Local view for "http://purl.org/linkedpolitics/eu/plenary/2002-12-17-Speech-2-190"
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"en.20021217.6.2-190"2
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".
Mr President, ladies and gentlemen, today the Commission has adopted a financial reform package that marks a crucial stage in this Commission’s reform efforts. Firstly, the legislative framework for the new Financial Regulation is completed; the Commission has adopted the Financial Regulation's implementing regulation, along with procedural rules for the collection of receivables. It has taken a great effort by all concerned, the European Parliament in particular, to reach the goal of the European Union having a new, modern budgetary law by 1 January 2003. This new budgetary law will provide better protection for the Community’s financial interests – I might mention, for example, the securities to be lodged by the recipients of advance payments, the obligation on contractors to provide auditor’s certificates or the Commission’s ability to bar contractors from tendering procedures if irregularities have been found in the past. This new budgetary law will also make budget execution more transparent and more coherent.
With Mr Gray as chief accountant and Mr Oostens as director of the accountancy division, we shall have two qualified and experienced accountants and qualified managers at the head of this ambitious project which, if it is successful – and I am confident that it will be – will put the EU administration at the forefront of modern public administration in accountancy as it is in other areas.
All in all, today’s package of decisions that the Commission has now adopted underlines that the Commission and the administrative reform package have long since passed the planning stage and have entered implementation, and I am pleased to have been able today to present these steps forward in financial management to the European Parliament, which is supporting us with its constructive criticism.
Secondly, the Commission has made an overall assessment of the preparedness of its services for the implementation of this new budgetary law. This shows that considerable progress has been made in bringing the old
controls into the services’ internal control procedures. Any remaining problems will receive continued attention and the concerted efforts of all concerned. Horizontal services will provide targeted support.
This creates the conditions for ending central financial control at the end of this financial year and also for winding up the remaining parts of the Directorate-General for Financial Control by early 2003. Most of the staff released in that way will be made available to the services to complete the human resources for financial reform that they have built up in the last three years. The sections of the Commission managing funds will then be fully responsible for budget implementation including the necessary control measures.
Finally, the Commission has today also adopted the communication on the modernisation of the Communities’ accounting system. This communication is divided into three parts. First, reform of the bookkeeping rules; second, adaptation of the supporting information and technology system; and third, the architecture of project management. The Commission had promised the European Parliament and the Court of Auditors to present these measures and the timetable by the end of this year. In so doing, the Commission is taking another important step in the long-term strategy for the modernisation of its accounting system that was begun in the year 2000. In 2000, the Commission presented a study that led to the Commission proposing that the Financial Regulation should incorporate new bookkeeping rules using accrual accounting. This communication now sets out step by step the action that must be taken to make the modern system available by 2005.
In future, bookkeeping will be done by the double entry system. The budget account will use traditional cash accounting for budget revenue and expenditure, which is what the budgetary authority requires for checking the execution and implementation of the Budget; this means that the actual expenditures and actual receipts will be compared with the estimated amounts decided in the budget. The accrual accounting, however, will also have to incorporate the capital account for the European Budget’s cash flow statement, and new standards will be introduced for this part of the budget account corresponding to the international standards that were recently adopted; I shall come back to that in a moment.
For the purpose of introducing the new standards required by the Financial Regulation from 2005 the Commission’s chief accountant will be working out the specific details of how these international standards are to be implemented for the various measures financed out of the European Union’s budget. A new Accounting Standards Committee will be created for the purpose. Various experts from the services as well as from outside will be represented on this committee. Another important point is that the new system will apply not only to the Commission’s bookkeeping and accounting, but also to all European institutions, that means also to Parliament and to the budgets of the Council, the Court of Auditors and the agencies. The standards in question are in fact very new. This international body adopted its first standard for the public sector in 2000, the last standard in October 2002. They are therefore quite new rules and we will be using them as a benchmark for our accounting system. When this project is introduced, the European budget will be in the vanguard of accountancy rules.
For the new standards to be introduced, the technical support provided by the underlying computer system, that is the information technology, will also have to be modernised. The system currently used for accounting is Sincom 2. It was introduced in 1997 and extended to all fund-managing departments in 1999. The SAP system – which all the experts call A3 for short – is crucial for the Commission’s bookkeeping, and the closure of the books and presentation of the annual statement depend entirely on this system. At the same time, the SI II system was developed for departments managing resources and data on all relevant measures, that is, all data relevant for accounting have to be input into it. Experience shows, however, that the future system must be a fully integrated system for bookkeeping purposes. So far as complete integration allows, however, account should also be taken of the services’ different requirements and respective management tasks, which are also subject to different requirements for the various sections of the European budget.
There are three options for modernising the IT system in question, namely continuing with the present system as before, introducing a completely new system or developing an integrated system from what is already in place. As you will have inferred from what I have said, the Commission rejects the first option. A feasibility study will be made of the second and third options, which will be ready in the first half of 2003. A decision will then be taken on the steps that can be taken to develop an integrated system.
How will this project be organised, given that it is a large-scale project covering the Commission and all the European Institutions? The project organisation puts the chief accountant at the centre of the project. The Commission has today decided to appoint Mr Brian Gray, the new deputy director-general of the Directorate-General for the Budget, as chief accountant to see through this ambitious reform. This means the Commission has decided to give this project the highest grade, A1, in order to make clear that the necessary authority is also necessary in the grade if we are to take all the institutions and all the services here with us. There will be a Project Oversight
Board with representatives of the most important services and also of the European Court of Auditors to assist with the implementation of this ambitious and expensive project."@en1
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