saskia j stuiveling president netherlands court of audit

Wednesday, 19 December 20071

CoCoBu meeting with budgetary control committees of national parliaments

onNational management declarations

Audit of the Netherlands’ Member State declaration

Saskia J Stuiveling

President Netherlands Court of Audit


This presentation

• Improving the system: audit cooperation in

the EU

• Member State Declaration of the

Netherlands and audit by NCA

• Experiences: process and substantive

issues

• Conclusions and recommendations


Who wants to improve the system?

• European Parliament: Clearance of Accounts 2003 –

2005 with strong call for MS declarations

• European Commission: Roadmap 2004 + Action Plan

2006 ask MS SAIs for annual audits & reports to national parliaments

• ECA: Single Audit Opinion 2004 + Opinion Annual Summaries and Member State declarations 2007

• National Parliaments: COSAC resolution 2005 calls

for more attention to EU financial management and annual reports by MS SAIs (+ new resolution coming)


EU Audit Cooperation

European Court of Auditors

European Commission

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MS 1: CAP Structural Funds Own resources







First Member State Declaration:the Netherlands

• Common Agricultural Policy, 2006, 1.2 Bln euro.

• Declaration by Minister of Finance, on the basis of sub-declaration by minister of Agriculture

• Signed in Brussels, May 2007

• Declaration positive on:

functioning of systems

legality and regularity of transactions

• Next (2008) declaration also on CAP (2007). From 2009 declaration also includes Structural Funds, Fisheries, Migration Funds, and contribution to Own Resources


Accountability and audit structure CAP expenditure in the Netherlands

Member state declaration (Minister of Finance)

Sub-declaration (Minister of Agriculture)

Annual reports on CAP expenditure (paying agencies)

Inspection reports(AID, Customs, other)

AD Agriculturecertifying audit

Auditor’s opinion on CAP revenue and

expenditureby AD Agriculture

Investigation of sub-declaration by AdF

CAP management, accountability and audit

Implementation of the member state declaration 2006

Paying agencies’ internal audit services

Inspectorates’ internal audit services


Audit Netherlands Court of Audit

• Norms derived from European legislation

• Opinion on:

A. Preparation of the Declaration by minister of

Finance (and minister of Agriculture)

B. Functioning of management and control

systems

C. Legality and regularity of the underlying

transactions


Opinion Netherlands Court of AuditA. Preparation declaration: broadly sound, but improvement

possible:

auditors declaration covering full range of sub-declaration;

insight in criteria used by minister of Finance in judgement and reporting;

B. Functioning systems: generally sound

C. Legality and regularity: sound insofar as expenditure and revenu relate to public bodies. With regard to final beneficaries:

For 50% of CAP money reasonable assurance;

For 25% irregularities below tolerable threshold (1%)

For 25% (export schemes) no estimate of irregularities possible on the basis of available information


Experiences: the audit process

• High political profile Declaration has effects on audit process:

High time pressure

High intensity discussions with government departments involved

Norms derived from EU-legislation, but declaration as such not mandatory. Not all government departments convinced of necessity.

Stepwise process

Open communication and good relations essential


Experiences: substantive issues (1)

• Diversity within and between EU-institutions

regarding information they want to receive

from member states:

Different DG’s of the Commission use different

reporting moments (e.g. CAP and Structural Funds)

for Member State information

Annual report of ECA does not focus for all funds on

same year as Annual Activity Reports of

Commission.


Experiences: substantive issues (2)

• Interpretation legality and regularity differs between Member States, and between EU and Member States:

Degree to which statement of Member State to DG covers

systems only or also legality and regularity final beneficiaries

• Approach of auditing legality and regularity differs between MS SAIs, and between ECA and many MS SAIs:

Certain criteria for “output” of SAIs may be needed. Working Group on Common Auditing Standards step in that direction


Conclusions and recommendations• Audited Member State declarations can become part of

accountability EU, but

• Some harmonisation needed before a Member State declaration can include statement on more than one policy

area for the same year

• Together with improved Community Internal Control Framework leading to DAS by ECA:

1. 1. More transparency, both EU-Wide and per Member State

2. 2. More legality and regularity

• E.g. increase of “good governance”

• More accountability more confidence in EU

saskia j stuiveling president netherlands court of audit

Documents

cap structural funds

preparation declaration

auditors declaration

declaration positive

eumember state declaration

basis of subdeclaration

cap revenue

migration funds