Headlines: April 27th, 2001

The National Audit Office has again heavily criticized the European Commission for its inept financial management. The accounts produced by the Commission are unreliable, the high rate of error has not improved in the past six years and fraud continues unabated. The report authors have drawn on the Annual Report by the European Court of Auditors, which covered the management of the General Budget of the European Union for 1999. The Commission has overall responsibility for implementing the Budget, which totalled 54 billion pounds in 1999.The Commission has begun to implement the strategy for reform which was developed by Commission Vice-President Neil Kinnock following the resignation of the previous Commission in 1999. The key elements of the strategy are strengthening audit, financial management and control. Progress has been patchy and much of the reform strategy is yet to be implemented. One of the main obstacles to be overcome is a culture change which will take time to achieve.

In response to revelations about the scale of fraud the Commission set up a European Anti-Fraud Office in 1999. Because of delay in recruiting staff the Office is not yet fully operational. The report expresses concern about the effect this delay is having on anti-fraud investigations.