This guide explains the audit and support work carried out by the NAO in the international environment.
Aimed at: staff in government departments spending UK funds overseas; Audit Offices and parliamentary oversight bodies in developing countries.
The NAO is publishing a suite of short guides for the new Parliament, one for each government department and a selection of cross-government issues, to assist House of Commons select committees and members of Parliament.
This briefing by the National Audit Office has been carried out in response to a request from the Environmental Audit Committee to provide an update on the European Union Emissions Trading Scheme covering developments since the Committee last reported on this topic in 2007.
Amyas Morse, Comptroller and Auditor General, has qualified his audit opinion on the 2008-09 Consolidated Statement on the use of EU Funds in the UK.
Public and private borrowing are high, kept affordable by record low interest rates, and quantitative easing continues ten years after the crisis it responded to.
This report forms part of the National Audi Office’s programme of work to examine how the government is overseeing and implementing the UK’s exit from the EU. It is our first report on the financial settlement, assessing HM Treasury’s estimate of the cost of the settlement.
“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.”
“I am pleased to see the Court was able to issue a positive Statement of Assurance on a larger percentage of EU spending than it had done at any time in the previous decade and that it reported that the Commission had made progress in a number of key areas of financial management, such as the development of its internal control framework.
“Last year, I said that the United Kingdom’s Presidency of the European Union in the latter half of 2005 presented the United Kingdom authorities with an opportunity to push for improvements in financial management. I am pleased to see therefore that the United Kingdom Presidency made a substantial contribution to initiatives in this area. The challenge is to keep up the momentum during the Austrian and Finnish Presidencies in 2006.”
There has been a detectable improvement over recent years in the financial management of European funds across the European Union. However, there remain seemingly intractable problems with reducing the high levels of error in some significant areas of EU spending.
“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.”
