European Court of Auditors and Commission at odds over EU accounts

4.12.09pm BST (GMT +0100) Tue 24th Oct 2006

Yesterday evening the European Court of Auditors presented a damning report on EU budget implementation in the year 2005 to MEPs in Strasbourg. The assessment marks the 12th consecutive year of a negative assurance. Despite evident improvements in the accounts themselves, following the introduction of accrual accounting practices on 1st January 2005, the Court considered that the European Union budget still contained sufficient material errors to warrant its judgement.

In a preliminary assessment, European Liberal and Democrat MEPs noted that in most areas the Court had identified little or no progress from previous years - notably in over-stated claims in agricultural expenditure and a failure by at least one Member State - Greece - to apply the IACS (Integrated administration and control system) which has helped reduce fraudulent claims where it has been introduced.

In the area of structural funds, and more or less also for R&D funds, the Court identified cost declarations bearing no relation to co-financed action and incomplete documentation. Other criticisms, including some directly managed projects financed through grants to private and public beneficiaries, pointed to a need to simplify rules, procedures and reimbursement systems to reduce the instance of material errors ranging from a lack of supporting evidence to unjustified indirect costs such as man-hours spent on a project.

Andrew Duff Euro-MP for the East of England said "Much of the problem lies at the level of the member states. National ministries are not collaborating sufficiently with the services of the Commission to ensure rigorous control of EU spending. HM Treasury is singularly untransparent in the way it manages EU finance. National parliaments are hopeless at helping the European Parliament hold the spending authorities to account."

ENDS