‘Unqualified’ success for EC accounts is not all it seems

EC chief accountant Brian Gray

EC chief accountant Brian Gray

For the first time in 14 years, the
Court of Auditors
’ broke with tradition and gave an ‘unqualified’ opinion on
European Commission accounts. The decision took critics by surprise, many had
sent out press releases slamming the forthcoming accounts.

But to say the EC got a clean bill of health is slightly misleading. While
the auditors did concede the accounts gave a ‘fair presentation’, they remain
unconvinced on the legality and regularity of the majority of EC spending.

The auditors singled out cohesion spending as the area most riddled with
errors. Of a €42m (£34m) budget, the Court estimated 11% of cohesion funds had
been wrongly distributed. The acceptable margin of error is 2%.

The EC is quick to point out there are no problems in spending on its own
administration, and blames member states for failing to properly oversee the 80%
of the budget that is distributed by countries independently of the EC.

But some argue this is simply passing the buck. One of the detractors, Open
Europe, says the EC needs to take responsibility for the failures and must
reform its ‘Byzantine spending schemes’. It lists projects such as a ‘certified
organic’ farm located in a waste dump, a brothel and a cinematography course
that ended up costing ?750,000 per student, as examples of waste.

But the EU insists it will be reclaiming funds wherever it finds money has
not been well spent and the UK alone is looking at a repayment bill of £190m.

‘The UK is good at making sure the right sorts of people receive funds but
not so good at making sure those people put in the right paperwork and respect
all the conditions,’ was how the EC’s chief accountant Brian Gray summed up the
UK’s administration of EU money.

Perhaps these demands for repayment, which couldn’t come at a worse time for
most European economies, will force member states to adopt a more rigorous
approach to doling out EU cash.

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