Kallas raises pressure over EU accounting standards

Audit and Anti-Fraud Commissioner Siim Kallas has sought to increase the pressure on member states and beneficiaries of EU funds to ensure their own accounting is up to standard after the Court of Auditors rejected the EU’s accounts for the thirteenth consecutive year.

Speaking at the Institute of Chartered Accountants in England and Wales in London on 26 November, Commission Vice President Kallas insisted that “the real issues to be solved […] are not linked to our accounts but to the fact that too many errors occur in the transactions that underlie them”. 

Kallas’s observations follow the recent rejection of the Commission’s accounts by the European Court of Auditors, in a 13 November report which criticised most major areas of expenditure (EURACTIV 14/11/07). Despite this, the commissioner told the Institute of Chartered Accountants that the Court’s “overall evaluation is positive” and said “any public company with accounts as accurate as ours would have good reason to be proud”. 

Moreover, Kallas reiterated that for the Commission, cooperation with member states is “crucial” for accurate accounting, especially as “out of every single euro from the EU budget, as much as 80 cents are spent and controlled by national authorities”. 

Vice President Kallas told the assembled accountants that errors in the EU executive’s financial reporting were “inevitable” as EU spending is “paid out on the basis of claims submitted by individual beneficiaries”, and singled out aid for poorer regions as a particularly problematic area. 

Stressing that “we are talking of errors, not fraud”, Kallas cited missing documents, failure to respect eligibility criteria, occasional over-declaration of costs and mistakes in the tendering procedure as examples of the most frequent errors committed by beneficiaries of EU funding. 

Tighter rules on financial disclosure are a key feature of the Commission’s Transparency Initiative, launched by Kallas in 2005. 

From 2008, EU member states will be obliged to make available the names of the recipients of aid for poorer regions and rural development, and from 2009, they must publish the names of all farmers who received direct payments under the Common Agricultural Policy the year before. 

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