Fundamental reform of the EU's system of senior staff appointments is urgently needed, the Irish member of the European Court of Auditors, Mr Barry Desmond, said this weekend.
Speaking ahead of the publication today of the court's annual report, Mr Desmond, who retires in February, said that the 350 senior management staff in the commission are appointed through a system "which in my opinion seriously lacks transparency and is often far removed from appointments based on real merit". The result is, he says, that "those in the middle grades have a major disincentive to question the actions of their superior", and he calls for top appointments to be time-limited and made by an independent board. Mr Desmond also calls for a shake-up of the EU's financial regulations and management control and audit systems.
Mr Desmond also criticises the failure of CAP reform to deal with agricultural pollution. "Today we pay the polluter not to pollute," he says. "We must implement the `polluter pays' principle as a matter of utmost urgency."
On institutional reform Mr Desmond is largely singing from the same hymn sheet as the new commission, which last week issued a pre-emptive response to leaks of the court's report, pointing out that the failures were attributable to the ancien regime and pledging root and branch reform.
In its key "statement of assurance" on the EU accounts, the court's verdict today is the same as that for the last four years and it again refuses to certify the overall legality of the commission's payments during 1998. Once again the court estimates that up to 5 per cent of the Union's spending, worth some €4 billion, is improper, although the bulk of the figure reflects errors in monitoring, accounting or procedures rather than fraud.
Member-states are ticked off for using funds for ineligible structural fund projects, not backing up expenditure with sufficient documentation, and allowing improper tendering and state aid practices. In research funding administered directly by the commission, there was "a particularly high incidence of errors" resulting from the overstatement by contractors of overhead costs.
In the latter case, the court records that "out of the payments audited half were affected by errors. Substantive errors were detected in approximately one-third of payments, in most cases of which the commission had paid too much due to ineligible costs having been claimed by the beneficiaries."
Farm spending gets a relatively clean report, although the court notes that there are still problems with overdeclarations of land eligible for arable aid.
In its response to the court, the commission notes that, in the agricultural area alone, attempts to recoup improper spending saw €655 million recovered, and reductions in spending commitments, in effect fines, of €300 million. Expenditure for 1998 totalled €80.7 billion, up 5 per cent on 1997. On the expenditure side, agriculture took up €39 billion (48 per cent), with structural measures taking €28 billion. Internal policies, ranging from research to education and training, environment, and trans-European networks absorbed some €5 billion; external action, from aid to the Mediterranean and central and Eastern Europe to foreign and security policy, €4 billion.
Administration took up €4.2 billion, of which the Parliament took €862 million, the commission €2.8 billion, the Council of Ministers €303 million, the Court of Justice €118 million and the Court of Auditors €57 million. The largely moribund Economic and Social Committee and Committee of the Regions cost €88 million and €1.4 billion was spent in development aid to the Lome countries by the Union (accounted for separately).
Parliamentary hearings on the new Court of Auditors take place take week when Mrs Maire Geoghegan-Quinn will face the Budget Control Committee.