accountability, the aching tooth ?

Towards reform of the EU Budget _________________________________________________________________________________

Accountability,Accountability,the aching tooth ?the aching tooth ?

European Parliament Budgetary Control Committee – 6 May 2008

Gabriele CIPRIANI, Director, European Court of AuditorsGabriele.CIPRIANI@eca.europa.eu

A point of view on_________________________________________________________________________________

The assurance system for structural policies.

Threats to full accountability.

A chance for improvement: reform of the EU Budget.

Background_________________________________________________________________________________

The EU budget and national budgets.

‘Policy eligibility’ checks.

‘Shared’ management, one final responsibility.

Audit opinion at closure

Commission audits

Annual opinion basedon national audits

Certification of expenditure+ first level verification

Compliance assessment ofmanagement and control systems

Guarantees in programme negotiations

Ex ante

Ex post

During

implementation

Source: European Commission - DG Regio

How assurance will be built up

_________________________________________________________________________________

2007-13 Programmes_________________________________________________________________________________

Source: European Commission - DG Regio – stand 5.2.2008

Community Amount

344,4 billion Euro

National Public Amount

143,6 billion Euro

However..._________________________________________________________________________________

The ECA continues to record an high 'error' rate (at least 12 % in 2006).

This shows that : control systems in the member states are

generally ineffective, or only moderately effective, and

the Commission exercises only moderately effective supervision to prevent reimbursement of overstated or ineligible expenditure.

Many serious ‘errors’ are a breach of national rules and are originated by inadequate ex-ante systems.

Where the problem lies

_________________________________________________________________________________

Source: European Court of Auditors – Annual Report 2006

Red (Unsatisfactory) Red (Unsatisfactory) 25 Cells25 Cells

Green (Satisfactory) Green (Satisfactory) 23 Cells23 Cells

Yellow (Partially Satisfactory) Yellow (Partially Satisfactory) 28 Cells28 Cells

The ‘Contract of confidence’

_________________________________________________________________________________

the Commission having reasonable assurance that the financial management and control systems comply with the requirements.

national authorities having drawn up a satisfactory audit strategy covering all audit activity for the whole period.

Member states undertaking to submit reports providing an adequate basis for assessing the effective implementation of the audit strategy and setting out conclusions with regard to the functioning of the management and control systems.

A ‘triple-A’ rating, subject to :

Threats to full accountability

_________________________________________________________________________________

No assurance, no full accountability.

‘Shared’ management, ‘shared’ interests ?

‘Preventive’ actions, the key issue.

Are more rules needed ?

Financial corrections, a short-cut ?

_________________________________________________________________________________

Dissuasive ?

Exhaustive ?

A ‘cure-all’ ?

Summing up_________________________________________________________________________________

Reputation risk.

Legality of spending, a key condition for effectiveness.

‘Value for money’ concerns.

However, we have a chance...

The EU Budget reform_________________________________________________________________________________

One EU Budget, one final responsibility.

Objectives in line with the resources.

Prevention is better than cure.

A dynamic of rewards.

‘Who fails pays’ principle.

‘Policy eligibility’ checks.

Thank you for your attention.

Cipriani, G. (2007), Rethinking the EU Budget : Three Unavoidable Reforms, CEPS paperbacks, CEPS, Brussels, November. http://shop.ceps.eu/BookDetail.php?item_id=1563

Cipriani, G. (2006), The Responsibility for Implementing the Community Budget, CEPS Working Document No. 247, CEPS, Brussels, June. http://shop.ceps.eu/BookDetail.php?item_id=1353