WRITTEN QUESTION E-1618/02 by Gabriele Stauner (PPE-DE) to the Commission. Shortcomings in the Commission's accounting system.
Date: 2002-06-06
Institutions: European Parliament, Provisional data
Subjects: European Commission, accounting system, administration of the Institutions, audit, budgetary control, data protection, financial regulation, interinstitutional relations (EU), management accounting, research expenditure (EU)

12.6.2003

EN

Official Journal of the European Union

C 137 E/13

(2003/C 137 E/014)

WRITTEN QUESTION E-1598/02

by Helena Torres Marques (PSE) to the Commission

Subject: Levies on the purchase of motor vehicles

(5 June 2002)

The application of the new regulation on the distribution of motor vehicles and the resulting increase in
competition should lead to a reduction in the price of new cars and a more diversified range of vehicles.
Since in a number of countries, especially Portugal, those working in the sector are forecasting price rises
of up to 25 %, can the Commission say what taxes are levied on the purchase of new motor vehicles in
each of the EU countries?

Answer given by Mr Bolkestein on behalf of the Commission

(30 July 2002)

The Commission informs the Honourable Member of the current rates of taxes applied to new cars in the
Union. The source is a study undertaken by COWI Consulting Engineers and Planners SA in November
2001. This study is available under the website address: http://europa.eu.int/comm/taxation_customs/
taxation/car_taxes/co2_cars_study_25-02-2002.pdf

Furthermore, three tables on the various taxes levied on the purchase of new cars in each of the Member
States is sent direct to the Honourable Member and to Parliament’s secretariat.

(2003/C 137 E/015)

WRITTEN QUESTION E-1618/02

by Gabriele Stauner (PPE-DE) to the Commission

Subject: Shortcomings in the Commission’s accounting system

(6 June 2002)

At the end of May, the Commission removed its new Accounting Officer from her post after not even five
months in office. She was demoted because she had dared to criticise the changes to the Financial
Regulation currently being made by the Commission and to point out that they would increase the risk of
fraud and irregularities.

The Accounting Officer had also drawn attention to the shortcomings and risks associated with Sincom2,
the Commission’s present accounting system. Although the Commission has apparently been aware of
these problems for some years now, no start on any changes thereto has been made.

With regard to Sincom2, can the Commission confirm that:

1. After migration to this system, information was lost with the result that, in the research sector, for
it is, in many cases, no longer possible to find out exactly how much the Commission

example,
disbursed on particular projects?

2. The system is so insecure that data from financial years in respect of which the accounts have already
been closed can be manipulated at a later date, for example in order to cover up mistakes and
inconsistencies?

3. The Commissioner with special responsibility for the budget has deliberately delayed an audit of the

accounting system by the Commission’s Internal Audit Service?

Can the Commission state whether the Director-General responsible for the budget has correctly described
the problems and risks associated with Sincom2 in the annual Statement of Assurance for his Directorate-
General and, if this is the case, provide me with a copy of the passages concerned?

C 137 E/14

Official Journal of the European Union

EN

12.6.2003

Answer giving by Mrs Schreyer on behalf of the Commission

(23 September 2002)

The Commission welcomes the adoption by the Council of the recast Financial Regulation on 25 June
2002 after the Parliament and the Court of Auditors had provided helpful amendments.

The Budgetary Control Committee of the European Parliament included the matter on its agenda on twelve
occasions and the Budgets Committee of the Parliament deliberated on the matter at fifteen meetings.
Parliament’s plenary considered and voted on three occasions. The position of Parliament is documented in
the Minutes of the Sittings of 31 May 2001, 29 November 2001 and 12 June 2002.

The recast Financial Regulation forms the cornerstone for improved financial management in the European
institutions, setting out clearly the budget principles, the rules on implementation and attributing clear
lines of responsibility for financial actors, including the accounting officer. Title VII sets out the rules for
the presentation of the accounts and accounting and is based on modern practice. It is requiring the
Commission to reform its accounting system once more, which it is currently doing.

1.
The Commission changed its accounting system in 1997 for the Joint Research Centre (JRC), and in
1998 for the remaining part of the research sector. Only the operations not yet closed were transferred to
the new accounting system.

Nevertheless, to avoid the loss of financial data, the following actions were taken:

(cid:1) the historical data for the research sector (except the Joint Research Centre), i.e. all the payments
into the Datawarehouse of Sincom 2 (the new

realised for each commitment, have been put
accounting system). The historical data may be consulted using this database.

(cid:1) as for the Joint Research Centre, historical data have not been completely integrated into the
Datawarehouse of Sincom2. Only the required data for the establishment of the financial statements
have been transferred. Nevertheless, all the historical data were copied in a database (DATA POOL),
and are thus available for consultation.

Consequently, all the payments made for each commitment can be known through these databases.

2. With regard to the security of the system, the Commission points out that security exists within the
system to ensure that data from closed financial years cannot be manipulated at a later date. Access to
closed financial years is blocked.

If a final version of the financial situation has to be established in order to take into consideration (non-
budgetary)
information on financial data only known after the closure, the accountant registers the
necessary accounting entries in the accounting system. This guarantees the exhaustiveness of the accounts,
foreseen in the accounting standards and required by the Court of Auditors.

3.
The Internal Audit Service (IAS) prepared a draft work plan which proposed an audit with the aim of
obtaining an overview of the functional effectiveness of Sincom and local systems. The APC (Audit
Progress Committee) pointed out during its meeting in December 2000 that there was a risk of overlap
with audits planned or ongoing by the Court of Auditors. In its up-dated work plan the IAS proposed that
the audit of Sincom and the linked local information technology (IT) systems might reasonably form part
of the up-coming management and control systems review stipulated in Action 87 (phase 2) of the Reform
White Paper. The IAS started a separate audit of the accounting practices and procedures in April 2001.
The forward audit plan of the IAS for 2002 included an audit of the Sincom2 computerised financial
management and accounting system. The start of the audit was announced by the IAS in a letter to
Directors General and heads of service in March 2002 and it has now started.

4.
The Commission’s central financial management and accounting needs are provided for by a central
computer application SINCOM 2. This was introduced for the first time in 1997 and extended to all
Commission services in 1999. Work is ongoing to identify and address problems, which occur.
The problems are also addressed in the DG Budget working paper of June 2001, which is published on
the DG Budget website.

12.6.2003

EN

Official Journal of the European Union

C 137 E/15

This working paper was the basis for the expected work of the new accounting officer to prepare for
March 2002 a memorandum to the Commission on the modernisation of the accounting system. As the
accounting officer prepared no adequate document at that time, the memorandum was postponed to the
end of July 2002.

The Director General of DG Budget has reflected the problems and risks associated with Sincom2
in his annual Statement of Assurance. This declaration included a reservation concerning Sincom2.
The individual annual activity reports of the Commission Directorates General, along with a summary
report, will be sent by the Commission to the other Institutions.

(2003/C 137 E/016)

WRITTEN QUESTION E-1622/02

by Glenys Kinnock (PSE) to the Commission

(6 June 2002)

Subject: WTO Round

Does the Commission agree with a comment made by senior WTO negotiators in Geneva that in the light
of US steel tariffs and new farm subsidies, the ‘chance of meeting the 2004 target for completing the
round hasn’t a snowball’s chance in hell of being met’?

Answer given by Mr Lamy on behalf of the Commission

(17 July 2002)

The Commission considers that the conclusion of the Doha Development Negotiations by the end of 2004
continues to be feasible. The main ingredient for respecting the deadline is political will.

The impact of the United States (US) steel tariffs and the US Farm Bill is ambivalent in this respect. On the
one hand, any sign of protectionism from a major World Trade Organisation (WTO) member at a time
where all WTO members have pledged to further trade liberalisation in Doha risks sowing doubt among
partners about that member’s willingness to engage in real negotiations on some areas. Equally, the
adoption of new farm subsidies will contribute to complicate the negotiations in the WTO on agriculture,
since it reverses the international trend of reducing trade distorting support to agriculture and risks
destabilising world markets.

On the other hand, however, it should be remembered that the DDA (Doha Development Agenda) is
much broader than the steel and agriculture issues. Overall, the stakes of US in these negotiations are too
comprehensive for them to choose not to engage seriously in the negotiations and they therefore also have
a strong interest in them finishing on time. Also, the issues related to the US steel safeguards have shown
to all WTO members that the scope for WTO members taking protectionist, unilateral measures needs to
be curbed further and that the DDA presents the best opportunity to do this.

A number of important WTO members, either in the framework of the Organisation for Economic
Cooperation and Development (OECD) ministerial on 17/18 June 2002 or in the framework of the Asia-
Pacific Economic Cooperation (APEC) trade ministers meeting on 29 May 2002 have reaffirmed their
political will
in Cancun on
10-14 September 2003, to conduct negotiations according to the agreed schedules and to conclude them
by 1 January 2005.

to create the necessary conditions

for a successful 5th Ministerial

For its part, the EU will continue to be proactive in the negotiations in order to allow for a conclusion of
the DDA within the agreed deadline.