PracticeAuditECOFIN agrees roadmap to good accounting

ECOFIN agrees roadmap to good accounting

European Finance Ministers agree plan to improve the EU's controls ahead of an expected 11th successive qualification of the EU's accounts next week

European finance ministers have drawn up a ‘roadmap’ to getting the EU’s
£70bn budget signed off without qualification.

Ministers are concerned that the European court of Auditors has failed to
give the EU a clean bill of health for 10 years, with an 11th successive
qualification expected next week.

The ‘roadmap’ towards a positive Statement of Assurance was agreed at a
meeting of the Economic and Financial Affairs Council chaired by chancellor
Gordon Brown as the Commission braced itself for the next qualification from the
court.

A twin-track approach involves a crackdown on member states’ systems for
accounting for funds allocated from Brussels, which amount to 80% of Comission
expenditure. Each will be required to carry out gap assessment and review their
current accounting procedures.

The Commission believes its own procedures covering 20% of the budget are
transparent enough to satisfy the court.

And the court will be asked to play a greater role explaining the reason for
qualifications without prejudice to future findings, so that it will be easier
for the Commission to meet the court’s concerns over errors and inconsistencies.

In particular, this will involve ending practices thattreat a corrected
overpayment to a farmer involving a few 1000 euros as as big a fault in the
system as a €100m financial fraud.

The council also agreed progress towards a one-stop scheme for VAT designed
to minimise compliance costs for businesses, but did not agree reduced-rate
proposals introduced by the previous Luxembourg presidency.

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