Summary
European Union (EU) expenditure in 2006 was over £72 billion, with £2.9 billion in net UK contributions – the second highest after Germany.
This National Audit Office Report, 'Financial Management in the European Union' (HC 480), examines the state of financial management in the EU.
The Report summarises the results of the European Court of Auditor's examination of the EU’s accounts and progress on the range of initiatives being taken forward by the European Commission and Member States.
The Report is divided into three parts:
- Part One examines the EU budget and the opinion of the European Court of Auditors on the 2006 financial year.
- Part Two outlines performance on the main expenditure areas.
- Part Three reviews developments in financial management and accountability.
The European Commission and Member States have made progress in strengthening the financial management of EU funds however, for the thirteenth year in succession, the European Court of Auditors did not provide a positive statement of assurance on the legality and regularity of most EU expenditure.
In the Common Agricultural Policy - which represents the largest expenditure component - the Court noted a marked reduction in the overall error. Despite problems with its implementation in the UK, there are indications that the introduction of the Single Payments Scheme and the continued application of the Integrated Administration and Control System have helped achieve a lower error rate.
Achieving a positive Statement of Assurance in funding for Structural Measures - which are designed to reduce disparities in the level of development between regions and Member States - remains the most challenging component of the budget.
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