States urged to take active role in EU fraud battle

Member states of the European Union are coming under increasing pressure to
take their responsibility for the fraud that riddles many EU spending
programmes.

While presidents and prime ministers failed in Brussels to agree a budget for
the years 2007 to 2013, the European Commission released two papers calling on
them to tighten their own controls on EU spending.

For whatever the size of the budget that is finally approved, ‘four out of
every five euros in the budget are in reality handled by the member states under
shared management’, said one of the reports, which noted that, despite this, the
‘sole responsibility… for implementing the budget’ lies with the EC.

The report added that, as a result, ‘it is essential that member states take
an active part’ in boosting accounting and auditing controls, it said. This is
needed if the EU has a chance of answering the stinging criticism from its Court
of Auditors watchdog, which has for 10 years refused to issue a ‘general
statement of assurance’ for the general EU budget.

One report said: ‘The current situation cannot be left as it is. Taxpayers
should have reasonable assurance that the funds of the EU are managed in a legal
and regular manner’.

And while Brussels lists a number of measures EC officials must take, it is
clear it wants national governments to take action against fraud usually blamed
on slack controls within EU institutions.

One paper highlights a Court of Auditors’ criticism that where programmes are
managed by both the EC and governments, ‘the majority of the costs of
undertaking controls are borne by the member/beneficiary states whereas the
benefit accrues to the EU budget. Thus, [governments] have little incentive to
devote sufficient resources to controlling EU funds’.

Among the comprehensive advice offered is that member states ‘demonstrate
controls in place… and limit the risk of error’ in the spending of
multi-million euro structural funds distributed to poor areas of the EU.