Press Release - Financial
management in the European
Union
27 March 2009
A report today from the National Audit Office summarises the
results of the European Court of Auditors’ examination of the
European Union’s accounts for 2007 and progress on the range of
initiatives taken forward by the Commission and Member States. For
the first time the Court provided a positive Statement of
Assurance, without qualification, on the reliability of the
Commission’s accounts, in effect confirming that they give a true
and fair view. But for the fourteenth successive year the Court did
not provide a positive Statement of Assurance on whether the
underlying transactions conformed to applicable laws and
regulations.
Cohesion Policy funds, which are designed to reduce disparities
in the level of development between regions and Member States, for
example by supporting major infrastructure projects, remain the
most challenging component. Based on its audit work, the Court
estimates that, for expenditure on Cohesion projects, at least 11
per cent should not have been reimbursed by the Commission in 2007.
This conclusion reflects weakness in controls at Member State
level, but also the difficulty of implementing complex
programmes.
In the Cohesion Policy area the Commission has increased the
rate at which it recovers incorrect payments from Member States,
from €287 million in 2007 to €843 million to September 2008, and it
predicts that further corrections will be finalised in Spring 2009.
Financial corrections in future years could have an impact on the
United Kingdom.
The Department for Environment, Food and Rural Affairs included
provisions totalling some £320 million in its published accounts
for 2007-08 as an estimate for potential financial corrections in
future years. The Department for Communities and Local Government,
which is responsible for expenditure on the European Regional
Development Fund in England, included a provision of £72.9 million
in its published accounts for 2007-08 to cover potential ineligible
grant payments which could be subject to financial corrections by
the Commission.
Tim Burr, head of the National Audit Office, said
today:
"Recent initiatives have started to improve the
financial management of EU funds, but a positive Statement of
Assurance on the legality and regularity of expenditure has yet to
be achieved. The implementation of Cohesion policy remains the
chief source of error. The Commission will soon start work with
Member States on the design of future programmes. This work
presents a good opportunity to simplify some of the rules whose
complexity is contributing to error in EU spending."
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 2007 was some €114 billion (£78 billion),
with €6.1 billion (£4.2 billion) in net UK contributions – the
second highest after Germany.
- The Annual Report of the Court of Auditors concerning the
financial year 2007 was published in the Official Journal of the
European Union on 10 November 2008.
- 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
22/09
All enquiries to Sarah
Farndale, NAO Press Office:
Tel: 020 7798 5350
Mobile: 07985 274 421