Select Committee on European Union Twenty-First Report

Article 22: The Court of Auditors

1.  The Court of Auditors shall carry out the audit.

2.  It shall examine the accounts of all Union revenue and expenditure, and shall ensure good financial management.

3.  It shall consist of one national of each Member State. In the performance of their duties, its members shall be completely independent.

50.   The provisions of draft Article 22 mainly replicate existing Treaty provisions relating to the Court of Auditors. Two years ago, we conducted an inquiry into the European Court of Auditors (ECA)[29]. Our report highlighted a number of problems relating to the structure and functions of the ECA. In particular, the report warned that any enlargement of the European Union would accentuate these problems. The Committee concluded that urgent action was needed to ensure that the Court was properly structured and equipped to face this considerable challenge. The Committee remains concerned that, with the enlargement of the EU now imminent, it is still the case that very little has been done to reform the ECA. The opportunity afforded by the Convention to reform the Court appears to be passing by. We look forward to further proposals from, and discussions with, the Government on this question.

51.   Amongst the number of suggestions for action which we put forward in our report, none seems to us more crucial to meeting the challenge of enlargement than the proposal to endow the Court with a highly-qualified chief executive, supported by a strong auditing staff, and reporting to a part-time, non-executive board of representatives from each of the Member States:

"The ECA's present structure of 15 members of equal status, one from each Member State, who act as a college, is in need of change and, come enlargement, will have to change. A Court with over 20 full-time executive members would be unwieldy, sluggish and ineffective. The proposal for a system of "chambers", a concept now incorporated by the Nice Treaty, appears to be merely a mechanism to absorb members without improving efficiency and is not radical enough to solve this problem. We accept the need for national representation to ensure the confidence of Member States in the ECA. However, this would best be served by the impartial appointment of a highly-qualified chief executive, supported by a large team of audit staff, reporting to a part-time, non-executive board of representatives from each of the Member States. Such radical surgery would maintain the representation of the Member States and would considerably increase confidence in the ECA by strengthening the independent and professional nature of the audit function. Such an internal arrangement would in no way affect the ECA's external reporting requirements."

52.   This remains the position of the Committee. We are therefore deeply disappointed that the new Article 22(3) simply retains the provisions introduced by the Nice Treaty and states that the Court "shall consist of one national of each Member State."

53.   Peter Hain recognised[30] that the ECA "could prove very difficult to manage with 25 full-time members." He said that this problem was something that the Government were "prepared to look at with an open mind." This is encouraging, but the Committee considers that the Government must be more pro-active in promoting reform of the ECA, both within the Convention and ahead of the forthcoming Inter-Governmental Conference. The IGC will present the Member States with a unique opportunity to equip the Court to meet the challenge of enlargement; it is an opportunity which we urge the Government to exploit.

Article 23 : The Union's Advisory Bodies

1.  The European Parliament, the Council of Ministers and the Commission shall be assisted by a Committee of the Regions and an Economic and Social Committee, exercising advisory functions.

2.  The Committee of the Regions shall consist of representatives of regional and local bodies who have either been elected to a regional or local authority or are politically accountable to an elected assembly.

3.  The Economic and Social Committee shall consist of representatives of organisations of employers, of the employed, and of others in representative civil society, notably in socio-economic, civic, professional and cultural areas.

4.  The members of the Committee of the Regions and the Economic and Social Committee must not be bound by any mandatory instructions. They shall be completely independent, in the performance of their duties, in the Union's general interest.

5.  Rules governing the composition of these Committees, the designation of their members, their powers and their operations, are set out in Articles XY of Part II of the Constitution. The rules governing their composition shall be reviewed at regular intervals by the Council, on the basis of a Commission proposal, in the light of economic, social and demographic developments within the Union.

54.   Article 23 makes provision for the Committee of the Regions and the Economic and Social Committee. The membership of the Economic and Social Committee is being changed and it appears that it will in future be more derived from the professions than from representatives of manual labour (see Article 257 TEC). The membership of the Committee of the Regions appears unchanged, although the wording is simplified.

29   The European Court of Auditors: The Case for Reform (Session 2000-01, 12th Report, HL 36). Back

30   Q 21  Back

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