Commission sets up new audit service

Date: 04/05/2000

By Simon Taylor

THE European Commission took the first concrete steps towards improving financial controls within the institution this week, but it will be at least another year before the changes planned by Vice-President Neil Kinnock can be implemented in full.

A new Internal Audit Service (IAS), which began work this week, will vet the financial decisions taken by Commission officials to ensure they have followed the correct procedures. A Centralised Financial Service (CFS) has also been set up to advise directors-general and other staff on how to comply with new decision-making rules.

But officials admit that some elements of the new system will not be introduced for at least 12 months, as EU finance ministers must first approve complex changes to the existing procedures laid down in the Union's financial regulation. However, they say Budget Commissioner Michaele Schreyer intends to seek fast-track approval for some key changes to allow them to be introduced much earlier.

The IAS is seen by Kinnock as a crucial part of his efforts to stamp out fraud and improve the administration's monitoring of the way taxpayers' money is spent. Special procedures will be used to recruit an outsider to head the service and find auditing experts to work alongside existing officials, with the aim of bringing the department up to its full strength of 65 by the end of this year.

While the IAS will begin its new monitoring role immediately, its work and that of the CFS will be hampered initially by having to operate under the old, discredited financial management rules to start with.

Kinnock has proposed scrapping the existing system under which decisions are approved in advance provided certain procedures have been followed. The new rules would require decisions to be vetted afterwards to ensure all the necessary conditions have been met.

The European Commission took the first concrete steps toward improving financial controls within the institution the week beginning 1.5.00 but it will be at least another year before the changes planned by Vice-President Neil Kinnock can be implemented in full.