EU Accounts - Problems of Probity

Complaints in the media about the EU Accounts are hypocritical. The reasons why there is not greater probity on this issue or real political concern are as follows:
1. Any solution would have to increase the powers of the European Commission and Parliament to investigate and fine member states government’s public finances. I doubt our Chancellor would not permit an intrusion, nor would member states government be prepared to surrender such power to Brussels.
2. There is no European wide common standard of public finance accountancy; each state has its own traditions and standards. So it makes the job of the European Court of Auditors a very difficult one.
3. As the EU has grown the opportunities for human error and yes fraud have grown.
4. Member states implement over 90% of the EU budget on behalf of Brussels. Each with its own tradition of accountancy means it is not always fraud that is to blame for tracing funds.
5. Implementing EU policy is often very difficult, take the CAP, policy makers have to administer an agricultural policy that has to deal with widely different farming regimes from the giant agribusinesses of East Anglia to Artic rain deer herders and Spanish olive groves.
6. There is the problem of differing administrative cultures and languages, which can make it hard to achieve things.
7. The present system allows for politicians the flexibility to divert funds to pet public projects which a strict interpretation of the rules would not allow.
8. In public finance, accountancy traditions are not always the same as for business, if you read the background to the stories over the years, what you learn is much of the missing EU budget funds can not be accounted for to the criteria that the European Court of Auditors works to. Which can mean they know where much of it is, but do not have the quality of evidence required.
Just to put things in proportion the British Department of Work and Pensions has not had its books signed off for the last thirteen years. Also using a business comparison, an accountant signing off the books of a firm does not mean all is right with the firm, as investors found to their cost with ENRON.

If you really want this matter tackled then the following things have to be achieved:
1. The European Parliament has to have a powerful Parliamentary Accounts Committee that works with the European Court of Auditors with full powers to investigate and fine member governments.
2. A common European Standard of Public Finance Accountancy has to be introduced.
3. The European Commission has to take full control of implementing its £67.2 billion budget.
4. The systems for implementation of the budget have to be simplified.

I should think many a euro-sceptics and pro-european politicians would work together to prevent such reforms for improving the probity of EU accounts from ever being implemented.


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