By Chris Jones - 17th January 2006
New proposals aimed at providing greater control over the way EU money is spent could stall due to a lack of support in national capitals, the European commission has warned.
Brussels is urging member states to play a more active role in ensuring that European money is properly allocated after criticism of the current system by the European Court of Auditors.
The ECA has failed to give a ‘positive statement of assurance’ on the EU accounts for the last eleven years, mainly because of a lack of transparency at the national level.
Commission President José Manuel Barroso has made no secret of his desire to obtain a positive statement of assurance from the ECA before the end of his tenure.
National governments distribute 80 per cent of the EU’s annual budget, mainly in the form of farm subsidies or ‘structural funds’ targeted at Europe’s poorest regions.
But it is the commission that is responsible for ensuring that the EU money is correctly spent.
The court of auditors, keen to exert its independence from the Brussels executive, has been reluctant to take part in the reform process, and Barroso and audit commissioner Siim Kallas have been forced to act largely alone.
But the ECA eventually gave into pressure late last year and issued a set of guidelines, setting out the changes it considered necessary in order for the commission to receive a positive statement.
Based on these suggestions, the commission has drawn up plans to improve the audit system, known grandiosely as the integrated internal control framework.
The action plan, approved by the ‘college’ of commissioners on Tuesday, consists of 16 key proposals.
These include a simplification of the exisiting legislation - making it easier for paying agencies to assess the elgibility of claims, for example - and greater cooperation between the member states, the commission and the ECA.
But a controversial proposal aimed at making individual finance ministers responsible for ‘guaranteeing’ that payments have been made correctly was rejected by governments in November.
Several countries, especially federal states such as Germany, were concerned that such a system would allow those responsible for distributing funds at local or regional levels to effectively “pass the buck”.
Instead, they want the bodies responsible for allocating the funds in each member state – backed by independent auditors – to guarantee that the money has been correctly spent.
Brian Gray, deputy head of the commission’s budget department, admitted that the
refusal of member states to take responsibility was a disappointment.
“We have introduced a similar system within the commission, with each department head effectively guaranteeing that funds are spent correctly.”
“It is a system that works well within the four walls of the commission and we believe it would work just as well in the member states,” he said on Monday.
“But the issue of who is responsible for assessing the management of spending in the member states is still up for debate.”
Even without the political commitment from member states to take responsibility for payments, Gray argues that the commission’s new proposal would make the system far easier to control.
“The key is to make sure that everyone speaks the same language, whether in the member states or in Brussels, and that everyone understands how and to whom payments can be made.”
“Each agency must ensure it has the correct procedures in place to verify that money is allocated properly, and then report back at the end of each year on whether that was the case,” he said.
“This should make it far easier for the court of auditors to have confidence in the way EU money is spent, and we are confident that it will move us much closer to obtaining a positive declaration of assurance.”
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