EU budget not honestly audited since 1994

[TonyGosling]

A waste of money? EU spends £5 billion in wrong areas by mistake
Etan Smallman Tuesday 10 Dec 2013 6:03 am
http://metro.co.uk/2013/12/10/a-waste-o ... e-4224025/

A waste of money? EU spends £5 billion in wrong areas by mistake
Are the EU working as hard as they can for our money? (Picture: File)
It didn’t exactly come as a surprise. Last month, the European Union was told by its own spending watchdog that its accounts could not be given a clean bill of health – for the 19th year in a row.

In fact, it has never received a full seal of approval (it has only had auditors for 19 years).

Some 4.8 per cent of the EU budget in 2012 was spent on projects that should never have received the money – a total of about £5.5bn, including up to £800m from British taxpayers. This was an increase in the ‘error rate’ from 3.9 per cent the previous year, and it was the third consecutive year that the figure had risen.

The European Court of Auditors (ECA) said ‘all operational spending areas were affected by material error in 2012′, adding: ‘Typical errors include payments for beneficiaries or projects that were ineligible or for purchases of services, goods or investments without proper application of public purchasing rules.’

It emerged as a separate report concluded that some of the £418m of EU funds given to help rebuild the Italian city of L’Aquila after an earthquake in 2009 could have ended up in the hands of the mafia.

Then there are the ECA’s findings that £840m given to Egypt between 2007 and 2012 to support human rights programmes were almost impossible to trace as Egypt published no figures on where the money was spent. So what is going wrong?

Philip Bradbourn MEP, the Conservative spokesman on EU budgetary control, said that a similar amount of ‘misappropriation and misspending’ in a commercial business would result in widespread sackings.

He told Metro that just because the EU is a gargantuan organisation doesn’t mean we should expect mismanagement of this kind, and added that the solution is a ‘dedicated, full-time budgetary control commissioner to tackle misspending and fraud’, a proposal which has received parliamentary backing for next year.

Fellow Tory MEP Marta Andreasen, who was sacked as chief accountant of the European Commission back in 2004 after claiming the EU’s budget was wide open to fraud and abuse, said: ‘Sadly, I am no longer shocked. It is not a case of a few rotten apples in the barrel – the barrel itself is the problem. There are no proper checks and balances in place.

‘This is a public institution. You and I are giving our tax money to it. The least we can expect is some basic responsibility and, above all, accountability. These are huge figures we are talking about.’

Ms Andreasen said some of the ‘misspending’ should be plainly labelled as fraud, adding that the ECA had found so-called farms that were subsidised in Spain, Austria and Portugal that were covered with rocks and bushes.

She asked: ‘If this is not a deliberate intention to deceive then what is?’

However, Professor Iain Begg, from the European Institute at the London School of Economics, said the accounting processes may not be too lax, but too tight.

‘The Court of Auditors’ report is an annual ritual in which EU spending is routinely found to have shortcomings,’ he said. ‘One of the reasons is that the standard of accountability is very tough, much more so than in individual countries, including the UK.

‘This, rather than the “culture of the EU”, is the principal explanation. In practice, much EU spending is so tightly controlled that it creates onerous burdens for recipients. Most of the problems tend to be the fault of the member states, which implement EU policies, rather than Brussels as such. The logical solution is to demand that those same member states are much more stringent in their procedures.

‘The UK is not exempt, even if the problems are typically worse in countries like Italy where weak or corrupt public administration compounds the problem.’

Aidas Palubinskas, from the European Court of Auditors, said it is independent and described the error rate as ‘relatively stable from year to year’. He said the errors highlighted in its report were ‘examples of inefficiency, but not necessarily of waste’.

Instead, he chose to highlight flaws in British spending, pointing out that the National Audit Office had found that the Department for Work and Pensions had made overpayments due to fraud and error of £3.2bn in 2011/2012.

The ECA’s president, Vítor Manuel da Silva Caldeira, said a new financial framework due to begin in 2014 should create a ‘new management culture based on performance‘.

But Ms Andreasen is pessimistic about the likelihood of reform. ‘It pains me to say it, but on the issue of the EU budget, I think there is little to no will for change,’ she said. ‘It would require such root-and-branch reform that it would be opposed at every juncture. Resistance to change goes right to the top of the EU tree.’

MEPs also raised concerns about the accountability of the raft of new financial instruments being formulated by the commission and other institutions in response to the financial crisis, particularly the new EU bail-out fund, the European Stability Mechanism, which comes into force in July.
The current fund, the European Financial Stability Facility, was set up on an inter-governmental basis domiciled in Luxembourg with no parliamentary oversight, and MEPs are keen to ensure that the ESM treaty includes provisions for external audits.

Call to scrap yearly statement on EU budget

01.06.12 @ 09:25
Related › Euro bail-out funds lack oversight, auditors say › EU agencies rebuked over spending › Britain, Sweden and Netherlands refuse to sign off EU accounts
By Benjamin Fox
http://euobserver.com/18/116450

BRUSSELS - The EU should scrap the annual Declaration of Assurance (DAS) on the EU's accounts prepared by the Court of Auditors, (ECA) says its former president Jan Karlsson.

Karlsson was speaking on Wednesday (30 May) during a public hearing organised by the parliament's budgetary control committee, responsible for overseeing the work of the Luxembourg-based Court of Auditors.

President of the court between 1999 and 2001, Karlsson claimed that the exercise, which has seen the audits for the last 17 years fail to give the EU's accounts a clean bill of health, is "misunderstood" by the public who "perceived the exercise as an investigation into corruption in the European institutions."

Jules Muis, a former chief internal auditor of the European Commission, agreed the annual exercise should be scrapped in favour of an audit every five years.

"The time has come for parliament to initiate an EU inter-institutional debate to reconsider the rationale of the DAS and at least to take the annual mandatory DAS out of the ECA's mandates; possibly to replace it with a once every five years requirement," he told MEPs.

Muis added that the mandate of the court should be overhauled, calling for it to move from being "an almost exclusive auditing and accounting agency into a broader accountability agency" acting more as an independent accountability body.

The European Commission says that most irregularities in EU spending are committed at national level. Around 80 percent of EU budget spending is distributed by national governments.

Currently only four member states use a "national management declaration" which certifies that the accounts have been accurately verified, with governments blocking attempts to make it mandatory.

Earlier this month MEPs signed off the accounts of the European Commission and most EU agencies for 2010 although it refused to approve accounts prepared by the Council, the member states' secretariat.

MEPs also raised concerns about the accountability of the raft of new financial instruments being formulated by the commission and other institutions in response to the financial crisis, particularly the new EU bail-out fund, the European Stability Mechanism, which comes into force in July.

The current fund, the European Financial Stability Facility, was set up on an inter-governmental basis domiciled in Luxembourg with no parliamentary oversight, and MEPs are keen to ensure that the ESM treaty includes provisions for external audits.

Vitor Caldeira, Court of Auditors' chief, agreed that "adequate management reporting on risks and performance of such financial instruments will be key to maintaining transparency and accountability."

MEPs are also drawing up a report on the future role of the Court and its appointment procedures. Muis and Karlsson argue that ECA members should be selected on professional grounds, abolishing the one-country one-member requirement.

However, reforms to the court's governance structure require the unanimous support of the 27 EU governments.

[TonyGosling]

Her telephone was bugged. She was followed outside the building. In desperation she sought an interview with Neil Kinnock, the Commission Vice-President charged with fighting fraud, but she describes how he treated her with "bullying" contempt. At Lord Kinnock's instigation, she was first suspended and consigned to a tiny office without a telephone, then dismissed, finally to face disciplinary proceedings,
Thus her life descended into a five-year nightmare, as she faced one tribunal or court after another, all finding her wholly to blame. At one point she had to appear before all the Commissioners, like a naughty child, only one appearing to listen to her while Kinnock made grimacing signs to indicate that she was mad.
Her book reads like a chilling cross between two Kafka novels, The Trial and The Castle. Yet this is the organisation to which our politicians have surrendered much of the power to decide how Britain is governed, and to which British taxpayers now hand over some £13 billion every year with no control over how it is spent.


A look in the EU's unbalanced books
The EU's former chief accountant has laid bare endemic corruption, but our own politicians are too emasculated to care, says Christopher Booker.
http://www.telegraph.co.uk/comment/colu ... books.html

By Christopher Booker 5:58PM BST 09 May 2009CommentsComment
Evidence mounts on all sides as to how Britain's standing in the world is in sad decline. After 10 years as the world's fourth largest economy, we have now slipped to sixth place behind China and France. In Wednesday's Daily Telegraph, under the heading "The UK will be missed on the world stage", Irwin Stelzer wrote about the failure of our military missions to Iraq and Afghanistan, and lamented Britain's retreat from an effective role alongside our US partners. On the same day, Max Hastings reported a similar story from America itself, where he was shocked to find how far we have lost the respect earned in the days of Mrs Thatcher.
Another, perhaps less obvious, reason why Britain has lost respect is reflected in a shocking new book, published tomorrow, entitled Brussels Laid Bare, by the EU's sacked former chief accountant, Marta Andreasen. The outline of her story has long been familiar. In 2002, as the first qualified accountant to be given the job, she was appointed to sort out the EU's accounts, which for six years running had not been cleared by the EU's Court of Auditors due to a maze of "irregularities".
In 1999 the entire European Commission had resigned when, thanks not least to a Commission whistleblower, Paul van Buitinen, every kind of fraud and corruption had come to light. Miss Andreasen – who was born to a Danish father, lived in Spain and had worked for various multi-national organisations – began her new job as something of a "European" idealist, hoping she could help to put things right.
As soon as she arrived, she was invited to meet the Court of Auditors. They welcomed her and expressed the hope that she could impose order on chaos, but warned that she would meet stiff opposition, not least from the powerful Frenchman who for years had been in charge of the EU budget. (Although her book changes officials' names for legal reasons, he is identifiable without much difficulty as Jean-Paul Mingassen.)
As soon as Miss Andreasen began looking at the EU's accounting system, she saw that it was a shambles. Between the 2000 and 2001 accounts, €200 million had gone missing without explanation. She was told these were "loans" which had been â written off'. Senior officials were authorised to hand out huge sums without any proper records being kept. Accounts were kept on spreadsheets which could be accessed and changed without leaving any trace of who made the changes.
Related Articles
Climate change: The elements conspire against the warmists 09 May 2009
The system was open to fraud in every direction. Almost immediately, however, Miss Andreasen found herself being pressured to sign off the 2001 accounts which, as she said, would be a criminal offence, since this was the responsibility of her predecessor and she had been given none of the information needed to know whether or not they were correct.
It soon became obvious that her attempts to introduce changes were being blocked at every turn. The German budget commissioner, although initially sympathetic, was hopelessly out of her depth. Thus began a horror story only too familiar from the experience of previous whistleblowers, from Van Buitinen to Bernard Connolly, author of The Rotten Heart of Europe – except that Miss Andreasen insists she was not a "whistleblower" but merely trying to do her job.
Her telephone was bugged. She was followed outside the building. In desperation she sought an interview with Neil Kinnock, the Commission Vice-President charged with fighting fraud, but she describes how he treated her with "bullying" contempt. At Lord Kinnock's instigation, she was first suspended and consigned to a tiny office without a telephone, then dismissed, finally to face disciplinary proceedings,
Thus her life descended into a five-year nightmare, as she faced one tribunal or court after another, all finding her wholly to blame. At one point she had to appear before all the Commissioners, like a naughty child, only one appearing to listen to her while Kinnock made grimacing signs to indicate that she was mad.
Her book reads like a chilling cross between two Kafka novels, The Trial and The Castle. Yet this is the organisation to which our politicians have surrendered much of the power to decide how Britain is governed, and to which British taxpayers now hand over some £13 billion every year with no control over how it is spent.
On June 4, a minority of us will cast our votes in elections to the European Parliament. By a surreal twist, the Danish-Spanish-Argentinian Miss Andreasen will be standing in the East "Euro-region" as lead candidate for the UK Independence Party. But she knows that whoever is elected will make no difference to the nature of a "mega-state" which, as she puts it, is irredeemably corrupt and unreformable. The tragedy is that our own politicians are so emasculated, reduced to expenses-fiddling zombies by this strange form of government we now live under, that most neither know nor care.
Leaflets can be a real swine to get right
I'm sure we've all been enjoying the Government leaflet on swine flu, distributed to all of us at great expense to tell us how to sneeze and how to prepare for the coming pandemic by recruiting a network of "flu friends". These are, apparently, the neighbours who will be willing to do our shopping when the killer virus confines us to our homes.
Some of us may recall the last time a government spent millions of pounds on warning every household of the approach of such a deadly health threat, way back in February 1987. Our West Country postman, having just driven a mile up a snow-covered farm track in the Mendips, solely to deliver a copy of Mrs Edwina Currie's famous "Don't Die Of Ignorance" leaflet on Aids, wryly observed: "I'm not sure it was wholly necessary for the Government to warn a married couple in their 80s of the dangers of unprotected anal sex."
Twenty two years later, HIV/Aids has so far in Britain killed an average of less than 1,000 people a year. In NHS hospitals, MRSA and C difficile alone are currently killing more than 10 times that number of patients each year. Perhaps our Government would have done better to send a leaflet to itself.