PracticeAuditOLAF poised for audit scrutiny

OLAF poised for audit scrutiny

Beleaguered European Union anti-fraud unit OLAF will come under further pressure this year, when it is audited by the EU's financial watchdog, the Court of Auditors.

Link: OLAF to report on rise in fraud cases

Juan Manuel Fabra Valles, president of the Court of Auditors, told the European Parliament that a probe of OLAF’s ‘efficiency and effectiveness’ would be a key priority this year.

The news follows proposals by European Commission president Romano Prodi to reform OLAF’s operations, following the Eurostat scandal that saw millions of euros lost in suspicious deals with outside contractors.

Under the proposals, OLAF would have to inform institutions when an investigation finds the possibility of wrongdoing, as well as recommend steps to prevent financial loss.

Piqued commission officials claimed they were not informed by OLAF of its investigation into Eurostat, and instead learned from the press that millions of euros had gone missing. An internal EU inquiry criticised a lack of control over Eurostat.

The whole affair was a major embarrassment for the commission, which had pledged a ‘zero-tolerance’ policy for financial wrongdoing when it assumed office, after the previous commission was forced to resign in a corruption scandal.

Fabra Valles said a light-touch approach was essential to ensuring a firm outcome. ‘We shall take every account of their concerns and shall respect each institution’s independence and observe the rules regarding the confidentiality of the audit, both of which are essential for ensuring our work is objective and professional,’ he said.

Romano Prodi promised an administrative shake-up to counter any future problems with financial impropriety. ‘There will be a new early warning system for collecting and crosschecking all information relating to allegations of fraud, irregularities and wrongdoing,’ he said at the end of last year.

OLAF has resisted change, instead calling for a period of institutional stability within the EU. A critical audit by the court would weaken its case against reform.

However, it may be saved from public criticism as Fabra Valles told MEPs that ‘the findings of its audits may not necessarily be published this year’, and decisions would be made on a case-by-case basis.

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