Brussels brings the Commission to account

BRUSSELS Branch recently gave journalists what they really, really want: news. We organised a press conference - with the help of the IFJ - for Marta Andreasen, the former European Commission chief accountant at the centre of the current financial accountability scandal involving that August institution, which is the EU's Civil Service.

Notices of the press conference were sent out electronically 36 hours before the briefing, in order to forestall any Commission attempt to block Ms Andreasen from speaking. (A registered letter did arrive - the day after the press conference.)

To a packed briefing room, Andreasen explained on 18 September her concerns about financial accountability or lack of it within the European Commission. Among her key points:

  • The Commission does not have a secure or a coherent accounting system that supports the annual accounts; neither does the system allow traceability.
  • The system lacks compliance with basic accounting principles such as double-entry book keeping. Double-entry is the most basic of accounting methods, in use since the 13th century. It allows checks on where each transaction came from and where it went.
  • There has not been a treasury audit for the last ten years, whilst the same treasurer has been in the post for more than twelve years.
  • The Commission is unable to establish cash-flow statements, a basic element for the management of the 98 billion Euros entrusted to it.
  • A new financial regulatory system is due to be implemented at the beginning of 2003, yet the Commission only promises to have an accounting system to support it by 2005. In the meantime the chief accountant will, Andreasen said, have to make payments without seeing the corresponding documentation, like invoices or contracts.

Andreasen noted that her reward for refusing to certify the accounts, and for bringing these problems to the attention of the European Court of Auditors and the European Parliament, was suspension from her job and disciplinary procedures against her.

Remarking that the Chief Financial Officer and Controller of WorldCom had been imprisoned for presenting unreliable accounts and concealing information from auditors, she said, "EU taxpayers deserve an honest, transparent system of accounting that can protect their interests. At the moment there is no such protection for them - not even basic rules such as those that exposed the Worldcom and Enron frauds.

"Some may see this as a conspiracy. If so it is a conspiracy based on incompetence and defence of political interests rather than bringing about much-needed reform to the EU's financial administration."

  • Key points in the Commission's response to Marta Andreasen's remarks are:

    "The Commission's accounting framework and its accounting system were developed at a time when cash accounting was in general use across the public sector, and mainly served the purpose of budgetary accounting....

    "The European Commission has made it clear since long before Mrs Andreasen's appointment that its accounting system, which does not correspond to the internationally recognised standards, needs to be modernised and reformed.... The Directorate General for Budget launched the relevant preparatory steps in 2000."

    Wildly condensing the other 20 pages: they replaced their computer software package just in time to avoid the Year 2000 bug; the replacement is... less than ideal; and replacing the replacement is a big job. So there was a Y2K problem!

Last modified: 14 October 2002 - © 2002 contributors
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