Press Release - Financial Management in the European Union
18 April 2007
The European Commission and Member States have made progress in
strengthening the financial management of European Union funds,
according to a report today from the National Audit Office. But for
the thirteenth year in a row the European Court of Auditors (ECA)
did not provide a positive Statement of Assurance on the legality
and regularity of expenditure.
Today’s report summarizes the results of the Court’s examination of
the European Union’s accounts and progress on the range of
initiatives being taken forward by the Commission and Member
States.
In the Common Agricultural Policy (which represents the largest
expenditure component), the Court noted a marked reduction in the
overall error to a point where it was just above the level at which
a positive opinion could be given. Despite problems with its
implementation in the UK, there are indications that the
introduction of the Single Payments Scheme and the continued
application of the Integrated Administration and Control System
have helped achieve a lower error rate in those Member States which
have adopted the Scheme.
Achieving a positive Statement of Assurance in funding for
Structural Measures, which are designed to reduce disparities in
the level of development between regions and Member States, remains
the most challenging component of the budget. Generally ineffective
or moderately effective control systems within Member States, and
only moderately effective supervision by the Commission, led the
Court to conclude that this expenditure was subject to material
error.
In March, the Commission confirmed a decision to impose a financial
correction of some €25 million (£17 million) on the United Kingdom
for not exercising its supervisory role in an effective manner in a
European Regional Development Fund programme in the
North-West.
A number of Member States, including the United Kingdom, have
indicated their intention to improve transparency of the
expenditure of European Union funds through some form of enhanced
reporting to their national parliaments. As part of this initiative
the Treasury will publish, in June 2008, its first annual
consolidated statement on the United Kingdom’s use of European
funds.
Tim Burr, head of the National Audit Office, said
today:
“There has been some improvement in financial management of EU
funds in 2006, but there are still significant challenges to
achieving a positive Statement of Assurance on legality and
regularity of expenditure. To reduce the level of error the
Commission needs to strengthen its supervision of Structural
Measures expenditure. But with some three-quarters of European
expenditure managed by Member States, they too have a major role in
improving the financial management of European Union funds. The
United Kingdom’s forthcoming account of its own use of European
Funds is a helpful development.”
Notes for Editors
- The European Court of Auditors is the external auditor of the
European Community. The Court reports annually on its findings on
the management of Community funds. It also provides an annual
Statement of Assurance on the reliability of the Community’s
accounts and the legality and regularity of the underlying
transactions. The Court is made up of one member from each Member
State.
- EU expenditure in 2006 was over £72 billion (€106.6 billion),
with £2.9 billion (€4.3 billion) in net UK contributions – the
second highest after Germany.
- The Annual Report of the Court of Auditors concerning the
financial year 2006 was published in the Official Journal of the
European Union in November 2007.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Tim Burr, is the head of
the National Audit Office which employs some 850 staff. He and the
NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 22/08
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5339
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