WRITTEN QUESTION E-2455/02

by Christopher Heaton-Harris (PPE-DE) to the Commission

(29 August 2002)

Subject: Alleged mismanagement of funds entrusted to the European Communities

Marta Andreasen was Budget Execution Director and Accounting Officer at the European Commission, a very senior post. According to the relevant legislation, she had full responsibility for the funds entrusted to the European Communities. Any allegation made by her of mismanagement is thus extremely serious.

Are there qualified, trained accounting personnel at all levels within the Commission?

What internal accounting control systems exist within the Commission, and are they up to the acceptable standards?

Are Accounting Officers asked to sign off accounts known to be inaccurate?

Was Marta Andreasen pressurised to validate proposals without reservation when the reasons for such reservation were well known?

Is it true that most senior managers know that the figures are inaccurate?

Are accounts handled or signed off by unqualified accounting staff or third parties?

Are Member States' accounts secure?

Will the Commission open up its official accounting books so that her allegations may be verified?

What systems are in place to trace adjustments and changes to figures presented in accounts?

Did the Commission seek legal advice on whether it had the right to prevent Marta Andreasen from appearing before the European Parliament's Committee on Petitions?

If so, why? What harm did and does does the Commission believe would result from her appearing before a parliamentary committee to give evidence?

Answer given by Ms Schreyer on behalf of the Commission

(22 November 2002)

1. and 6. All staff in Directorate-General (DG) Budget (BUDG) who have tasks involving accounting are qualified for the purpose, whether by formal qualification, by experience or by in-house training, or a combination of these.

The heads of unit in the Accounting Department all have formal qualifications and/or experience in accountancy or economics.

The newly appointed Accounting Officer of the Commission was selected for his qualifications and experience in accounting, audit and financial management.

2. Concerning the accounting system, the following control aspects are at present in place(1):

- there is a strict separation of functions and responsibilities between authorising officers, people effecting internal control and the Accounting Officer;

- the authority to use voted appropriations for commitments or payments is the subject of formal approval procedures and is strictly regulated by sub-delegations within the accounting system; the delegated authorising officers and their staff can only use specific budget lines for which they have authority within the system and this access is controlled by the system;

- bank details for each recipient of Commission funds are validated against proof provided by the relevant bank before a payment can be executed;

- the availability of appropriations is verified for every transaction which consumes them; there are controls to ensure that the budget cannot be exceeded and that amounts committed cannot be exceeded;

- the validity of the discharge is given for each payment;

- the reconciliation between accounting entries and bank movements is carried out on a daily basis;

- payments leave the Commission via the SWIFT network; the Commission is connected to the SWIFT network for security and efficiency reasons, and is one of the few non-bank clients; all actions after the payment instruction has left the Commission (changes to bank accounts, etc.) function in the same way as in inter-bank relations all over the word;

- the accounting officer controls accounting entries and accounting balances.

3. There is no question of closing incorrect accounts. Article 18 of the Regulation laying down detailed rules for the implementation of the Financial Regulation(2) provides that the accounting officer shall keep the accounts, which he/she shall close at the end of the year, and prepare the financial statements, including, as the case may be, interim accounts which shall be signed by both the outgoing and the new accounting officer. The Accounting Officer's Charter contains similar provisions.

Should the accounting officer have reservations, he/she shall sign the accounts and indicate those reservations.

In the absence of any explicit provision covering the case where an (outgoing) accounting officer refused to sign the accounts, one has to look to the intent behind the above provisions, which is unmistakably to secure continuity in the public service, which is a recognised principle of administrative law.

4. The Commission knows of no indication that Ms Andreasen was put under pressure by anyone to sign without reserve anything for which she had substantiated reservations.

5. The cash-based accounts are accurate. No Directorate-General or service is contesting the accuracy of the accounts.

All the questions and comments made by Directors-Generals and heads of service about the presentation of the figures for each Directorate-General as at 31 December 2001 were taken up, resolved or dealt with, after any necessary clarification, by July 2002.

It is intended to make further improvements in the way that the annual figures are presented to the Directorates-General, in the light of the experience gained.

Only the Accounting Officer himself/herself signs off the annual accounts, before they are sent (via the Director-General of DG Budget) to the Member of the Commission responsible for Budgets, who formally approves the accounts by the empowerment procedure. The accounts are subsequently transmitted to the Court of Auditors, the Council and the Parliament.

7. The Commission is not in a position to issue an opinion on the overall quality of Member States' public accounts.

8. In accordance with the Financial Regulation, the official accounting books of the Commission have been always fully accessible to the internal and external audit bodies. They both have access to the official accounting system.

Moreover, the detailed annual accounts of the Commission, which reflect the accounting books, are sent as the Honourable Member may be aware to the Parliament and Council, to the Court of Auditors and to the other institutions.

The consolidated annual accounts of the European Communities are also provided to those bodies and are published in the Official Journal of the European Communities.

9. Adjustments or changes to transactions can only be made by authorised staff. Access to data is strictly controlled. The history of each transaction is available in the system, including a complete list of all the approvals given and changes made back to the origin of the transaction. There is also a reference to the physical location of the documents underlying the transaction.

The Court of Auditors has criticised access by system technicians. Improvements have been made and are still on-going.

In the limited and decreasing number of cases where technical adjustments to the system are necessary (for example, to eliminate computer programme bugs), the justification for any such measure is assessed before being approved and the changes made are documented. In the very rare cases where a bug causes an error in a transaction, the incorrect data are replaced by the correct data. Again, these cases are fully analysed and approved before action is taken and all action is documented.

10. and 11. The Commission consulted its Legal Service on the statutory conditions pertaining to a possible attendance. It is normal practice to do this. The Commission does not normally discuss in public purely internal matters of this kind.

Statutory obligations of discretion, whose legitimacy has been constantly upheld by the Court of Justice, and the fact that disciplinary proceedings were in progress raised obvious questions of confidentiality.

(1) Most of these controls have always been carried out and are provided for by the Financial Regulation, OJ L 240, 7.10.1995.

(2) http://www.cc.cec/budg/lex/fr/droit/mod_exec/index.htm.