EU accounts rejected for 13th consecutive year

Auditors have failed to sign off the EU’s accounts for the 13th year in a row, criticising most major areas of its expenditure.

The European Court of Auditors 2006 report, published yesterday, cites weak internal controls both at the Commission and in the member states as the main reason why 80% of the EU budget failed the audit. 

“Reasons for the errors in the underlying transactions include neglect, poor knowledge of the often complex rules and presumed attempts to defraud the EU budget,” Court of Auditors President Hubert Weber said. “I believe that the EU’s citizens are entitled to expect EU funds to be properly managed and controlled across the Union”, he added. 

The Commission budget for last year amounted to 107 billion euros. The court’s report, published annually, examines irregularities in the EU executive’s spending. 

The report singled out irregular payments under the Commission’s structural and farm policies as particularly problematic. It said 12% of regional aid was not properly accounted for, and stated “among new beneficiaries of EU agricultural aid are railway companies, horse riding and breeding clubs, golf and leisure clubs and city councils”. 

However, the report also revealed a significant reduction in the estimated overall level of error in Common Agricultural Policy (CAP) payments, and auditors praised the “considerable efforts” made by the Commission to address weaknesses in its fund management, particularly underlining the effectiveness of the Single Payment Scheme. 

Responding to the report, Commission Vice-President Siim Kallas highlighted the “real progress” made by the EU executive, adding that he was “glad to see the Court now gives its green light to over 40% of total payments”. He pointed out that about a third of the budget was approved last year compared to just 6 per cent three years ago. 

He conceded that structural funding was a problem area, but said that member states themselves need to do more to reduce errors in their management systems. 

Court President Weber concluded that “the Commission should lead by example by paying particular attention to devising and operating its own internal control systems effectively in the area of directly managed EU funds” – referring to its internal and external action policies. 

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