Opinion No 9/2002

concerning the financing of the common agricultural policy

(pursuant to the second subparagraph of Article 248(4) of the EC Treaty)

(2002/C 285/01)

EXPLANATORY MEMORANDUM

Under the procedure for clearing the accounts of the European Agricultural Guidance and Guarantee Fund, the Commission decides whether expenditure by the Member States' paying agencies to carry out the common agricultural policy is in conformity with the relevant regulations and can be definitively charged to the Community budget or should be disallowed.

At the moment disallowance is only permitted in respect of expenditure taking place in the 24 months before the Commission notifies a Member State that expenditure appears to have been irregularly incurred. The Court has criticised the two-year time limit as unrealistically short (for example the Commission's clearance of accounts unit examines all expenditure on a three-year cycle).

The Commission proposes to extend the retrospective time limit from two to three years. The attached Opinion supports this proposal and suggests no amendments.

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community and in particular Articles 248(4) and 279 thereof,

Having regard to the Financial Regulation applicable to the general budget of the European Communities(1), as amended by Council Regulation (EC, ECSC, Euratom) No 2673/1999 of 13 December 1999(2), and in particular Articles 4, 19(6) and 102(3) thereof,

Having regard to the proposal for a Council Regulation amending Council Regulation (EC) No 1258/1999 on the financing of the common agricultural policy(3),

Having regard to the Commission's request, dated 11 June 2002 for the Court of Auditors' opinion on this proposal,

HAS ADOPTED THE FOLLOWING OPINION:

The Court of Auditors welcomes the Commission's proposal to amend the Council Regulation on the financing of the common agricultural policy in order to extend the maximum period to which a correction to expenditure may be applied from 24 months to 36 months preceding the Commission's written notification of the results of its checks to the Member State concerned.

In its Special Report No 22/2000 on evaluation of the reformed clearance of accounts procedure(4) (see paragraph 89), the Court has pointed out the negative effect of the 24 month rule on the total amount of corrections made.

This modification will reduce the risk that weaknesses detected in Member States' systems may not be penalised simply because the Commission has not been able to cover all areas of expenditure within a two-year cycle. Indeed, the 36-month limit is more closely in line with the Commission's current capacity to check all expenditure on a cyclical basis.

It remains important for the Commission to ensure that it communicates its findings to the Member States in a timely manner, unfortunately this has not always been the case (see Annual Report concerning the financial year 2000, paragraph 2.58(5)).

The Court has no proposals to amend the Commission's text. The annexed table shows the change proposed by the Commission and the reason for the Court's endorsement.

This Opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 25 and 26 September 2002.

For the Court of Auditors

Juan Manuel Fabra Vallés

President

(1) OJ L 356, 31.12.1977, p. 1.

(2) OJ L 326, 18.12.1999, p. 1.

(3) Commission Document reference 2002/0125 (CNS) - COM(2002) 293 final.

(4) OJ C 69, 2.3.2001, p. 23.

(5) OJ C 359, 15.12.2001, p. 77.

ANNEX

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