EU accounts failing 14 years in a row

Kalashnikov_Kid

It is my understanding that the auditors for the EU have failed to sign off their accounts for at least the last 14 years.

Here is a BBC link from 2007:

The auditors for the EU have refused to sign off the bloc's financial accounts - for the 13th year in a row.
A report by the European Court of Auditors (ECA) criticises nearly every major area of the EU's expenditure.

The auditors say there are weaknesses across the board and complain of neglect and presumed attempts at fraud.

The European Commission has blamed member states for audit failings, and says it has suspended £1.2bn in payments to English regions.

Errors persist

Errors of legality and regularity still persist in the majority of the EU's 106bn euro annual budget (£75bn), according to the Court of Auditors. Its President, Hubert Weber, calls on the commission to lead by example in making improvements.

The report explains that much of the misspending is caused by poor knowledge of complex rules but presumes that fraud also exists.

On the plus side, the auditors say that there has been a marked reduction in the estimated overall level of error in the Common Agricultural Policy (CAP), responsible for some 40% of all EU expenditure.

The commission is responsible for overseeing the handling of the budget and the auditors praise the "considerable efforts" made to address the weaknesses in its management of risk to EU funding.

Payments to UK

But the second biggest slice of the budget - regional development funding (32.4bn euros in 2006) - is said to have seen little improvement. The Court estimates that at least 12% of the total paid out was affected by errors, and complains of poor control by member states.


The commission says it suspended 1.7bn euros (£1.2bn) in structural payments to the UK in April 2007 although that figure has now fallen to 326m euros (£229m).

In response to the report, the Vice-President of the European Commission, Siim Kallas, says he's "glad to see the Court now gives its green light to over 40% of total payments".

He points out that around a third of the budget was approved last year and only 6% three years ago.

Interpreting figures

Marta Andreasen, a former European Commission chief accountant who now works for the United Kingdom Independence Party, says 80% of the budget is still suspect.

She arrives at this figure by including the whole of the agriculture budget, even though a large part of it - 70% - has now been cleared by the auditors.
Mr Weber describes Ms Andreasen's analysis as "the more orthodox approach", but says Mr Kallas's statement that 40% of payments get the thumbs up is also valid.

The BBC's Jonny Dymond in Brussels says it is clear is that huge strides have been made in controlling the way that money is spent by the EU.

"There is now a determination, bordering on desperation, in some quarters, to show that the commission is not handing out cash willy-nilly to greedy famers and the like," he says.

He adds that commission officials complain that there is little they can do when money is disbursed by the governments of member states, as 80% of it is.

http://news.bbc.co.uk/1/hi/world/europe/7092102.stm

How could such basic incompetence be allowed persist for so long?

These factors bring up questions of lack of accountability, efficiency and economic wastage, at the very least.

If this farcical situation has been allowed to continue, why should anyone believe that Lisbon is magically going to solve all the ills of the EU and immediately turn it in to an accountable, efficient, transparent and equitable governance union of nearly half a billion people?

Scofflaw

The short answer is that the accounts are signed off, and have been every year. They are also 'qualified' by virtue of an additional hoop that the EU has set itself to jump, which is that not only are the accounts a 'true and fair account' (which is the normal accounting standard, and on which basis the EU accounts have been passed every year) but that, in addition, there were no such things as late payments or missing information from a form.

If you can think of any company (never mind government department) that could pass such a check, do let us know.

cordially,
Scofflaw

ei.sdraob

Kalashnikov_Kid wrote: »

EU's 106bn euro annual budget (£75bn)

that will buy one what in 2009?

1x NAMA
1x Anglo Irish Bank
5x Ministers wages



on more serious point, good question, why dont the accounts add up? perhaps we could lend them Liam Carrol's accountants

K-9

I wonder would the BBC pass the same test the EU uses?

The EU accounts pass the normal "fair and true" view used by Accountants and Auditors generally.

ei.sdraob

or the US Federal Budget

EU - 106bn euro

vs

2010 United States federal budget - $3.60 trillion (submitted 2009 by President Obama)
2009 United States federal budget - $3.10 trillion (submitted 2008 by President Bush)
2008 United States federal budget - $2.90 trillion (submitted 2007 by President Bush)
2007 United States federal budget - $2.77 trillion (submitted 2006 by President Bush)
2006 United States federal budget - $2.7 trillion (submitted 2005 by President Bush)

source: http://en.wikipedia.org/wiki/United_States_federal_budget

BlitzKrieg

wasnt there a list of all the other organisations that have failed the same requirements over and over and at worse levels?

edit: Ahh I see someone named the US federal reserve.

marco_polo

The real weak link in the chain is that 80% of the budget is actually controlled and distributed by member states.

It is more a case of an abundance of errors, rather than fraud.

http://www.euractiv.com/en/pa/kallas-raises-pressure-eu-accounting-standards/article-168719

nesf

The biggest issue is indeed the member state controlled areas. For the EU to pass this test, every CAP payment for example, in every country has to go through perfectly with no example of fraud or delay in payments etc.

It's an impossible, if noble, aspiration imho.

Scofflaw

marco_polo wrote: »

The real weak link in the chain is that 80% of the budget is actually controlled and distributed by member states.

It is more a case of an abundance of errors, rather than fraud.

http://www.euractiv.com/en/pa/kallas-raises-pressure-eu-accounting-standards/article-168719

If a farmer fills out a grant form, leaving out some minor required bit of information, and the guy who gets the form says "ah well, sure it's fine, we won't make him fill it out again", that right there is an "irregularity". If your EU grant cheque is 3 days late, that there is another "irregularity".

That's a pretty high standard to aspire to.

cordially,
Scofflaw

BlitzKrieg

it also means for the last 12 years of those 14 years the EU has been relying on Fianna Fail to be honest with their funding.

*ZING!*

ei.sdraob

BlitzKrieg wrote: »

edit: Ahh I see someone named the US federal reserve.

I think that highlights exactly that EU is not a federal state

and is rather small body for what it does

I think Scofflaw quotes 38,000 people employed which makes it smaller than HSE

wasnt it Ron Paul that wanted the USA to become more like EU? with a smaller government where each state has alot more say and none of this crazy spending running into trillions

it is also worth noting that half of the EU budget is given to farmers (usually not to grow things) compared to odd trillion or so that USA spends on military (not including the current quaqmires)