Friday 20 August 2010

Quoting Auditors

I read this yesterday, when I was looking at the Wall Street Journal's article on member states who contribute the most to the EU pot per head of population (both with and without the more direct streams of revenue, showing that it is possible to have clear data on how much is collected where through a direct tax). I've often read the arguments against the use of the Court of Auditors' reports on the EU accounts as simply proof of corruption, due to the lack of oversight in the member states' spending of the EU pot, and the requirement that all the accounts need to be cleared for the overall accounts to get the clean bill of health.

Well, this is the quote from the financial report, 2008 (PDF):

"Clean bill of health on EU acc ounts by auditors

The European Court of Auditors’ annual report delivered promising news in 2008.
It confirmed the positive trend in the management of payments, showing that the majority of payments checked were correct, with most policy areas only affected by less than 5 % of errors and, in certain areas, such as direct aid to farmers and administrative expenditure, less than 2 %. Errors were still too frequent in certain areas, particularly where grants have been managed by national authorities, such as for cohesion policy.

Acknowledging the results of the Commission’s sustained efforts to modernise its accounting systems, the European Court of Auditors lifted its last remaining reserves on the EU accounts. The Commission is currently one of the few public administrations worldwide that operates full accrual accounts, giving it a comprehensive overview of its current and future assets and liabilities. Together with FEE, the European Federation of Accountants, it jointly organised a conference on the state of play and future prospects of accrual accounting in the area of public sector management. The main documents related to the conference can be found here:"

Of course, this doesn't mean that more scrutiny isn't necessary (see this article for a diagram on how money is spent in the EU). It may be sensitive for national administrations to audit themselves and present clearer accounts. It was disappointing when a Dutch suggestion for member states producing a certificate of good health of their own spending of EU funds was given the cold shoulder. As recent events have shown, sometimes visits from European auditors can turn up interesting facts in national and regional administrations.

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