Summary
This Report from the National Audit Office
'Financial
Management in the European Union' (HC 401) examines the state of financial
management in the European Union.
The Report looks at the background,
presents key findings in respect of the main expenditure areas, irregularities
and possible fraud, and looks at ways of improving financial management.
The NAO finds that, for 2005, the European Union's expenditure
totalled £71.1bn with a revenue of £72.3bn, and that the UK's net
contribution came to £2.5bn, comprising payments of £8.3bn and an abatement
of £3.5bn.
The Report also looks at issues raised by the European Court
of Auditors which, in October 2006, noted some errors in relation to balance
sheet items, leading to the Court not issuing a Statement of Assurance. A
Statement of Assurance, when issued, confirms the legality and regularity of
the European Community's expenditure.
The NAO finds that, in the view of
the European Court of Auditors, financial management has been strengthened and
consolidated. Further anti-fraud measures, as introduced by OLAF (the European
Union's Anti-Fraud Office) have also been strengthened, and that European Union
expenditure was not subject to excessive fraud.
The NAO sees these
successes as linked to the implementation of the European Commission's measures
to simplify the rules and regulations governing European Union programmes (for
more information, please see
'Financial
management of the European Union' HC 498 2004-05).
The Court of
Auditor's also noted some weaknesses in the UK's management and control of
structural measures programmes, and the NAO states that relevant UK authorities
should ensure their risk management arrangements focus on the need for proper
control and management of European Union funds.
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