Luxembourg, 13/04/2000 (Agence Europe) - The General Affairs Council this week discussed, on request from Germany and Spain, the financial difficulties of the Institute for EU/Latin American relations (Irela), based in Madrid, financed by the European Commission and lead by a German.
Following punctual audits and reports by the Court of Auditors bringing into question the financial management of Irela, the European Commission decided to suspend the subsidy of around EUR 2 million per year. A global audit report should be finished next September or October and handed to the European Parliament's Committee on Control and the Court of Auditors. During the Council, six Member States intervened to underline the quality of the work provided by Irela and to encourage the Commission to find a practical solution while awaiting the final report and avoid the closure of the institute. Commissioner Chris Patten indicated that the Commission was ready to advance an aid to Irela to resolve its treasury problems by the autumn.
The audits did not note any fraud until now, but the reoccurring proof of bad management or irregularities, in the accounting for holidays for example, indicates the Commission. The Court of Auditors notably criticised three years ago the management of human rights projects in Central America by Irela. "The problem is that often it concerns thousands of human rights micro projects, lead by small NGOs if possible with discretion: these NGOs are generally incapable of maintaining accounting to back their accounts," notes one observer. Basically, the problem stems from the fact that the Commission has created too many institutions that wholly depend on these subsidies including for their working budget, noted a European observer adding that a certain amount of sloppiness sometimes leads the choice of spending eligible for subsidies.