Lords question European audit body's role

A House of Lords sub-committee is concerned that the European Court of Auditors has yet to produce an unqualified, positive statement on the European Union's financial affairs.

The sub-committee, which is investigating the court's role, recently heard evidence from the National Audit Office (NAO), and is to move on to Brussels before preparing its report.

Members of the sub-committee are also concerned about the progress the court is making, its members' qualifications and the problems that are likely to be encountered when EU membership is enlarged.

The court is the EU's external auditor. Since the Maastricht Treaty in 1994, it has become an institution in its own right and has been assigned additional tasks, including the provision of an annual assurance statement on the reliability of the EU's accounts.

'Ever since 1994, the court has produced a non-statement of assurance,' said Lord Tomlinson. 'It's never been able to produce a positive statement.'

Caroline Mawhood, assistant auditor general at the NAO, which itself reports on the EU's financial management and is therefore familiar with the court's workings, said that part of the problem with providing assurance arose from the complexity of the EU schemes that the 15 different member countries had to administer. One solution would be to simplify the implementation of schemes, which would be the European Commission's responsibility.

NAO international director Richard Maggs said that the court was still relatively young and had not fully developed its own culture of operation. In terms of enlargement, it will face a range of problems that will have to be addressed, but he was confident that some of the candidate countries already met the required audit standards.

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