EC launches crackdown on funding

The European Commission is set to launch a crackdown on member states over redistribution spending, in a bid to win a positive statement of assurance on its accounts.

'The commissioners were asked to be stronger, so that will be our policy over the coming year,' Brian Gray, chief accounting officer for the EC, said.

The commission already has the power to recover spending that is poorly accounted for from the member states, but the prospect of more serious attention may well see large sums clawed back.

The European Union failed to earn a statement of assurance from the European Court of Auditors for the thirteenth time in a row this week after the court drew particular attention to problems in the structural fund, the part of the EU that redistributes money to the poorest regions.

There was better news in other areas, with problems on agricultural spending measured at just above 2%, the threshold above which the court cannot give a statement of assurance. 'We have hopes [for a positive opinion] next year,' Gray said.

Over 40% of the total EU expenditure now gets a positive opinion, which is up on previous years. But the problems in the structural fund seem not to have altered. A third of the problems relate to missing documents, a third to situations where there are complex interpretations of the rules, and a final third to errors in claims for funds.

'Our supervision is in principle good but proving ineffective,' Gray told Accountancy Age. There are also issues with funds paid out by non-governmental organisations, where a large chunk of money did not meet the rules laid down for claiming it.

Last week, EC whistleblower and Gray's predecessor Marta Andreasen lost her case against her dismissal, a verdict she said she would appeal. Because so many issues had not been addressed, 'I believe I will be successful on appeal,' she said.

Andreasen was outspoken in her criticisms of the EU accounts this week: 'This year the court is trying to clarify that the management responsibility for the accounts and the underlying transactions remains with the European Commission.'