Strasbourg, 15/11/2000 (Agence Europe) - Jan O. Karlsson, President of the European Court of Auditors, who presented the annual report on the 1999 budgetary year to the European Parliament on Wednesday, recognised the European Commission's commitment to set in place a modern and robust structure of management and control . He added that the Commission, which has given rise to "high expectations", must "put into practice its good intentions". "We will also need the cooperation of the Member States" which are responsible for the daily management of the large part of Community funds, affirmed Mr Karlsson. Budgets Commissioner Michaele Schreyer, who also stressed the responsibility of Member States (they manage 80% of the Union budget, she noted), assured that the Commission will not hide behind the States and will fully assume its "political responsibility" for execution of the budget. The Court of Auditors "is putting some wind in the sails of reform" in the Commission, which is on the right track, but which has still a long way to go, said Ms Schreyer.
In his presentation, Mr Karlsson admitted it is difficult to draw general conclusions on budget implementation (several MEPs criticised the lack of detail in the Court's report, and called for more figures), but pointed out that the audit of payments in 1999 has "revealed once again an unacceptable incidence of error" which mainly occurred in the areas of the Community budget managed by the authorities of Member States. They mainly comprise "non-compliance with eligibility rules, overclaims, insufficient justification and calculation errors". For 1999, noted Mr Karlsson, "the Court did not obtain the necessary evidence from its audit activities to ensure that the underlying transactions were legal and regular, except for own resources, the commitments and administrative expenditure". On the other hand, the Court issues a positive statement of assurance on the sixth, seventh and eighth European Development Fund. Mr Karlsson specified that the high incident of errors noted "cannot and must not be seen as an indication of the level of fraud affecting the Community budget" as "most of the payment errors found by the Court are due to problems of inadequate financial management and control and it is only in a small proportion of the errors found that further investigation by OLAF or the Member States' authorities is justified".
The president of the Court also welcomed the reform effort of the European Commission, and above all noted its intention to increase the responsibility of authorising officers for the commitments and payments, to place greater emphasis on the assessment of results and performance, and improve the management of external aid programmes. However, for the most part, "reform is still only on paper" and its realisation, notes Mr Karlsson, will require "a genuine change" in the Commission's management culture, a process that will certainly take time. He remarked that the report for 1999 "shows how difficult it is for the Commission to implement the needed changes which have been agreed upon". In some areas, the Commission has taken measures aimed at remedying the specific inadequacies noted by the Court (aid to the use of skimmed milk and skimmed powder milk, aid to South Africa for example), but in others, there corrective action has been slow. Mr Karlsson specified: - the level of milk quotas has been raised, causing an increase in surpluses; - the Court has carried out, for the Regional Fund, further action for 52 cases where, it states, it was necessary to operate financial correction, but the correcting measures taken by the Commission are only satisfactory in 14 cases: - in the field of social dialogue, the Commission has not undertaken all the actions it had undertaken to carry out; - the Court made a new audit of nine contracts with the Directorate General for Transport and Energy and eight contracts with the Directorate for Research, but the Commission only followed up three of these contracts, and is still working on six others; - the Court had pointed out in its annual report 1996 the failings in the management of a Fund for export promotion for Nicaragua and Honduras, and the Council had then called on the Commission to recover the unduly credited amounts by the regional bank, but at the end of 1999 the setting in place of a new organisation by the Commission had still not been completed. These examples, remarked Mr Karlsson, show that the Commission has been slow in taking corrective measures and that it has particular difficulties in recovering undue payments. For this reason the Court foresees in its 2001 programme the realisation of an overall audit on Commission recovery procedures, in all budgetary fields.
EUROPE will return tomorrow to the remarks made by the Court on the different categories of expenditure (agricultural, structural, external aid, etc.).
Several MEPs call for figures on fraud, refused by Mr Karlsson
In his plenary intervention, Ms Schreyer recalled that "financial corrections" are made under CAP for around EUR 600 annually. She also stressed the determination shown by the Commission in the fight against fraud, saying that its action against the main American tobacco producers shows it has plenty of pluck. She welcomed the Court's intention to draft more special reports which, she says, may indeed be of great value.
During the debate, the Chair of the Committee on Budgetary Control, Ms Theato (EPP, Germany) recognised the reform efforts made by the European Commission, but also noted that it has not yet "put its ledgers in order" for the accounting period in question, for which she has been directly responsible since September last year. The Parliament, she says, is in a very difficult situation, since it had announced in January that it would not accept the clearance of 1999 accounts in which errors occurred. Without account clearance, there can be no discharge. "We cannot continue to put off discharge for ever", exclaimed Dutch Liberal Mr Mulder, who would have liked more explicit figures. German Green member Ms Rühle, on the other hand, asked why the German member of the Court of Auditors (and its former president), Mr Friedmann, had put these figures into circulation - figures which many MEPs had called for. Mr Karlsson, however, stuck firmly to his position of no figures on fraud. Danish Social Democrat Mr Blak felt that the annual report of the Court of Auditors should become more readable and more precise and contain "two or three recommendations per chapter". Furthermore, he was highly critical of Member States. Names should also be given, said Belgian Green member Mr Staes, who asked Mr Karlsson whether it was true that certain of his colleagues speak of errors totalling 8 billion. British Labourite Ms Morgan also called for a "list of sinners", stating that the Court is not there to protect the Member States. Mr Karlsson replied that the report gives the countries or the regions (for example, Brittany) when this is relevant for discharge, and that he had himself, in a report on development aid, cited the name of two companies, but the matter had landed before the Court of Justice. The Court of Auditors does not wish to become "a political instrument" but wants to give objective help so that political responsibilities are assumed, Mr Karlsson told MEPs. Mr Pomes-Ruiz (EPP, Spain) criticised the absence of the Council in this debate, and Parliament President Ms Fontaine said she felt he was quite right.
Ms Schreyer and Mr Karlsson answer questions from press
Speaking at a press conference, Mr Karlsson repeated that the Court had not wished to give an overall figure to avoid over-simplifying the debate. "If we want to come to such a figure, then we would have to undertake an extremely expensive task, and I am not sure it would give any real added value. In our interpretation of the facts, we should also take into account the circumstances in which the current Commission was set in place", he remarked. Furthermore, while stressing the responsibilities of Member States, he affirmed that the Commission also has the responsibility to verify whether the latter are behaving correctly. Commission and Member States must not "point the finger" at the others but assume their joint responsibility, he said, hoping that the Member States see "European money as their own". Mr Karlsson also encouraged the Member States to work with more speed in clearing the accounts for agricultural spending, and to set in place, with the Commission, similar procedures for Structural Funds, in order to be able to better verify what each country is doing. Mr Karlsson recognised a certain lack of cooperation between the EU and the "UN family": the agreement concluded with the United Nations by the European Commission does not take our recommendations into account and we hope the Commission will "try again", he said.
Mrs Schreyer also spoke to the press, saying that the "message" from the Court encouraged her to make the Commission's action plan move forward. It would take three or four years for everything to be in place, she said, giving her assurance that the Commission plans to make very concrete improvements to the management of Community money (she cited, by way of example, research policy, on which the Treaty is not sufficiently clear).
Furthermore, Ms Schreyer hoped the European Council of Nice would not put the Commission's proposal to create the post of European prosecutor for the defence of Community funding against fraud back "in the drawer". She observed that today there is greater "comprehension" of such a proposal but "we are still being told it is too soon". She hoped that the Nice Summit would give at least a timetable so that this proposal might be discussed in the future.