19 November 1999

Brussels takes look at books

BRUSSELS is to embark on a "root and branch" reform of its money-keeping practices, after serious criticism in the annual court of auditors report.

As ever, the courts report (covering the 1998 financial year), identifies a catalogue of mismanagement affecting about 5% of the EUs k90bn (£58bn) expenditure. But it fails to say how much is down to carelessness and how much is due to fraud.

Within agriculture, the number of substantive errors is still too high, says the report. "Half the errors concern final beneficiaries. In most cases they involve an over-declaration of surface area or of the number of heads of cattle. This was detected in almost all member states."

But the paying agencies were also guilty of inaccuracies. In the UK, for example, the value of animals slaughtered under the BSE-eradication programme had been over-estimated.

The severest criticism is aimed at the area of structural funds, intended to improve the infrastructure in the EUs poorest regions. A significant number of substantial errors was observed in expenditure declarations.

Budget commissioner, Michaele Schreyer, was quick to point out that much of the responsibility lies with member states, which handle about 80% of the EU budget.

"But better financial management is one of the new commissions top aims," she added. "I will make sure that this report is not just put on file; the recommendations of the court will be vigorously followed up."