MODERNISING THE EUROPEAN COMMISSIONS ACCOUNTING
SYSTEM (11399/06)
Letter from the Chairman to Ed Balls MP,
Economic Secretary, HM Treasury
Thank you very much for your Explanatory Memorandum
11399/06. This was considered by Sub-Committee A at their meeting
on 17 October. The Sub-Committee have decided to hold the document
under scrutiny until their inquiry into European financial management
is debated on the floor of the House.
We were particularly interested to see that
you are "hopeful" that the transition to full accruals
accounting will lead to an unqualified Statement of Assurance
from the European Court of Auditors in their next annual report
(paragraph 19 of your Explanatory Memorandum). While we agree
that the transition to accruals accounting is indeed an important
aspect of proper financial management we consider that there are
many other obstacles to an unqualified Statement of Assurance
which also need to be addressed. Do you agree?
16 November 2006
Letter from Ed Balls MP to the Chairman
Thank you for your letter of 16 November 2006.
I am responding to Sub-Committee A's comments
when they considered this document at their meeting on 17 October
2006.
As you know, the annual Statement of Assurance
on the EU budget, required under Article 248(1) of the Treaty
to be provided annually by the European Court of Auditors (ECA),
is in two parts: it covers the reliability of the accounts; and
the legality and regularity of the underlying transactions. I
am indeed hopeful that the Commission's move to full accruals
accounting in 2005 will, in due course, allow the ECA to give
an unqualified opinion on the reliability of the accounts. However,
I agree with you that there are still many other obstacles to
be overcome before the ECA can give an unqualified assurance on
the legality and regularity of the underlying transactions.
I welcome the recent report from Sub-Committee
A on these issues ("Financial Management and Fraud in the
European Union").[9]
In response to the report, I gave a Statement to the House of
Commons on 20 November (Official Report, 13WS), and I will respond
to the recommendations in more detail later.
24 November 2006
9 50th Report of Session 2005-06, HL Paper 270-I. Back
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