Select Committee on Public Accounts Thirty-Fifth Report


THE ANNUAL REPORT OF THE EUROPEAN COURT OF AUDITORS FOR 1996

GENERAL THEMES FROM THE COURT'S 1996 ANNUAL REPORT

13. In their Annual Report for 1996, the Court highlighted several general administrative and control weaknesses in the financial management of Community funds. These were:

      (i)  the failure of agricultural compensation schemes to take account of changes in world market prices resulting in unnecessary expenditure;

      (ii)  the extensive use by the Community of advances which were accounted for as actual expenditure. The rate of use of funds at final beneficiary level was unclear and consequently substantial funds had remained in the hands of intermediary bodies;

      (iii)  where there was doubt about the proper use of Community funds the Commission could only recover those funds if they could prove that they had been wrongly used. This was a problem, especially in the Structural Funds, because information and accounting systems had not been developed within all beneficiaries and intermediary organisations to permit the Commission to exercise this supervisory function;

      (iv)  the failure, particularly by authorities in the Member States but also in the Commission, to develop appropriate systems of accounting and financial management which kept pace with expanding and diverse Community activities; and

      (v)  deficiencies in the efficiency and effectiveness of Community financing, particularly for the Structural Funds where the objectives were not clear and performance indicators had not been set.



 
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