De jaarlijkse beoordeling van de EU-begroting: Veel Gestelde Vragen (en)

What is the purpose of the annual report by the European court of auditors (ECA)?

The ECA annual report is foreseen by the Treaty. It is transmitted to the Council and the European Parliament to serve as a basis for the annual discharge procedure. The discharge clears the Commission and other institutions for its management of the budget.

According to art 274 of the Treaty on European Union it is the Commission who is responsible for implementing the expenditures relating to the European policies, such as the common agricultural policies, the structural funds etc as well as the revenues. The other institutions only manage the administrative expenditures relating to their own functioning.

The report concerns the management of the Community funds. It concerns all those who manage these funds. The Member States manage, in partnership with the Commission, 85% of the Community budget. The remarks of the Court of Auditors therefore concern them at least as much as the Commission. Without their co-operation, no substantial improvement is possible. Moreover, the Commission and Member States work together in order to strengthen the management and control standards.

The purpose of the report is above all to give assurance on the soundness of the Commission's management . The Court's comments give weight to the Commission's improvements.

For example, in the field of the Structural Funds, Regulation 2064/97 contains the provisions regarding the controls to be carried out by the Member States. Since the entry into force of this Regulation, the Commission has made great efforts to give detailed guidance to Member States on the implementation of its provisions. For instance it has given guidance through the Structural Funds Audit Manual, first presented in June 1998. It has given guidance through the systematic treatment of questions relating to the regulation within the framework of the bilateral co-ordination meetings with Member States, especially in the annual meeting of EU Financial Controllers in 1998, 1999 and 2000. Since 1999, a number of audit missions have been carried out by the Commission's Structural Funds services to assess the application of the regulation.

What is the statement of assurance (DAS in its French acronym)?

The statement of assurance looks at the legality and regularity of the underlying transactions and at the reliability of the Community accounts.

The 'Statement of Assurance' is not the 'Discharge'. Even if the Court of Auditors does not deliver a fully positive Statement of Assurance, the Discharge can be and has been given. The Statement of Assurance, which has existed since 1995 (for financial year 1994), has never been entirely positive on all operations for any financial year, except for the reliability of the accounts.. This is not unusual. Though no complete equivalent exists in Member States, no national court of auditors gives assurance unreservedly for all government departments every year.

Did the Court of Auditors deliver a negative Statement of Assurance for the Year 2002?

The Court delivered positive Statements of Assurance in several fields: revenue, the reliability of the accounts, commitments, administrative expenditure (payments) and pre-accession aid as well as revenue and payment operations under the European Development Funds (EDF).

Since the coming into existence of the annual declaration of assurance DAS for the year 1994, the Court of auditors has always given a positive DAS for the accounts (as well as to the commitments, revenue and administrative budget) It did not, however, deliver a positive Statement of Assurance on non-administrative (i.e. operational) expenditure (payments) of the general budget. These are for more than 80% managed jointly by the Member States and the Court has declared that it is not in a position to give assurance as to the final use of the money.

What is the timetable for the discharge 2002?

The presentation of the ECA annual report launches the discharge procedure. The ECOFIN Council will make a recommendation in March 2004 to the European Parliament. The EP will vote on the discharge for the general budget, the ECSC and the EDF in April 2004. But proceedings have started already, the EP rapporteur for the discharge of the general budget, Mr Bayona de Peregordo (PPE-DE), has already sent a questionnaire (200 questions) to the Commission. The ECA annual report is followed-up by an action plan established by the Commission on how the remarks by the Court can be addressed. The discharge itself is also subject to follow-up , in the form of a report from the Commission to Council and EP.

What has changed compared to the year 2001?

For the first time the Court decided to have a separate chapter on budget implementation instead of treating these aspects in the headings following the type of expenditure.

For the second year, ECA expresses strong support of the Reform drive that the Prodi Commission is implementing.

For pre-accession aid, the Court's audits on the payments did not reveal material errors.

A more qualitative assessment : In 2001 the Court began moving over to a new approach based a more qualitative & systemic evaluation of the Commission's management. The shift has been confirmed, accentuated and refined for 2002.

The Court evaluation is no longer based on limited samples, it now for each heading evaluates the operation of internal control systems, examines the declarations by the Directors-general and uses other auditors' findings. The Commission is eager to discuss any further development in the Court's audit methodology for the future, especially with regard to the definition of new indicators or monitoring elements to be developed by the Court. The overall assessment is not fundamentally different from that for year 2001, despite developments in the Court's DAS methodology, and despite higher standards being required.

What does the report say about the Commission's accounts and the modernisation effort?

The Court has declared the accounts reliable since financial year 1994, when it was required to make such a Statement . Meanwhile improvements to the accounting system have been made. The consolidated accounts include all EU Institutions.

The Commission has not only a budget and cash accounting system but has introduced accrual information in the general accounts. The result confirms the Commission's view that the accounting systems are basically sound, but has some observations on the consolidatet financial statements, and the final balancesheet. It praises the financial report for the year 2002 as a very useful document.

On the modernisation of the accounting system, the Court comments on the definition of accounting standards and the timetable. The Commission presented an action plan for the general modernisation of its accounting systems in July 2002, and a timetable in April 2003. Full accrual accounting will have to be operational for 2005, as required by the Financial Regulation. The Court recognises the Commission efforts as very ambitious, especially as concerns the timetable. On the accounting standards, a committee has been set up, which is in charge of adapting the international standards to the Commission's needs. The Court participates as an observer in it.

The budgetary execution : why did the Court feel the need for a new chapter on this issue?

For the 1^st time the ECA annual report includes a separate chapter on budgetary management and implementation.

The Court notes favourably the decline in budget surplus (7.4 billions , down from 15 billions) , which was picked up as worrying development last year. The bulk of this surplus stems from the structural funds, followed by CAP. But the Court still criticizes unrealistic forecasts by the Member States and the use of budget carry-overs and argues that the Commission should have presented an amending budget to reduce revenue in the course of the year. The Commission has done so in 2003 with Amending Budget 7/2003 relating to closing of the previous structural funds programming.

What does it say about the Commission's ongoing reform ?

The Court praises regulatory measures taken and acknowledges that change takes time. It states that the Commission's Reform is on track and that considerable progress has been made in the implementation of the numerous measures.

Improvements cover a lot of areas, such as the implementation of the new Financial Regulation, the responsibility and accountability of Authorising Officers by delegation, the establishment of internal control standards aiming at helping in defining the internal control systems within the Commission's Directorates-General as well as the quality and consistency of Annual Activity Reports and Declarations by Directors-General.

The Court finds the Annual Activity Reports very useful and has drawn elements from the Annual Declaration by Directors General into the report. The Court recognises the Commission's profound reforms as ambitious. The aim of the Commission is to improve its long-term management. Now that most of the reform proposals are actually designed and in the process of being implemented, the focus has shifted to making sure that the different Commission services take advantage of the reforms and apply them comprehensively.

Court asks for regular updated monitoring if the implementation of the reform.

As concerns internal control standards, such as description of procedures, it asks for the Commission to take all necessary measures to ensure quickly their full implementation .The Commission will also continue its focus on recoveries. The monitoring process on the clearance of the backlog of recoveries of unduly paid funds will be led by central services which will develop indicators of performance and information systems that will allow a Commission-wide overview of overall performance and effectiveness

The Commission's strategic planning mechanisms are starting to become operational, and have already allowed a finer analysis of real needs in personnel.

These measures will have a medium-term impact on the quality of financial management, and this will be reflected in the reports of the Court of Auditors in the years to come.

The report of the Court of Auditors for 2002 cannot, therefore, take into account these reforms.

What does the Court say on decentralised management or funds managed by the Member States?

The Court addresses the complication created by management of the EU funds via the member states and encourages the Commission to further improve cooperation. The Commission has been checking that the management and control systems in Member States meet the required standards, is intensifying the co-ordination of audit work, and is pursuing an initiative whereby Member States will enter into a "contract of confidence" which will enable the Commission to rely more directly on national audit work.

As regards specifically the Structural funds, the package of measures to simplify implementation of Regulation (EC) No 1260/1999, without amending it, was adopted in April 2003 ("Communication on the Simplification, Clarification, Co-ordination and Flexible Management of the Structural Policies" C(2003) 1255). The measures concern audit and controls, the mid-term review and programme amendments, indicators, the performance reserve, annual meetings and monitoring committees, reporting and financial management. The Communication indicates that the Member States should also streamline their internal procedures, which can be a source of complication. The Commission took account of the requirements of sound financial management in adopting the measures.

Besides, a communication was drafted with the Commission's departments concerned in order to clarify the role of directors-general in shared management, within the relevant legal context and within the limits of their responsibilities [C(2003) 1830].

Under the action plan based on the summary report on the annual declarations for 2002, the Commission will further analyse the scope of responsibilities within shared management with a view to issuing a communication, including possible recommendations, by March 2004.

What does the Commission think of the change in methodology applied by the Court? Does the Commission believe that system analyses are more or less effective?

Since last year the Court has developed an approach, which is based on an audit of management and control systems in the main areas of Community activity (determined according to the magnitude of the amounts involved or from a risk assessment). It has evaluated their ability to guarantee the legality and regularity of the underlying transactions and has also attempted to identify shortcomings.

This new approach makes possible a detailed and finer analysis of the quality of Community management and also because it provides the Commission with more guidance regarding corrective measures to be undertaken than the quantitative method does. The Commission hopes that the Court will be able to apply this new system in a way that avoids the problems of the past arising from unsubstantiated extrapolation of audit findings. This new approach is welcomed as it conforms more to the approach used in Commission Reform than the traditional transaction based auditing.

The Commission is particularly interested in any recommendation from the Court asking for the incorporation of improved indicators into the Commission's management plans, Annual Activity Reports and Directors-General Declarations in order to give assurance on its management of the budget.

When will the Commission obtain a Statement of Assurance on general expenditure?

The Commission cannot commit itself to decisions, which belong to other institutions. The Commission never pledged to receive a Statement of Assurance from the Court of Auditors at any given time in the future. It is up to the Court of Auditors to judge the reliability of the accounts, as well as the legality and the regularity of the underlying operations and the Statement of Assurance falls within the Court's competence alone.

In its resolution adopted at the time of the vote of the discharge of the financial year 1999, the Parliament urged the Commission to ensure that it achieves a positive statement of Assurance for budget year 2003 at the latest. The Commission has stated that it "is committed to do all in its power to improve the DAS as quickly as possible".

If the Court considers that it cannot deliver a Statement of Assurance on expenditure now, how will it be able to do so after enlargement?

First, the enlargement will not change substantially the order of magnitude of the Community budget. Second, the adoption of systems of audit and financial control constitute a chapter of the accession negotiations. Lastly, the reform of the Commission will take full effect before the enlargement, enabling the Commission to manage the arrival of the new Member States efficiently. There will be further support for institution-building before enlargement and the Commission will monitor the preparations of the Candidate Countries to manage EU funds in 2003.