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Tag ‘EU accounts’

European auditors point to errors but sign off EU’s accounts – some UK media decline to listen to what the auditors say

Wednesday, November 6th, 2013

UK media – for example the Daily Mail, Daily Express and the Times – yet again reported that the European Court of Auditors (ECA) has not signed off the EU accounts. Some media -this time including the Daily Telegraph – claim that UK taxpayers will be liable to pay back GBP 800 million. Both statements are simply false.

The Court did in fact sign off as accurate the EU’s accounts for 2012 – as it has done each year since 2007. It stated this clearly in its press release

The ECA (not the European Commission) was so concerned by the flagrant inaccuracy of so many reports that it tweeted Mail online and other media in UK and beyond to request changes @EUAuditorsECA

The ECA annual report tracks the amount of errors that affect financial transactions under the EU budget against a stringent set of rules and procedures.

Many media neglect to emphasise that – while the Court makes clear the Commission also has more work to do – most of the errors take place at national level, including frequently in the UK, and concern decentralised programmes like agriculture and regional funding rather than money managed centrally in Brussels. Member States are responsible for managing 80% of EU funds.

They fail to mention that where errors have serious budgetary effects, the Commission succeeds in clawing most of the money back so it can then be used for other projects: about £3.8 billion/EUR 4.4 billion in 2012.

So the fact that the error rate for 2012 is 4.8% (compared to 3.9% for 2011) does not mean – as the newspapers claim, despite having the situation fully explained to them – that the extrapolated amount of money from the EU annual budget total is written off.

Nor does this mean that the UK (or any other member state) will have to pay back any amount into a bank account in Brussels.

Neither does the fact that a project has not fully adhered to the procedures as it should have, always signify that the money is wasted or that the main project objectives were not achieved.

For example, if member state authorities spending EU money on a new bridge did not properly follow public procurement rules – that is not acceptable. But it does not mean that the bridge is not built or the money is wasted.

These Court of Auditors reports and the increase in the error rate this year, after a long period of improvement, are serious matter, something which the Commission fully recognises. It has in the past seven years endeavoured to reduce the number of errors by introducing modern accounting practices, tighter rules on EU spending, stricter supervision, and stronger control measures.

Under the next seven-year budget 2014-2020 the EU will implement further reforms to simplify the system and introduce even more stringent rules to encourage all Member States – including the UK – to take more care about the way they spend EU funds.

For example, the Commission has had to claw back from UK nearly EUR 300 million in corrections to UK administered EU agriculture spending over the last three years. There have also been significant errors in regional policy –payments to UK programmes have had to be interrupted several times.

As a reader put it on one of the newspapers’ blog threads – this is not the EU wasting member states’ money, but member states misspending European money.

That is certainly a very simplistic summary.

But it is perhaps less simplistic than much of the media reporting of the ECA report which has yet again seen newspapers throwing incorrect figures around to kindle public outrage.

Express seems to complain about EC protecting taxpayers’ money

Monday, July 15th, 2013

The Sunday Express claims in its article “£270m EU cashback row“, 14 July 2013 that a political row has erupted over refunding of money for EU funded regional projects in the UK. Serious allegations are made in the article. The European Commission is therefore setting the facts straight here.

The  Commission has indeed interrupted interim payments for English regional programmes. It has done this because the UK’s own auditors – not “Eurocrats” –  have identified  serious deficiencies in the national management and control system for these payments.

When problems at national level are spotted, as they have been on this occasion – and others – in the UK, the Commission acts to protect taxpayers’ money by  interrupting payments until the issues are resolved. The Commission has done exactly the same when similar issues have arisen in other Member States.

The payments can resume as soon as the UK auditors’ concerns have been addressed.

What is more the article says: “For 18 years in a row, auditors have refused to sign off EU accounts amid allegations of fraud and waste.”

First, the European Court of Auditors has for years now given an overall green light on the Commission’s financial accounts for centralised spending, in simplified terms money spent directly by “Brussels”.

Its reservations persist in areas where – exactly as in this case – money is managed jointly with Member States and spent at national level.

Second, the Court of Auditors has clearly said every year that most of the problems are not a matter of “fraud and waste” but of errors, many of them technical and having little effect on the final outcome of spending.

In addition, the audit of EU spending is very stringent and accounts are viewed as a single entity, unlike most national accounts. Former UK Comptroller Sir John Bourn once said to the House of Lords that if he had had to operate a  similar system to the EU one: “I might have to qualify the whole of British central government expenditure.”

Nevertheless, the Commission agrees that performance needs to be further  improved and continues to work to get the error level below the target of 2%.

It  can only do that if all Member States, including the UK, also up their game.

It would seem perverse to insist on the need to improve financial control of EU spending, but to object when such control is exercised.

The EU has not “wasted £89 billion in one year” (Express, 7 Nov)

Monday, November 12th, 2012

On 12 November the Daily Express published a letter from Algirdas Šemeta, European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud correcting their grossly misleading article (Nov, 7). Good to have our position reflected in the Daily Express –for a change, even though post-factum. Also interesting to show what of the Commissioner’s reply was left out.

Commissioner Šemeta’s letter:

“Auditors certified the accounts accurate for the fifth year running.

They said that 3.9% of EU-financed activity involving about £4 bn did not fully comply with all relevant rules. This is serious. But it does not mean the money was wasted or misspent. An “error” can be anything from a missing signature to a mistake in a tendering procedure. It does not mean fraud, which affects 0.2 % of the EU budget.  Neither does it mean the mistakes were made by “Brussels”. The auditors blamed the Member States – who manage 80% of EU funds – for the vast majority of errors, with the UK among the five with the most errors found.  The European Commission has reformed its accounting and proposed big steps to further improve management of EU funds. But those can only deliver if Member States, too, step up to the mark.”

What the Express published:

Auditors certified the accounts accurate for the fifth year running.

They said that 3.9 per cent of EU-financed activity involving about £4billion did not fully comply with all relevant rules. This is serious. But it does not mean the money was wasted or misspent. An ‘error’ can be anything from a missing signature to a mistake in a tendering procedure. It does not mean fraud. Neither does it mean the mistakes were made by ‘Brussels’. The auditors blamed the Member States – who manage 80 per cent of EU funds for the vast majority of errors.

EC in the UK

Check the EC Representation in the UK website

Please note that all statements in all entries were correct on the date of publication given. However, older archived posts are not systematically updated in the light of later developments, for example changes to EU law.

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