I’ll stand by my guns, says accounts chief

Date: 06/02/03

Jeremy Woolfe meets the man who took over from whistleblower Marta Andreasen as the European Commission's 'CFO'

THE European Commission has changed its accounting officer - the equivalent of a chief financial officer - four times in one year, which, outside pantomime, is inconceivable.

Any blue chip company, where CFOs tend to stay at least five years even in these challenging times, would be likely to smell something fishy.

Marta Andreasen would tend to agree. She was booted out last May after describing the Commission's auditing system as "vulnerable to fraud".

Brian Gray, the man who has replaced her (Marc Oostens took the job temporarily before him), expresses some sympathy for his notorious predecessor. As a Commission 'outsider' - she was brought in by Budget chief Michaele Schreyer after a controversial stint at the Organisation for Economic Development and Cooperation - the challenge Andreasen faced was "severe", he says.

Gray, by contrast, is an old EU hand. He was recruited from Deloites by the European Court of Auditors back in 1978 and moved to the Commission in 1993.

The role of the European Commission 'CFO' is very different from that of his opposite number in a blue chip company.

The Commission makes no profit, but the scale of its financial activities puts it up there with global corporations. Consolidated annual sales for Belgium's Solvay Company may run at around €9 billion. Citibank's turnover reaches 75 billion (€70 bn).

The Commission's budget is just short of €100 billion.

However, it has had to evolve a different management culture from that of a commercial entity.

Its 'shareholders' are national governments and MEPs, while its directors comprise the 20 commissioners. Honest dealing rests heavily on these individuals.

Gray, a 56-year-old Briton, will be more aware of these realities than most. His first post with the Commission was at DG Agriculture, where he won a reputation for pushing through measures that clearly defined management responsibilities. These included setting up paying agencies and introducing detailed auditing procedures - "radical stuff" at the time, he acknowledges.

By 1998 the 'error rate' on DG Ag's balance sheet had been reduced to something like 3-5%, satisfactory enough for the Court of Auditors. Gray makes the point that auditing is not an exact science. A precise count of all olive trees would need an accountant on every olive grove, he laughs.

In 1999 Gray took another step up the ladder, to director rank, at the regional affairs directorate. The error rate for structural funds there "was rather high". Again, he brought it down to a satisfactory level.

But the Commission as a whole has not been quite as successful. Every year since 1994 the annual accounts have failed to gain the Court of Auditor's certificate of assurance. The much-needed reforms have been slow coming. Andreasen said last week that changes to the accounting system originally slated for 2000 would not now come into full effect until 2005 - after the current Commission reaches the end of its term. "It looks like a self-preservation gambit," she said.

Gray, however, points out that many of the problems she identified occur because of irregularities in member states or the 100 or so autonomous regions, but "in the end it is the Commission that gets the blame".

Although he has only been in the job for a month, Gray could be forgiven for appearing a little care-worn. In fact, he looks fit and keen to get on with the job.

Tall, slim and quietly spoken, he comes across as friendly and relaxed. But don't be misled: colleagues say he is tough.

The newly promoted deputy director-general - an A1 position - acknowledges that one of his immediate challenges will be to help see clearance of the 2001 EU accounts through the European Parliament, the so-called 'discharge' procedure.

Putting the accounting system to rights is his other main priority. What does this require? Having "a pretty clear mission" and then "standing by your guns", he says.

Major artillery may be fired on 18-19 March, when Parliament's budgetary control committee (Cocubu) presents a report on the 2001 accounts to MEPs.

These are due for acceptance on 8 April at Strasbourg.

But there are whispers that the Commission might delay responding to a lengthy questionnaire from the committee.

Expect a mighty hue and cry from MEPs if there is any sign of procrastination. In such circumstances, would the odd Commissioner's head have to roll?

After all, there could hardly be another CFO hauled off to the executioner's block.

Interview with Brian Gray, who took over from whistleblower Marta Andreasen as the European Commission's accounting officer.