EU Court of Auditors challenged by Lords and Kallas

The European Court of Auditors’ 12th annual refusal to give the European Union’s (EU) accounts a complete positive assurance has sparked criticism this year, with both EU anti-fraud Commissioner Siim Kallas and – surprisingly – the UK House of Lords defending Brussels’ book-keeping. The Court said much EU spending in 2005 had not involved proper invoices, correctly paid bills and the selection of best value suppliers. Indeed, using random sampling methods, it found errors, from delayed payments and incomplete documentation to outright fraud in transactions affecting 66% of the €115 billion EU budget. Siim Kallas, EU anti-fraud Commissioner headed off the attacks, saying that the Commission recovered more than €2.17 billion in wrongly paid money last year, and that it should be given credit for its diligence. “Some of the Court’s criticism [was] unduly severe,” he said, noting member states actually spent 76% of EU money. His comments have been echoed by a House of Lords European Union select committee report, which called on the Court of Auditors to in future make clear that it accepts the reliability of EU accounts (which it always has), and that its concerns are focused on the legality and regularity of the transactions they report, many managed by national governments. It has also called on the watchdog to give separate figures for outright fraud and mishandled spending, such as choosing the wrong contractor, to avoid suggesting that EU institutions are rotten. It suggested further that the Court should stop relying on small samples of transactions to generate assumptions about the reliability of EU accounts and spending.