Kinnock under fire over bid to extend financial control reform

Date: 20/07/2000

By John Shelley

FINANCE chiefs from the European Parliament and the Council of Ministers have clashed with the Commission over plans to reform their auditing systems.

Financial controllers from the two institutions and those from other EU bodies argue that they should not necessarily be forced to abide by the strict new accounting rules laid down for the Commission by its Vice-President Neil Kinnock.

They point out that, unlike the Commission, other Union institutions have not been accused of any wrongdoing in the past, are not being swamped by an ever-increasing number of payments, the amounts they deal with are much smaller, and they do not have the huge budgets needed to make the reforms work.

Under current rules, financial controllers perform a dual task of both approving payments before they are made and then auditing their own books to make sure they are in order.

Kinnock argues that this creates a conflict of interest and insists the two processes must be separated, with an internal auditor taking over responsibility for post-payment monitoring and the prior approval process eventually abolished altogether.

This is seen as a key plank of the Commission's bid to improve its accounting procedures and its image. But while financial controllers accept the need for these changes inside the EU executive, they insist it would be foolish to extend them automatically to smaller Union bodies, including the Economic and Social Committee and the Committee of the Regions.

"The reality is that no one has ever complained about conflicts of interest in any of the institutions other than the Commission," states an internal memo.

Dutch Socialist MEP Michiel van Hulten has suggested a compromise under which the assembly and the Council would be required to use separate auditors but smaller EU bodies would be able to choose whether or not to do so.

He argues that it would reflect badly on the Parliament if it did not appear to have the cleanest possible accounting system. "I think politically it would be unsupportable to say the Commission should have this system but the Parliament should not," he said. "On the other hand, it could be overkill to have an internal auditor for the smaller institutions when the financial control staff is only four people anyway."

Finance chiefs from the European Parliament and the Council of Ministers have clashed with the Commission over plans to reform their auditing systems.