WRITTEN QUESTION E-3012/02

by Eluned Morgan (PSE) to the Commission

(23 October 2002)

Subject: Accounting for CAP

Whilst there is a system of shared responsibility between the Commission and Member States, will it always be impossible to develop a proper system of accountancy and accountability? Is it possible to say in relation to the CAP where EU funding is at any time?

Answer given by Mr Fischler on behalf of the Commission

(28 November 2002)

The method to implement the budget by means of shared responsibility between the Commission and the Member State is explicitly foreseen in the current and the new Financial Regulation(1). In this case, implementation operations are entrusted to Member States and the

Commission may delegate measures of budget implementation to executive agencies, which are defined in such a way that the Commission retains control on implementation and can monitor their operation. The Commission shall apply clearance of accounts procedures and appropriate financial correction mechanisms in order to ensure that the funds are used in accordance with the applicable financial rules.

The Common agricultural policy (CAP) spending under the European Agriculture Guidance and Guarantee Fund (EAGGF) Guarantee Section are, therefore, executed under the full respect of the provision as laid down in the Financial Regulation including the aspects of accountancy and accountability.

A reform of the Commission's clearance of account procedure related to EAGGF Guarantee was introduced in 1996.

The main features of this reformed system are the accreditation of paying agencies by the Member States and an annual certification of their accounts by a body appointed by the Member States resulting in a financial clearance decision taken in April of the following year. The certificate must state whether the Certifying Body has gained reasonable assurance that the paying agency's accounts are true, complete and accurate. Compliance of payments with Community rules is only covered as regards the capability of the paying agency's administrative structure to ensure that such compliance has been checked before a payment is made. Corrections based upon the Commission's own examination of compliance aspects are included in later conformity decisions. Member States have the opportunity to contest the corrections proposed by the Commission before the Conciliation Body and, whether or not they choose to do so, have the right to appeal to the European Court of Justice.

In it's report of 30 November 2000, the Court of auditors concluded that the accreditation and certification requirements have greatly improved Member States accountability for EAGGF funds although there is scope for improvements on both fronts.

As regards budget execution, the Commission provides to the Budgetary Authorities a monthly financial reporting known as the Early Warning System. This report contains a detailed analysis of the expenditure declared by Members States against the expected profile. In addition, the system of accounting provides an annual budget nomenclature, which covers approximately 2000 separate budget lines and allows the identification of aggregated monthly payments made to Member States at any moment within the monthly intervals.

(1) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the Communities, OJ L 248, 16.9.2002.