13th year in a row The EU Audtors unable to sign off accounts

Reporting back - Richard Ashworth MEP, November 2007

Court of Auditors report

Even before the European Union's Court of Auditors delivered its verdict on the EU's accounts on Monday night, it was easy to predict what its contents might be. For the thirteenth year in a row, the EU's auditors were unable to give a positive statement of assurance for the EU's 2006 accounts.
Trust in the integrity of the accounting procedures is a vital foundation stone of any democracy. If the people don't have confidence in the integrity of the governing institutions of Europe then we have all the credibility of a banana republic. I would like to explain in a little more depth why the auditors came to their decision, and some of the steps I have been working towards that will enable us to move closer to ending this annual debacle.
Firstly, there is the issue of inadequacy of internal controls and the regularity of the transactions the EU conducts. The court makes reference to administrative errors, misapplication of funding and the failure to follow correct budgetary procedures. While the auditors rarely make reference to fraud, they are absolutely right to say that inadequate fiscal discipline and controls inevitably leave the Commission vulnerable to corruption.
But the comments above are usually as far as the Court can go – because they can only comment on the transactions they can see, and that’s a mere 26 percent of them. 74 percent – the overwhelming majority – of transactions are carried out by the national governments and their agencies. For example, in the UK a large amount of EU money is spent by Defra. If you’re one of the farmers I recently met still waiting for their 2005 CAP payment, you will not be filled with confidence! The Court of Auditors is unable to scrutinise these accounts and, while that does not mean each of them are cooking the books, it does create a lack of transparency and accountability.
Cast your mind back to 2005, when EU leaders agreed to the seven year budget deal. The European Parliament threatened to block the whole budget unless the national governments promised to provide the parliament with evidence of self-certification for the transactions each member state carries out on behalf of the EU.
Frustrated with the glacial pace at which the Commission and Council of Ministers were moving on this matter, I put down a parliamentary question in September demanding to know what progress has been made. The response was far from encouraging. Reading between the lines, the earliest a system of self-certification could be up and running would be 2010 but, because the auditors work two years in arrears, that would mean 2012 would be the earliest we might see a positive declaration of assurance. That is simply not acceptable. Although the bulk of the criticism for this ongoing debacle rests with the governments, we must never forget that the buck stops with the Commission. Thirteen failures in a row is NOT acceptable, the Commission MUST attach far greater urgency to solving this problem.