of paper work in certain circumstances," said one.

Publication of Schreyer's proposals coincides with the final stages of an inquiry into the late payments problem launched by the EU Ombudsman last December in response to the 41 complaints he has received on this issue since the start of 1999.

Söderman asked the Commission to explain its poor performance and set out what it intended to do to tackle the problem earlier this year. But he was not satisfied with the institution's initial response because it defended its record by referring to documents which were not accessible to the public.

Lawyers in the Ombudsman's office have now set an end-of-June deadline for the Commission to deliver its second response, which is likely to be based on Schreyer's proposals.

Budget Commissioner Michaele Schreyer is set to propose a series of measures to slash the time the European Commission takes to pay its bills.