Auditors demand EU review

18 Nov 99
Auditors this week demanded that European commissioners seize a 'historic opportunity' and overhaul working practices in the European Union to stop the annual haemorrhaging of millions of pounds.

19 November 1999

As the European Court of Auditors unveiled a critical report of the EU's 1998 accounts, which showed errors totalling some £3bn, they said that only a change in working culture could save future audits from uncovering similar financial shortfalls.

For the fifth consecutive year the accounts were 'qualified' – effectively refused audit approval.

They called on EU managers to switch their policy focus to 'outcomes and outputs' rather than, as at present, judging whether budget allocations are utilised.

Auditors said that a 'spending culture' was still prevalent and that working procedures were too bureaucratic.

They warned that failure to change could undermine the efficiency and anti-fraud reforms brought in by the new commission headed by Romano Prodi.

'This report confirms reform is vital. It is essential to seize the historic opportunity for administrative reform created by the appointment of the new commission,' said John Wiggins, UK Member of the Court of Auditors. 'Prodi has a much stronger opportunity to change the way the community manages things.'

The report revealed there had been improvements in the Common Agricultural Policy budget, and that most errors were found in structural fund and research payments.

However, auditors were still uncovering anomalies involving agriculture. One farmer claimed a grant on a cow even though he only had a bull, and another claimed his land was used for arable crops even though it was an orchard.

Although auditors stressed most of the shortfall on the £56bn budget was simply error, there were concerns the commission has yet to get to grips with fraud.

The report, of almost 500 pages, noted that proposals to establish a European anti-fraud unit did not address all the concerns raised by auditors. It repeated concerns voiced at the House of Commons' Public Accounts Committee earlier in the year.

Its chairman, David Davis, said more needed to be done. 'Fraud prevention is an area that the commission really must start to get right and quickly.'


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