Auditor warns EU managers over financial control

By Tim King

Date: 16/06/05

The internal auditor of the European Commission has warned in his annual report that managers must improve their control of EU finances and has highlighted weaknesses in the use of financial audits.

"Important weaknesses still exist in areas such as grant management and tendering, management supervision and ex-post controls. These weaknesses should be addressed with urgency," warns the internal auditor, Walter Deffaa.

His comments were made public yesterday (15 June) in a report to the Council of Ministers and the European Parliament from the Commission, a shortened version of Deffaa's annual internal audit report.

"Management must ensure that proper supervision is in place," he said, adding that "management supervisory controls still need to improve considerably and be better evidenced".

Deffaa criticises the way Commission departments manage financial audits of those who receive EU money, saying that some departments are incapable of forming an overview summarising the number and value of their contracts, the coverage achieved, the error rates and the recovery orders issued.

A separate report from the Commission notes that Deffaa has warned managers to pay particular attention to the risks of "double funding, collusion, conflict of interests, insider trading, concentration of Community funds on certain contractors or beneficiaries and dependence on contractors in case of outsourcing".

Walter Deffaa, Internal Auditor of the European Commission and Director-General of the Internal Audit Service, on 15 June 2005 presented a report to the Council of Ministers and the European Parliament. In the report, which was a shortened version of the annual internal audit report, Deffaa warned that managers must improve their control of EU finances and highlighted weaknesses in the use of financial audits.