NAO warns of euro fraud risk

With several central European countries vying to join the Union, the National Audit Office has told Whitehall financial management should have been given ‘appropriate priority’ during negotiations with other bodies dealing with the enlargement process.

The warning came as the NAO published its verdict on the European Court of Auditors’ report on the union’s finances, which were qualified for the seventh year in succession.

While foreign secretary Jack Straw met with his German counterpart Joschka Fischer to discuss how European governments could restore public faith in the Union, the NAO demanded evidence that the European Commission was winning its fight against fraud.

Member states last year reported £700m of suspected fraud, up from £400m the previous year, but there were wide differences between the countries.

Edward Leigh MP, chairman of the influential public accounts committee, questioned the figures, saying: ‘The UK accounted for a greater part of this than any other country but we really have to question how credible the figures are when some member states report no cases of fraud or irregularity at all in certain major areas.’

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