21 November 2003
The spending of the European Union is still plagued with errors, according to the European Court of Auditors, which this week refused to give unqualified endorsement of the 2002 accounts.
The EU's external auditors gave the European Commission credit for introducing new rules and standards for financial management, but said that the culture of the institution had yet to change.
They warned of risks ahead once ten more countries join the EU next May, and that the commission was in danger of botching reform of its accounting systems in pursuit of an unrealistic deadline.
The court would only give its assurance as to the legality and regularity of payments for the EU's administration and aid to countries about to join the union. These amount to less than 9% of the budget.
It refused to give assurance on the legality and regularity of payments in the remainder of the EU's £70bn annual budget, saying that farm spending was 'materially affected by error' and regional aid was affected by 'the same types of error [occurring with] the same frequency as in previous years'.
Juan Fabra Vallés, president of the court, said: 'Management systems must be improved, especially at the level of the member states.' National governments administer 80% of the budget, albeit under commission control and supervision.
European Commission president Romano Prodi said that the commission would have to introduce a new system for checking all information relating to allegations of fraud, irregularities or wrongdoing.
As in previous years, the court complained that the commission's accounting system could not guarantee the complete presentation of all assets and liabilities.
But the auditors warned that the commission's plan to modernise its accounting systems and make its accounts accruals-based in the 2005 financial year seemed 'over-ambitious'. Fabra Vallés said: 'Excessive haste might endanger the quality and depth of the necessary reform.'
Michaele Schreyer, the European commissioner for the budget, said: 'The court thinks we are optimistic. We are, of course, because we want the commission to play a leading role in the modernisation of the accounting systems for the whole of the public sector.'
The European Parliament's committee for budgetary control now has three months in which to consider the Court of Auditors' report and to decide whether to recommend approval for the management of the 2002 budget.
PFnov2003
