The EC’s chief financial officer – a Euro star?

It may not have come as a surprise last week, when the European Court of
Auditors qualified the accounts of the European Union for the 11th year running.
It did, however, emphasise the huge challenge of administering a £70bn annual
budget across 25 countries, a responsibility that falls to Brian Gray, the
European Commission’s chief financial officer.

What has changed from previous years, and signals some progress, was that the
court attacked EU member states instead of pointing the finger of blame directly
at Brussels. The nations of the EU conduct around 80% of its spending.

This shift away from the EC must be in part due to the financial reforms put
in place under the stewardship of Gray, following a raft of accusations that
budgetary fraud was commonplace. Indeed, the auditors acknowledged the EC’s
efforts to enact these reforms. But there is still work to do, as the ECA says
large parts of the budget are open to unacceptable levels of error and risk of

Gray should be well aware of how tough it is to get the ECA to give the
accounts a clean bill of health, having worked there himself. His 13 years at
the court took in the examination of development aid and food aid, among others,
before he looked into the European Agriculture Guidance and Guarantee Fund. He
left before the EC’s poor run of form on its accounts began.

Gray joined the commission in 1992, taking on responsibility for the
clearance of the accounts of EAGGF (something his previous experience would have
stood him in good stead for), as well as examining the implementation in member
states of the common agricultural policy.

In 1999, Gray became director of resources in regional policy, responsible
for budgetary matters, legal affairs and controls over structural funds in the
member states, among other things.

The ICAEW fellow has also worked as an audit manager in both London and
Zambia with Deloitte.

But his toughest challenge will take place on the other side of the audit
fence. Gray has been closely involved in the modernisation of the commission’s
accounting systems since he took the CFO’s job in 2003, which has included a
move to modern public sector standards based on accrual accounting, and an
overhaul of the IT systems that support it.

Progress has been made, but there is work to do at the EC and greater reform
required to ensure the spending of EU money by member states is more transparent
and accountable.

It may be too early to expect the ECA to pass the EU’s accounts next year,
but calls for clean finances will continue to increase in volume until a
satisfactory result is achieved. Gray will surely not consider his time as the
EU’s FD successful until the court approves the accounts, at least once.

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