Local view for "http://purl.org/linkedpolitics/eu/plenary/2002-12-04-Speech-3-010"
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".
Mr President, Secretary-General, ladies and gentlemen, it is my pleasure to be able to present to you today the Annual Report of the European Court of Auditors for 2001.
The Court has analysed the follow-up given to its previous observations. Generally speaking, the Commission has taken appropriate steps to remedy the shortcomings highlighted. For example, outward processing customs arrangements have been simplified, the legislation promoting joint enterprises in the fisheries sector has been improved and tendering procedures under the TACIS programme have been revised.
In other sectors developments have been less satisfactory. This is the case of the system of aid for durum wheat, where deficiencies that the Court pointed out in 1998 are still in evidence and some EUR 450 million are spent unnecessarily every year. This is also true of the Common Market Organisation for sugar, where, despite the 2001 reform, problems of overproduction and high prices persist.
When the Audit Progress Committee starts work, I am certain that the Commission will be able to be more diligent in following up the Court's reports.
Let us now move on to the Statement of Assurance.
It is the opinion of the Court that the accounts for 2001 reliably reflect the revenue and expenditure and the financial situation of the Communities. However, the Report does express some reservations and observations which for the most part concern defects in the accounting system on which the Court has previously remarked.
In its reply to our Report, the Commission acknowledges these shortcomings and undertakes to present a plan to modernise the accounting system before the end of 2002. The Court will examine the conception and implementation of this plan and will keep Parliament informed of its progress.
As in previous years, the Court is of the opinion that the transactions underlying the revenue, commitments and administrative expenditure are legal and regular. Nonetheless, because of the errors that we have highlighted we are unable to provide this assurance in respect of the other payments.
Most errors were detected in payments relating to agricultural policy and structural measures – in other words, in those management areas which the Commission shares with the Member States, and which account for some 80% of the budget. Reducing the frequency of errors will be contingent on significant improvements in the administration and control systems of both the Commission and the Member States.
Take the common agricultural policy, where the declarations submitted by the beneficiaries of subsidies have not improved compared with previous years. The launch of the Integrated Management and Control System has not been completed, and almost half of the Member States have not introduced the bovine identification system, which has been compulsory since 2000.
Other errors are linked to deficiencies in the controls carried out by the Member States (in the case, for example, of olive oil and cotton). The Court's recommendations obviously include the full implementation of the control mechanisms provided for in the Regulations.
I have organised my comments into four main sections: firstly, the analysis of budgetary management; secondly, the follow-up given to the Court’s previous observations; thirdly, the Statement of Assurance (DAS); and fourthly, the reform of the Commission.
As regards structural measures, further erroneous payments were discovered, caused by deficiencies in the control systems and in the Member States' declarations of expenditure. The Court is concerned about national governments' delay in applying the management and control instruments for the new programming period; the inspection units are not operational and there is no independent control of transactions. It recommends that the Commission intensify its checks and systematically turn the findings obtained to account.
In the context of internal policies, which are directly managed by the Commission, examination of the fifth framework programme for research revealed incorrect payments due to the failure of beneficiaries to comply with contract provisions. The Court recommends simplifying the systems for reimbursing expenditure and introducing more effective sanction mechanisms.
The national authorities in the beneficiary countries and non-governmental organisations play a decisive role in the management system for external aid programmes. Examination of the supporting documentation that is available centrally (in Brussels) leads to the conclusion that the Commission has legally and regularly met its commitments and payments.
Nonetheless, the Court has no assurance that these operations were carried out correctly in the beneficiary countries, where the control systems are inadequate and errors have often been detected on the spot. The Commission must work more intensively to transform external aid – where progress has already been made.
To conclude this theme, I should like to open a short parenthesis. In recent months there has been lively debate concerning the Commission's accounting system. This is a good thing, and I hope that the interest thus aroused will help to push through the reforms that the Court has long been advocating. However, in some respects the debate has suffered from a lack of precision and balance. The time has come to introduce some order and draw up an objective map of the situation.
To this end, it should be stressed that, despite certain reservations, the Commission's accounts are reliable. Accordingly, save perhaps in a few specific areas, the figures provided by the budgetary accounts correspond to the actual use made of appropriations. This view is borne out by a rigorous professional auditing effort, in which the Court has invested considerable resources.
Yet this effort has also led the Court to criticise the accounting system. The shortcomings that have been highlighted make it difficult to obtain the better-quality information that is necessary to improve management. I refer, for example, to the deficiencies in the system of accruals accounting when it comes to presenting the state of the Commission's assets and liabilities. For years the Court has been drawing attention to these defects, and at last its observations appear to have elicited some response. Today we are determinedly pressing the Commission to take remedial action. When we meet here again next year we will just as determinedly demand results, which I am confident will be positive. In the meantime, I would ask that the Commission be allowed to concentrate on this task, which is not at all easy.
Let us now deal with what I believe to be a crucial issue in the Report: the reform of the Commission.
2001 was a year of transition which was marked by significant progress, especially in the fields of financial management and internal control. Let us see what the Court's main observations in this respect are.
Firstly, I would like to point out that certain measures are not being introduced within the time limits stipulated. This delay is above all due to an overly ambitious initial timetable, as the Court has already complained. Secondly, the Council has adopted a new Financial Regulation which the Court considers generally appropriate. Despite some remaining unsatisfactory elements, this is a good instrument which will help to improve the administration of Community funds.
Let us begin with the analysis of the implementation of the budget.
For the first time, the Directors-General have drafted activity reports and prepared declarations on the quality of information and internal control. Increasing top managers' accountability in this way is one of the keys to the reform's success. This is a genuine revolution in the Commission's management culture.
We recommend improving the approach to drawing up reports and declarations: presentation dates must be brought forward and guidelines must be issued in more precise terms, avoiding ambiguity, specifying possible observations and reservations and more clearly outlining plans of action. The Commission has summarised the reports and declarations by the Directors-General in a single document which it has submitted to Parliament and the Council. This summary includes a plan of action which aims to remedy the problems that have been identified. The plan should provide more detail on issues such as the monitoring of internal control standards and the reform of SINCOM.
Finally, one aspect of the reform deserves greater attention. I refer to the Member States' management of programmes under what is known as 'shared management'. The Commission is having problems with incorporating concrete measures aimed at checking and improving the effectiveness of these management systems, which account for more than 80% of the budget, into its overall strategy. Solutions urgently need to be found, but the Commission on its own is powerless: it needs the active collaboration of national governments.
I believe that this message provides an appropriate conclusion to my speech.
The reform is progressing positively. The Commission has met its commitment to work hard on improving its administrative and control practices. However, it will take more time to achieve the excellent and exemplary administration we all want to see. It is a laborious process to which all the institutions must contribute their experience.
Each year the Court will analyse the progress made, report on the deficiencies and recommend any measures it considers necessary.
I thank you very much for your attention.
For the second consecutive year there has been a high budgetary surplus, greater than EUR 15 000 million (16% of the final budget). The surplus is due to the cancellation of appropriations caused mainly by the delay in the implementation of structural measures. It would have been appropriate to modify the budget to maintain the balance between the forecast expenditure and revenue.
Another crucial feature of the budgetary management was the low rate of use of payment appropriations in certain areas. In the case of the Structural Funds, percentage of use was less then 70%, the lowest level since 1999.
Delays were also a feature of the implementation of pre-accession aid, especially in the case of the SAPARD programme, where only 9.2% of the appropriations were disbursed. What is more, only EUR 1 million were received by the final beneficiaries of this programme. If the pace of implementation does not pick up, appropriations will have to be cancelled in 2003.
The Commission must continue its effort to clear the accounts by cancelling those commitments which can no longer be implemented. Outstanding commitments amount to EUR 12 000 million in the case of external aid and to nearly 3 000 million in the case of the new pre-accession instruments.
The rate of implementation of the European Development Funds is just as sluggish. After four years, only 30% of appropriations under the 8th EDF have been disbursed.
To conclude, the estimates made for these programmes in terms of implementation and payments need to be more realistic and take account of each country's capacity to absorb aid. This would result in a more accurately calculated and balanced budget."@en1
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