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EU funds still out of control
Date 14/11/2009 00:40  Author admin  Hits 2277  Language Global


Only 9 percent of 2008 budget accounts cleared by auditors

The Court of Auditors annual report on the 2008 accounts shows no improvement on the previous year, even if many here would like to believe that things have become better. More than 10 years after the resignation of the discredited Santer Commission and following many promises of reform, the picture remains quite the same: the EU funds are out of control.

The accounts are deemed to be reliable by the auditors who, however, fall short of stating that they give a true view of the finances of the EU and they only leave it at "fair view". They reiterate their concerns about the weaknesses in the accounting system and their impact in the quality of the financial information.

The report reveals that 10 years after the introduction of administrative reform, the European Commission still does not operate an integrated accounting system and the directorates introduce the transactions in their local systems, two of which have not even been blessed by the Chief Accountant of the EC, this situation affecting the control environment significantly.

On the legality and regularity of the EU expenditure the European Court of Auditors only cleared 9% of the total budget, a percentage similar to past years (Administrative expenditure and Education and Citizenship). 

As for the rest, the auditors gave an ADVERSE OPINION on 43% of the budget related to Cohesion funds, Research, Energy and Transport, External Aid, Development and Enlargement.

For the remaining 48% they gave a QUALIFIED OPINION mainly due to the level of errors found in the expenditure of Rural Development funds. The court specifically identified 11% of the latter payments which should not have been made, that is equivalent to 1.3 billion euro that have been misappropriated!

The Accounts for 2008 show a huge figure for pre- financing (funds paid out for which implementation the Commission has not received any documentation) which should also be considered as payments out of EU coffers and which represent 45% of the total assets of the EU and 33% of the 2008 annual budget.

I heavily criticised this level of pre- financing which becomes a high risk given that it has been disbursed on the areas where the European Court of Auditors have found the highest level of error and where they issued the adverse opinion.

No response was obtained from either the Commission Chief Accountant or the Auditors about the completion of the data on advances paid out. That information is gathered from declarations by the different Directorates and not from the processing of the payment transactions into the accounting system.