Cardiff's Controversal Court of Auditors nomination

Last week the Irish Department of Finance discovered that it had counted the money borrowed by the Housing Finance Agency, leading it to overstate the Irish Government's debt by €3.6 billion. The Secretary General, Kevin Cardiff was called before a parliamentary committee to account for the mistake, but the controversy has rumbled on since Cardiff has been named as the government's nominee to the EU's Court of Auditors, which oversees the EU's budget.

Cardiff's departure is being explained in a few ways:

"The Fine Gael-Labour coalition made little secret of its desire to move those associated with the 2008 bank guarantee into different roles. [Note: He was in office at the time]. Mr Cariff’s appointment not only frees up the most senior post in the department, but also replaces a Fianna Fáil nominee at the court of auditors.

[...]

In Government circles, it had been widely anticipated the post would go to a political nominee from either Fine Gael or Labour. The speculation in Dublin was that the party, which did not receive a Luxembourg post, would have a claim on Ireland’s seat in the European Commission when next it falls vacant.

Sources familiar with the deliberations in Dublin said it was far too early in the life of the Government to consider appointing any Minister to the post. Given that the nomination is subject to the approval of MEPs, the Government was keen to nominate a figure with a financial background."

Cardiff has countered the criticism leveled at him by opposition TDs that he is unfit to take the CoA job considering the accounting mistake made under his watch:

"In his response to her direct criticism, Mr Cardiff said that as accounting officer he accepted responsibility and would act on the error to ensure it would not happen again. “If an accounting officer were to resign every time there was an error you would have no accounting officer. If they were to resign after every major error you would only have lucky accounting officers left,” he said."

However, it's not just the opposition that's exercised by the nomination, MEPs from the junior coalition party have spoken out against his appointment, as has UKIP MEP Marta Andreasen:

"Former chief accountant of the European Commission Marta Andreasen spoke out against the Irish Government and Mr Noonan yesterday for their support for Mr Cardiff. The UK Independence Party MEP said the Government was behaving irresponsibly by backing someone whom she believes is unfit for the European job."

It will be interesting to see how closely the Budget Control Committee will examine his record tomorrow.

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: http://ec.europa.eu/budget/documents/conf_accounting_1008_en.htm"

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.

Who Does What Now?

A very quick description of who does what in the EU. (Since the EU is currently divided into 3 areas, or "Pillars" and not every institution has the same amount of power in each, the question of "who does what" can get confusing...):

The European Commission: A cross between a government and a civil service. This is made up of unelected Commissioners, with one appointed by each member state every five years under the current system. It can propose laws but it can't pass them, and this power is also limited to certain areas and certain circumstances (mostly Pillar 1, which is mainly about the single market and other technical issues). It is supposed to enact EU legislation and/or make sure that those who should be doing this, are. So if you read that "the Commission has decided...", it very rarely gets to decide anything: its main function is suggesting and drafting laws.

The European Council: This is made up of the heads of government (who are also heads of state in some cases), and they meet at least twice a year. This body decides the big political issues. The presidency of this body is taken on by each of the member states in turn for 6 month long presidencies under the current system.

The Council of the European Union: the main legislator. Made up of national ministers from whatever area the issue in question involves (agriculture ministers if the issue is the CAP, etc), although the vast majority of the work is done by national civil servants. NO major legislation can be passed without this body's say-so. Can ask the Commission to draw up legislation. The main institution in all legislative areas.

The European Parliament: made up of directly elected MEPs. In most of Pillar 1 they have an equal say on legislation (amending, rejecting or passing it) as the Council of the European Union, but in Pillars 2 & 3 (foreign policy and home affairs) they have no real say. Can ask the Commission to draw up legislation under Pillar 1.

The European Court of Justice: a Court which decides on issues of EU (or "Community") law. This includes constitutional matters (which institution has the right to do what), and interpreting Community law for national courts. Has little to no role under Pillars 2 & 3, however.

The Court of Auditors: the accountants. They check and investigate the finances of the EU and its institutions.


Note: the Council of Europe has nothing to do with the EU. It was a body born out of the federalist movement, but it is an intergovernmental body and is most famous for the European Convention on Human Rights and the European Court of Human Rights in Strasbourg.