EC will not meet 2005 deadline, says Muis

The commission's internal auditor Jules Muis wrote to commissioners Michaele Schreyer, who is in charge of the €79bn (£55.2bn) budget, and Neil Kinnock, who handles internal administration, on 2 July saying that the proposed timetable was 'not achievable'.

Last week Muis, who recently announced his intention to step down, appeared before the budgetary control committee of the European Parliament and said it was 'dangerous' that the entire reform process was being borne by one director general. He said there should be four commissioners involved, as it was an institution-wide project.

PricewaterhouseCoopers, who prepared a feasibility study for the commission, also warned that the project is complex and the deadline is 'very challenging'.

Drawing on the PwC report and the comments made by Muis, a number of MEPs are now openly sceptical about the target date being met. The British Conservative member Chris Heaton-Harris has called for the resignation of commissioner Schreyer.

The EU's new financial regulation requires accrual accounting - the recording of accounting events when they occur, rather than when the cash is received or paid - to be in place by 2005. According to the commission, by that year it will have the highest international accounting standards. Schreyer said that the project is 'up and running and the commission is well on track for full compliance'.

The commission has also been criticised over accounting systems and treatment of assets in the annual report by the European Court of Auditors.

It also noted that the commission will struggle to meet its plan to introduce full accruals-based accounting by its deadline at the start of 2005, because it does not have a sufficiently comprehensive framework or an integrated computerised accounting system capable of automatically generating all the figures required for accruals accounting.

The findings, which were reported to the UK parliament by Sir John Bourn, head of the National Audit Office, additionally recommended urgent action.

Earlier in the year, Kinnock struggled to get the EU accounts for 2001 approved by parliament. When they were finally approved in March, it brought to an end concerns that the parliament would withhold consent because of revelations about mismanagement that Kinnock is alleged to have ignored, notably those made by former chief accountant and whistleblower Marta Andreasen.

Ironically, parliament expressed 'concern' over the high turnover of administrative staff in such 'high ranking and crucial' commission posts.

Members said that in future, Brussels accounting officers should sign accounts presented under their responsibility. MEPs also called on the Court of Auditors to publish an error rate for each commission directorate general and also for an external audit of Brussels' treasury system.