PracticeAuditProfile: Eduardo Ruiz García, secretary general of the European Court of Auditors

Profile: Eduardo Ruiz García, secretary general of the European Court of Auditors

EU members refer to its financial watchdog in glowing terms – but the European court of auditors’ new secretary general wants them to step up their own game

There’s not much on the job training to be done for the new secretary general
of the European Union (EU) financial watchdog, the European Court of Auditors.
When Eduardo Ruiz García took up his new post on 16 March he had already served
as a court official for 20 years and now, at 48, he has, in effect, dedicated
his professional life to the well-being and improvement of the institution.

Its two pronged strategy for the four years up to 2012 are to maximise the
overall impact of its audits and improve efficiency by making better use of the
court’s resources.

This comes off the back of the repeated failure over the years to sign off
the EU’s annual accounts with a statement of assurance (although this did happen
last year of course) and the routine uproar this has caused in the media.

Improvement and, almost as important, the perception of improvement are
García’s aims. He wants the court to be the supreme example of an international
organisation audit body ­ not only for its own sake but to be able to criticise
failings in other EU institutions from a position of strength.

Speaking in the court’s Brussels offices, he says it is vital for his
institution to show more progress by 2010 through performance and financial
audits. He said the ambition for the court is to deliver 12 to 15 special
reports each year and to assess their usefulness with other arms of the EU,
notably the relevant European Parliament committees, and also get views on their
quality from independent sources.

Among other things this, García says, will involve writing a report for the
new, incoming commission ­ which could assume office this autumn ­ of the key
risk factors the 2009 budget contains.

One gains the impression that the court will become even more rigorously
introspective about its work and methods under this secretary general’s

There is a recruitment drive underway at the moment for 80 new auditors to
augment the current 500 auditing staff. These newcomers’ jobs will be to
scrutinise performance. García notes that the court is developing a list of
subjects that merit performance auditing.

Recent reports have included milk quotas, the EU Solidarity Fund for
emergency disaster assistance, resources used for health services in Africa and
the way EU cash is spent in the Mediterranean area ­ always fruitful lines of
enquiry. All these were topics selected independently by the court. The criteria
were risk assessment, the volume of funds involved, the public interest and the
last time the court looked at the subject.

Health in Africa is a subject close to García, who made a specialism of
development economics during his post-graduate auditing studies at Valencia
University. He sought an outlet for this enthusiasm, but he started work in the
offices of a labour lawyer followed by five years in public administration in

By this stage he became a keen supporter of Spain’s then nascent EU
membership. After a competitive exam he joined the European Commission as a
junior auditor watching over its internal controls. A job with the Court of
Auditors followed.

And Luxembourg ­ the seat of the court? ‘Oh, I’m a fanatic for that country,’
he replies. ‘I like it very much. Living there is so comfortable and has nice

He keeps fit alright. García has a compact physical presence so it is not
surprising when he stresses his membership of the Europa Football Club which is
made up of EU employees and is good enough to play in the Luxembourg
Championship. He has two musically inclined daughters and makes his own
contribution to family playing by wielding a guitar.

But García is tentative in mentioning too much personal detail. Not
necessarily shy ­ certainly modest. He says he has no wish for much of a
profile, stressing it is the institution which matters and, in any case, he is
the secretary general, not the president, who ultimately has the final say on
court decisions.

Nonetheless he feels the need, like many other Eurocrats, for his
organisation to be closer to voters and to be much better recognised by them. He
says the court has made major efforts to improve its communications in the past
two years, for instance, sharpening up governmental contact and liaison,
introducing a new internet site and improving information material.

Better contacts with universities will also be included in the policy mix.

García is keen to remove the mystique which has surrounded the court in the
eyes of the public and get the layperson to understand better the public
interest of its activities.

He underlined the court’s most recent unqualified approval of the EU’s 2007
accounts made last November, although the court did still identify the need for
improvements in supervisory and control systems and regulatory simplification.

‘The key point is improvement in member state auditing. Some are better than
others, of course, but there are still problems right across the EU with
underlying transactions in the distribution of funds. We find errors in all
member countries,’ García says.

The most common weaknesses, he adds, are the quality of accounts management
and finance controls in some member states which can mean some EU funds are
distributed without a proper basis or the right paperwork.

The quality of management needs to be improved, he says, especially in the
money spent on EU-funded regional projects where sometimes cash is spent on the
wrong things.

He stresses that, under the European Union treaties, the Court of Auditors
has very substantial powers and can call up any piece of evidence from members
which it deems relevant. Its audits are in accordance with practice of the
International Federation of Accountants and the International Organisation of
Supreme Audit Institutions.

García referred to the court’s 2007 request for a peer review by the national
audit institutions of Austria, Canada, Norway and Portugal from which its
reputation emerged gleaming, not least because other EU institutions interviewed
had high confidence in the court’s reports, considering them to be fair, factual
and objective.

Although García smilingly claims there is no such thing as a perfect system,
in his objective to be the best auditing body in the world, there is no respite.
This year will see the appointment of an internal think-tank to see how the
court’s work in the area of financial audits can be further improved.

What is the European Court of Auditors?

The court was established to carry out the audit of EU finances and, as
external auditor, it intends to contribute towards the EU’s financial
management. It assesses the collection and spending of EU funds and examines
whether finances have been properly recorded and disclosed, publishing reports
on its findings.

It started operating as auditor from 1977, after the case for its existence
had been strongly argued by then president of the European Parliament’s
Budgetary Control Committee Heinrich Aigner.

Members of the Court of Auditors are appointed for a six-year term. A
president is elected for a three-year term, who can be re-elected.

Since the Treaty of Maastricht, the court has been recognised as one of the
five institutions of the European Communities. The others are the European
Parliament, the Council of the European Union, the European Commission and the
Court of Justice of the European Communities.

14 years of hurt

The EC’s accounts were qualified by the European Court of Auditors for a
grand total of 14 years on the trot.

Reasons given included questioning the ‘legality and regularity of payments
in most areas of the budget’ in one instance, while its cash accounting system
had also been criticised in the past.

Famously, former EC chief accountant Marta Andreasen claimed she was
suspended and subsequently sacked from her role for whistleblowing concerns over
the EC’s numbers.

Things have turned around though, to an extent.

The court described its 2007 cash flows as a ‘fair representation’ of its
financial position, but criticised unacceptable spending errors in all but two
of the policy areas covered by its v114bn (£93bn) budget.

Current EC chief accountant Brian Gray said at the time that it was unlikely
that the auditors would ever sign off against the EC’s underlying transaction.
Gray said the 2% error rate allowed by auditors was restrictive.

Additional words by Kevin Reed

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