7th Jul 2020

Top financial watchdog slams EU accounts system

The European Commission was under pressure on Monday, as the EU's top financial watchdog has not been able to give the EU's accounts the all clear for the ninth consecutive year.

In its annual report on the 2002 financial year, the European Court of Auditors expressed a number of reservations regarding the Commission's accounting system and also said that the Commission's timetable to modernise the accounts by 2005 is "too optimistic".

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The report also indicates that 7.4 billion euro of the EU budget was left untouched and criticised the slow implementation of the SAPARD programme - which promotes rural development in the applicant countries - as only two percent of the available funds have been transferred to the final beneficiaries since it became operational three years ago.

The Court's report will be used as the basis for the European Parliament’s decision on whether to sign off the 2002 accounts.

But further pressure is set to mount on the Commission, as 2002 was the year when the Commission's former chief accountant, Marta Andreasen went public with her accusations that the Commission’s accounting systems are open to fraud and mismanagement.

"If the situation is to improve, it will be necessary to continue to strengthen the management systems of the Commission and of the Member states and to move the administrative reform process forward", the President of the European Court of Auditors Juan Manuel Fabra Vallés told MEPs.

Mr Fabra Vallés also raised the issue of the Eurostat scandal and said that it is "imperative that any abuses be dealt with vigorously".

In its 1993, 1998 and 1999 Annual Reports, the Court drew attention to the management of various contracts concluded with CESD and said that "the problems which were pointed out at the time are clearly linked to the management shortcomings which are now being laid at Eurostat's door", the Court's President said.

"It is both saddening and disheartening to encounter irregular practices which we believed had already been eliminated", he added.

Budget Commissioner Michaele Schreyer, however, defended the reforms, saying that things are "moving forward".

Some MEPs, though, are of a different opinion.

"The number of reservations have stayed the same", Austrian Socialist Herbert Bösch said, adding that the report outlines a "whole list of irregularities".

"Yet again this report questions the reliability of the Commission's accounting practices and the accounts themselves", UK Conservative Chris Heaton Harris said.

"The current Commissioners have presided over 3 years of dodgy accounts. Unless they can assure us that the 2003 accounts are correct, their legacy to the EU's taxpayer will be a decade of fraud".

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