The role of the Court and its
workings with national Supreme Audit Institutions
117. In common with all Supreme Audit Institutions,
the Court treads a fine line with the policy making and implementing
bodies. The Members of the Court we met were very aware of the
potential pitfalls of becoming "part of the political game"
(Q 121) as they felt it would compromise their independence. However,
through its reports, opinions and recommendations, the Court has
contributed a steady input to the reforms. Many of the Court's
recommendations were swept up into the Prodi-Kinnock White Paper
and action plan. Of particular note are the new internal audit
system within the Commission and the phasing out of the ex
ante expenditure approval system of which, as we have recorded
above, the Court argued in favour. In spite of these there was
some dissatisfaction from the Court that their contributions "are
not fully regarded by those who are addressing the problems"
118. We note the desire expressed to us by
Members of the Court not to become "part of the political
game". We consider that it would be highly inappropriate
for the Court to promote a political agenda.
119. In relation to its relationships with national
auditing bodies, the European Parliament has a different, more
activist conception of the role of the Court than the Court itself.
The Parliament's discharge decision for the financial year 2003
examined the extent of incremental reform made to the Statement
of Assurance over the years by the Court. While welcoming the
elaboration of the Statement of Assurance methodology, the Parliament
considered it "too modest"
and asked the Court to engage with national Supreme Audit Institutions
in pursuit of the "single audit" concept. The Parliament
also argued in favour of extending the "qualitative"
aspect of the Statement of Assurance to take into account the
multi-annual nature of many programmes. As a start, the European
Parliament called on the Court to conduct a series of annual "benchmark"
audits of the same programme area in all 25 Member States.
120. We have already alluded to witness evidence
concerning the trepidation of Supreme Audit Institutions to engage
in a national Statement of Assurance with a single audit model.
In its 2/2004 Opinion, the Court said nothing about the development
of a common external audit or of the incorporation of the Court's
or national Supreme Audit Institutions' activities into an overall
control framework as suggested by the European Parliament. As
external auditors, the Court argues that neither itself nor the
national Supreme Audit Institutions are a direct element of the
European Union's internal control frameworkto be so, would
compromise their ability to provide an independent overview. This
is the view supported by ECOFIN as we have seen.
121. The Treaty requires that Supreme Audit Institutions
"cooperate with the Court in undertaking its duties".
To facilitate this, the Court has established a Contact Committee
comprising representatives of the Member State Supreme Audit Institutions.
There are Supreme Audit Institution Liaison Officers whose role
is to facilitate Court missions in the Member States. However,
this has not resulted in joint, let alone single external audit
because of the many practical, methodological, reporting and political
obstacles in the way. With the adoption of common international
accounting standards which the Court and the Supreme Audit Institutions
support, this may become less of a problem.
122. In line with the proposals for national
Statements of Assurance audited by the Supreme Audit Institution
in each Member State there would be a supervisory role for the
Court in setting down the accounting and auditing standards to
be followed. In this respect the Court would audit the systems
of each Supreme Audit Institution to ensure that the audits they
produced were reliable.
123. We are pleased to see the work the Court
has done to develop its relationships with the Supreme Audit Institutions
in the Member States. We hope that these will be further developed
in the future with a view to giving the Court a supervisory role
over the audits of European expenditure conducted by the Supreme
Audit Institutions in the Member States.
Value for money audit
124. If the Member States are to play a role
in the Statement of Assurance through the eventual adoption of
a national Statement of Assurance process, this may leave scope
for the Court to develop other aspects of its work. Some witnesses
referred to the importance of the Court's special reports which
do look at issues of economy and effectiveness, much as the National
Audit Office does.
In their evidence, the members of the Court also compared it on
a few occasions to the US General Accounting Office (QQ 86, 105).
125. We call upon the Court to bring forward
concrete proposals to extend the aspects of its work which are
not directly concerned with the annual Statement of Assurance.
We consider that developments in the value for money and performance
auditing side of the Court's work would be particularly valuable.
57 European Union Committee,12th Report (2000-01):
The European Court of Auditors: The case for reform (HL
This was also the case in evidence to the Committee's inquiry
into the Court in session 2000-01. European Union Committee, 12th
Report (2000-01): The European Court of Auditors: The case
for reform (HL 63), paragraph 8. Back