Brussels, 17/01/2006 (Agence Europe) - On 17 January, the European Commission adopted an Action Plan to gradually make the EU financial control architecture credible and robust. The Action Plan will help the Court of Auditors in its work of controlling the EU budget expenditure. The Commission has given itself the target of achieving a positive 'Declaration of Assurance' (DAS) during its term in office. In November last year, the European Court of Auditors refused for the eleventh year in a row to give a positive DAS (a clean bill of health) to the overall EU budget (see EUROPE 9068).
In June 2005, the Commission published a Road Map for an integrated internal financial control framework (see EUROPE 8970). The Action Plan adopted on 17 January takes account of the conclusions of the 8 November 2005 ECOFIN Council which rejected the European Parliament's suggestion, made in its discharge for the EU's 2003 budget, that Member States should make annual statements about conformity and declarations of assurance at the highest possible level. The ECOFIN Council concluded that existing declarations at operations level could provide an important means of assurance but it recognised the futility of statements at national level. The Commission is therefore suggesting that efforts are made to ensure existing declarations and declarations foreseen in future legislation should guarantee the best level of effectiveness of the EU budget spending control structures. It is recommending that Member States appoint one interlocutor following the example of farm coordinating bodies. The aim is to extend to the Structural Funds mechanisms existing in farm policy. The Commission has defined other action under the following headings:
Simplification and common control principles. All three institutions (Council, Parliament and Commission) attach great importance to simplifying legislation concerning the Financial Perspectives 2007-2013 (the EU's future budget). The European Commission believes the Council and European Parliament should take advantage of the consultation on revising the Financial Regulation to give their views on the need to introduce common budget 'principles' for effective financial control. It wants the Court of Auditors, in its work on the DAS, to make use of the annual activity reports of the European Commission's departments, emphasising a consistent approach to evaluating the risk of error in the underlying transactions. In March 2006, the European Commission will launch inter-institutional dialogue on the basic control principles to be used for tolerable risks in underlying transactions. In the light of these talks, the European Parliament and Council should reach an initial agreement on the issue by the end of the year.
Common approach to financial control. Member States are urged to actively cooperate with the relevant European Commission bodies to decide on strategies and guidelines for audit, audit planning and pooling the results of their auditing.
Addressing the gaps identified by participant services. The Commission outlines several important areas of improvement for the Structural Funds, and suggests promoting the 'Contracts of Confidence' initiative for the Structural Funds. The Road Map identifies the 'Contracts of Confidence' as 'an initiative that can assist in rendering controls effective throughout the programming period. The ECOFIN conclusions added further impetus to this initiative and the political level commitment of five Member States (the UK, Denmark, the Netherlands, Austria and Portugal) to sign such contracts has recently been obtained. To enable constituent approaches to be adopted for each policy family, the European Commission will formalise guidelines per policy family in 2006 and 2007. The Commission comments: 'considerable progress has already been made in many policy families via bilateral discussions in the area of effort rates, recoveries, audit approaches (risks and representative sampling) and on-the-spot checks.'
For around 80% of the EU budget, the European Commission shares implementation with the Member States. The Commission explains that 'it expects the Member States to have an adequate control framework in place which is correctly applied. They should ensure that their management of money on the Commission's behalf reduces the risk of irregular expenditure to an acceptable level, and that they can demonstrate this to national and Community auditors.'