British 'concerned at EU accounting standards

Britain’s spending watchdog voiced concern over financial management practices in Brussels today after auditors declined for the eighth year in succession to pass the European Union’s accounts as reliable.

The independent European Court of Auditors last November issued its findings on the EU’s accounts for its €81.5bn budget in 2001, highlighting “persistent weaknesses” in the European Commission’s accounting systems and qualifying its opinion on their reliability.

Today, Britain’s National Audit Office backed the findings and called for urgent action to improve accounting standards in the EU.

In a report on the Court of Auditors’ findings, the NAO welcomed the Commission’s progress in implementing reforms, but said it had not gone far enough.

Auditor general John Bourn said: “My report on the financial management of the EU draws attention once again to continuing problems in the management of funds.

“It is a matter of concern that, for the eighth year in succession, the Court of Auditors has qualified its opinion on the reliability of the accounts.

“I also endorse the Court’s view that the Commission should take urgent, in-depth action to deal with the persistent weaknesses in its accounting systems.

“It is vital that the UK Government carries on doing all it can, through the Council of Ministers and its other links in the Community , to support the reform process put into effect by the Commission.

“We in the NAO will continue to give a high priority to examining how community funds are managed by UK Government departments.”

The Court of Auditors’ report found that cases of suspected fraud detected in 2001 were substantially down on the previous year. Some 5,455 cases involving €516.7m of EU money were reported to the Commission by member states, compared to 6,634 involving €962.5m in 2000.

But Mr Bourn cautioned that this did not necessarily mean that fraud was declining, as there was no way of knowing how much went undetected.

Britain was the fifth largest net contributor to EU funds in 2001, found the Court of Auditors.

After taking into account a rebate of €7.3bn), the UK contributed a total of €1.8bn), behind Germany (€9.4bn), the Netherlands (€3.8bn), Italy (€2.9bn) and France (€2.7bn).

Biggest net gainers were Spain (€7bn), Greece (€4.4bn), Portugal (€1.7bn) and Ireland (€1.1bn).