European Court of Auditors
The
European Court of Auditors is one of
five institutions of the
European Union. Its "mission is to audit independently the collection and spending of European Union funds and, through this, assess the way that the European institutions discharge these functions".
The Court of Auditors checks that all the Union's revenue has been received and all its expenditure incurred in a lawful and regular manner and that the EU budget has been managed soundly. The Court was established on 22 July 1975 by the
Budgetary Treaty of 1975. The Court started operating as an external Community audit body in October 1977. Since the
Treaty of Maastricht the European Court of Auditors has been recognised as one of the institutions of the European Communities.
The Court has one member from each EU country, appointed by the
Council for a renewable term of six years. Even after
enlargement there will still be one member per EU country but, for the sake of efficiency, the Court can set up "chambers" (with only a few members each) to adopt certain types of report or opinion.
In their countries of origin, the members of the Court have all worked for an auditing institution or are specifically qualified for that work. They are chosen for their competence and independence, and they work full-time for the Court.
The members elect one of their number as President for a term of three years.
The Court's main role is to check that the EU budget is correctly implemented — in other words, that EU income and expenditure is legal and above board and to ensure sound financial management. So its work helps guarantee that the EU system operates efficiently and openly.
To carry out its tasks, the Court investigates the paperwork of any organisation handling EU income or expenditure. If need be, it carries out on-the-spot checks. Its findings are written up in reports which draw the attention of the Commission and the member states to any problems.
To do its job effectively, the Court of Auditors must remain independent of the other institutions but at the same time stay in constant touch with them.
One of its key functions is to help the budgetary authority (the
European Parliament and the Council) by presenting them every year with a report on the previous financial year. The comments it makes in this annual report play a very important role in Parliament's decision whether or not to approve the Commission's handling of the budget. If satisfied, the Court of Auditors also sends the Council and Parliament a statement of assurance that European taxpayers' money has been properly used.
Finally, the Court of Auditors gives an opinion before the EU's financial regulations are adopted. It can comment at any time on specific issues, or it can give an opinion at the request of one of the EU institutions.
The Court of Auditors works independently, and is free to decide how to schedule its auditing activities, how and when to present its observations, and what publicity to give to its reports and opinions.
It has approximately 760 qualified staff, of whom about 250 are auditors. The auditors are divided into "audit groups". They prepare draft reports on which the Court takes decisions.
The auditors frequently go on tours of inspection to the other EU institutions, the member states and any country that receives aid from the EU. Indeed, although the Court's work largely concerns money for which the Commission is responsible, in practice 90% of this income and expenditure is managed by the national authorities.
The Court of Auditors has no legal powers of its own. If auditors discover fraud or irregularities they pass the information as quickly as possible to the EU bodies responsible, so they can take the appropriate action. For eleven years in a row the European Court of auditors has refused to sign off the EU accounts, stating that they cannot verify the location of 65% of EU funds, although independent financial experts place the figure at 93.4%. A large amount of the endemic fraud in the EU comes from CAP with funds disappearing in the Balkans and Russia.The court suggested that EU staff were abusing the disability system on a large scale, costing taxpayers £54 million a year. Half the claimants had psychological or stress-related complaints. A court official said: "These are not coal miners or deep-sea fishermen. It's not normal for so many to retire for ill-health."
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