Brexit & EconomyPoliticsProfile: Brian Gray, chief accounting officer for the European Commission

Profile: Brian Gray, chief accounting officer for the European Commission

The Englishman responsible for signing off the EU Commission's accounts say you shouldn't believe everything you read about fraud in the papers

Brian Gray, chief accounting officer for the EU

For 12 years, the
European Union
has failed to get an entirely clean bill of health on its accounts. Early next
week, it will find out whether it has extended that run.

The news will bring headlines in the British press announcing another
terrible story from Brussels (and the real surprise will be if it isn’t another
qualification). Eurosceptics will splutter that the accounting problems are
among the most devastating indictments of the whole EU project itself. Private
sector accountants will turn pink and claim: ‘If that were me, I’d be out of a
job tomorrow’.

All of which must make Brian Gray’s job quite good fun. At the centre of the
European Union’s accounting is a mild-mannered Englishman, trained in a small
firm just behind Lincoln’s Inn and a graduate of Deloitte’s audit practice. Gray
is chief accounting officer for the Commission, the man who signs off the
accounts and who is responsible for defending them before angry MEPs.

A career EU official, Gray cut his teeth with Deloitte. He worked in Zambia
for the firm out of a passion for travel. When he got back he looked for a move
to Europe – he spoke French, so it made sense.

He had a ‘rootless’ upbringing, he says – born in India where his father was
an army officer and living in Geneva from the ages of 12 to 16. His wife is
Danish and he has clearly become very much the continental, despite his English

‘Life is very good here. Brussels has a million people, so it’s a very
liveable size. And the cuisine is very good.’

His English sensibilities also vary when it comes to discussing the EU.
Unlike many in the UK, it will surprise no-one that he is a staunch defender of
EU accounting.

The Court of Auditors objects every year to the levels of fraud and error in
payments for things like agriculture and the structural fund (which
redistributes cash from rich areas to poor areas), and Gray claims, as do many
in Brussels, that the problems are not as big as many make out.

‘The Court of Auditors will look at an academic research claim. for example,
and find there is no timesheet to prove it,’ says Gray. That counts as an error.

Or people will claim a computer cost and not depreciate it. The rules are
complicated and difficult to apply, he says. ‘I think there’s a very marginal
element of fraud.’

He says, by way of an attempt to clinch the argument, that in a recent review
of 800 transactions looked at by the Court of Auditors, it only referred four
possible fraud cases and all those were eventually dropped.

Gray’s defence is only partially convincing, and you’re tempted to suggest
that if people aren’t producing timesheets or measuring their fields correctly,
perhaps they should.

Teaching the old dogs

Part of Gray’s job is to try and tighten controls and educate. That can be
done by punishing member states that don’t comply, which gives rise to more
barmy stories.

Gray cites Greece as an example. ‘Greece hasn’t applied the accounting system
for agriculture since 1999. As a result, on an [estimated] 5% error rate the EU
recovers 5% of all Greece’s agricultural spending each year. The Greek
government prefers to live with this rather than work on the underlying

Gray seems content that the levels of error, though too high for the
auditors, are at least known error rates, and that forms his defence. It is an
intractable problem that bedevils institutions in the UK like the Department for
Work and Pensions and HM Revenue & Customs, in that governments giving out
money can never entirely know where it goes, but can only estimate the size of
the problem.

One initiative at the moment is to get the individual member states to take
more responsibility, to produce assurances themselves and to audit them
themselves. After all, most of the fraud and error takes place through the
member states doling out the money, not directly through the commission.

The initiative – not surprisingly – is being adopted in some places more than
it is in others. The UK is producing a statement, as is Holland and Denmark. But
others are not so keen. Will the other member states come on board and produce
the same statements? ‘It seems unlikely,’ says Gray. They may be made
responsible for spending at a lower level, he says.

Flying the flag

One of the ironies about the UK’s frustrations with the EU’s accounting,
however, is that the British profession has had a huge impact on the systems the
bodies use and Gray is the proof of that influence in many ways.

‘[British accountants] developed the Court of Auditors’ auditing manuals. The
court adopted those as its audit procedures. The British and the Dutch took the
initiative there,’ Gray says.

Not only that, but many other European public sector institutions then
adopted those standards. The EU’s accounting is, in a sense, another fine
British export, but one that perhaps we aren’t about to boast about.

Part of the problem for Gray is the constant noise about problems within the
commission. When Brussels tries to point the finger away and say that the member
states are the problem, he has to deal with allegations, starting with Marta
Andreasen and comprising fellow whistleblower Paul van Buitenen (now an MEP) and
UK MEP Ashley Mote, that the commission’s processes are not up to scratch.

Gray says he doesn’t really understand the concerns. ‘[Marta] was recruited
from outside. Within five months she had lost the confidence of her bosses and
moved out. I looked to see what she was complaining about. Generally what she
had found is written on by the Court of Auditors.’

So it was nothing new then? ‘There’s no smoke without fire. The financial IT
system was too large and there were issues,’ he says. ‘But we looked through the
logs and we couldn’t see any abuse.’

What about suggestions that she asked for a list of people allowed to sign
cheques, only to be told there wasn’t one? ‘We don’t have cheques,’ he says.
‘Everything is electronic.’

Ongoing concerns

Van Buitenen continues to be worried about how whistleblowers are treated,
and directs his attention to the anti-fraud office OLAF these days. Gray says
whistleblowers in the budgetary departments can call OLAF anonymously if they
want to and he is yet to be convinced there are many hiding in the woodwork.
‘Show me the evidence’ seems to be his view.

Mote is perhaps not so credible a figure as the other two, has been jailed
for his own £70,000 housing benefits fraud. Mote delivered a 25,000 word report
to the European Parliament earlier this year about problems he had found, a
report that Gray thinks was ‘rubbish.’ It was claiming, Gray says, that there
was a €100bn (£69.5bn) black hole in a department that only has a budget of
several million euros.

The problems of the Santer commission (which resigned en masse over fraud
issues) are in the past, he says. The reforms brought in thereafter have worked,
he thinks.

Whatever the problems in EU accounting (and there are certainly problems,
despite Gray’s assurances) it is important to get a sense of perspective and to
remember the difference between the private and the public sector.

‘Tesco loses money from shoplifiting and deals with it by keeping it to an
acceptable level. But if we lose a single euro it’s in The Sun as ”
Shock Horror”,’ he says with some justification. ‘The perception of risk is very
different. We take a much lower risk.’

Another peculiar and interesting fact about the EU’s processes is not how lax
they are, either, but how tight they are. Parliamentary officers moan that they
need to fill in five forms to get a bottle of water. Gray admits the rules are
often too strict. ‘I only order water if there are people coming from outside,’
he says.

Up close

Based in a huge office just behind the Berlaymont commission building in
Brussels, Gray is one of the most experienced public sector accountants you are
ever likely to meet.

He has worked for the EU since 1978, serving 13 years in the court of

He has been accounting officer since 2003, before which he served in the two
major offices of the EU. He was director of resources in the regional policy
arena, the bit that redistributes cash to the poorest parts of the EU. Before
that he was head of a unit within the agricultural division, the benefactor of
the EU’s farmers.

Critics might say that makes him an insider, who probably went native so long
ago he doesn’t know what life is like in the real world.That may be so, but his
experience will certainly serve him well in the future. He says that he hopes to
help with institute work when he retires and he is certain to be in demand given
his CV.

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