European Court of Auditors - interpreting the criticisms

12.00.00am GMT Thu 4th Dec 2003

The Court of Auditors has refused to sign-off European Community expenditure for the year 2002 (the 9th consecutive year). This has lead to the misguided interpretation that the Community budget is managed poorly.

Bill Newton Dunn, Liberal Democrat Euro MP for the East Midlands, speaking after today's hearing in the European Parliament, said:

Bill Newton Dunn MEP listens to the evidence about European finance

"This situation, whereby the European Commission takes the blame for failures of the fifteen Member States to control the use of EU funds, is not fair.

"The Court did sign off the Community's accounts and approved its revenue, commitment appropriations, administrative expenditure and management of the European Development Funds. For the remaining 90% of the budget, the Court is not able to guarantee that expenditure was legal and regular. That does not mean it is irregular but rather that as this part of the budget (which includes the CAP and Structural Funds) is managed jointly by the Commission and the Member States, the Court does not have the assurance to be able to give a positive statement.

"80% of Community expenditure is implemented by the Member States, yet the Commission remains responsible for budget implementation under the Treaties. This poses a dilemma and a contradiction for controlling the EU budget and holding the appropriate authorities accountable. How can you have decentralised policies and also effective central control?

"The Commission does comes in for some criticism. But by and large the control systems which have been introduced in recent years to agriculture and structural funds are starting to make a difference. Parliament takes its role seriously and holds the Commission accountable. But we must also ensure that criticism is directed at the correct target, whether that is the Commission or the Member State governments. An open dialogue on the Court of Auditor's methodology is necessary. Agreement on changes are needed to ensure a positive statement of assurance can be reached as soon as possible. Accounting reforms are part of the key to achieving this but so is a structured approach to control systems that fully engage the Member States themselves."