Europe - States get fraud blame

Leading accountants and whistleblowers came to the defence of the EC this week, accusing successive UK governments of ignoring widespread fraud within the European grants system.

As the EC prepares to launch a new independent fraud unit, some accountants allege that the bulk of the missing money is being lost by member states, not by the EC.

Julian Paleson, head of the English ICA’s EU unit, said: ‘There is no doubt that a very large amount of the mismanagement of European funds is happening outside the commission.’

Two separate accountants have also stepped forward, saying their attempts to help the government tackle fraud had been ignored by ministers and civil servants.

Institute council member Douglas Llambias offered to create a specialist panel of accountants to combat fraud ten years ago, approaching the then prime minister, Margaret Thatcher and agriculture minister John McGregor, but received no firm response.

CIMA member Eddie Cairns – who was sacked for blowing the whistle on perceived accounting irregularities in a #200,000 European grant to Enterprise Ayrshire – said he had written again to the Scottish Office calling on it to do more to combat fraud.

He alleges the grant was deposited in the bank, but not actually put into the accounts until the day he was fired.

‘We want to raise the level of debate, and believe governments should legislate in order to offer protection. But it is a very complex issue,’ said International Federation of Accountants president Frank Harding.