WRITTEN QUESTION E-2558/02 by Erik Meijer (GUE/NGL) to the Commission. Financial control 2: opposing views on the part of members of the Commission and of the administration.
Date: 2002-09-13
Institutions: European Parliament, Provisional data
Subjects: European Commission, European accounting system, European official, administration of the Institutions, administrative sanction, financial control, financial regulation, fraud against the EU, image, interinstitutional relations (EU)

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The Union adopts a similar approach for other countries which impose cruel and inhuman sentences such
as stoning. In the case of Iran, Amnesty International has reported the execution of at least 139 people in
2001 with two women reported as stoned to death. The Union tabled a resolution at the 56th United
Nations General Assembly which, inter alia, deplored the use of such executions and the issue is raised in
dialogue with the Iranian authorities. Iran is not at this stage subject to any project programming by the
Commission, which, however, over the years has financed a limited number of activities in sectors such as
drugs and refugees.

The Commission is not in a position to provide detailed information on countries practising sharia and the
precise number of stonings in each such country.

All Community agreements with third countries include a clause stipulating that respect for human rights
is an essential element of the agreement.
its human rights
obligations, suspension of the Agreement is possible. However, suspending aid to a country would
normally be more detrimental to the poorer sections of society and would decrease our possibility to exert
pressure in cases such as these. It is therefore a measure of last resort.

In the event that a party fails to fulfil

(1) Available at www.europa.eu.int/comm/external_relations/human_rights.

(2004/C 33 E/010)

WRITTEN QUESTION E-2558/02

by Erik Meijer (GUE/NGL) to the Commission

(13 September 2002)

Subject: Financial control 2: opposing views on the part of members of the Commission and of the

administration

1. Why did the Commission take the risk, despite the damage this was likely to cause (see previous
series of questions), of further alienating public opinion by removing the former head of the accountancy
service Marta Andreasen from office in May 2002, after she warned, first internally and later publicly,
about the Commission’s poor internal controls?

2.
Does the Commission recall that this is not the first time that an official has been removed from
office for voicing criticism in this way? What lessons has it learned from the earlier case of dismissal (Paul
van Buitenen, 1999)?

3.
Is the Commission surprised that the criticisms made by Mrs Andreasen were later confirmed by
Jules Muis, head of the internal audit service, as well as by the European Court of Auditors, which,
according to a report in the Financial Times, considers that the Commission’s accounting systems are
unreliable and insecure and fail to take account of generally accepted accounting standards or to use
double-entry bookkeeping methods which,
facilitate control of revenues and
expenditure?

in comparable cases,

Have the documents prepared by the Court of Auditors and by Mr Muis been made public, so as to

4.
enable anyone wishing to do so to verify the criticisms leaked by the press? If not, why not?

5. Why, following a statement by Mrs Andreasen in London on 1 August 2002 claiming that the EU
budget was highly susceptible to fraud, that the system was worse than that of the collapsed American
companies Enron and WorldCom, that there was no means of verifying figures and that fraud could be
concealed in the system without anyone seeing or detecting it, did Commissioner Schreyer help further
discredit the way in which the EU operates by responding that the report by the Court of Auditors would
not be published because it contained errors and because the tenor of the report was inaccurate and that
Mrs Andreasen should never have been recruited?

6.
Does the Commission consider (cid:1) not only in this case but also in other cases (cid:1) that it is an
appropriate and effective administrative response to brand conflicting opinions ‘inaccurate’ and to use this
description as an argument for excluding them from the debate, or is it willing from now on to abandon
such an approach?

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6.2.2004

Answer given by Mrs Schreyer on behalf of the Commission

(15 January 2003)

The Commission refers to its reply to Written Question E-2557/02 by the Honourable Member (1).

1.
It refrains from commenting on individual cases which are under investigation.

The Commission started an important and extensive administrative reform already in the year 2000. Many
measures in the White Paper ‘Reforming the Commission’ (2), adopted by the Commission on 1 March
2000, are specifically dedicated to enhancing internal control and audit and the accountability of officials,
to creating an internal audit service and a central
financial service, and to strengthening Financial
management and control within the Directorates-General. The Commission has proposed a new Financial
Regulation and it is pleased that this change supported by the Parliament has been decided by the Council.
This modernisation was already foreseen in the Commission’s working document from June 2001, which
was the basis for recruiting the Accounting Officer in January 2002.

In order to fulfil an obvious need for clear and precise rules on how to report concerns about serious
2.
wrongdoings, a strong regime was introduced in 1999, which imposes a duty on officials to report serious
irregularities. This regime provides for a number of safe and effective reporting channels for officials to
raise their concerns, and offers protection to officials who do so in good faith.
In 2002, new
whistleblowing rules were introduced which further strengthen and extend this regime. As the Honourable
Member will no doubt be aware, these new rules were applied in relation to Mr Van Buitenen, with his
agreement, in anticipation of their actual adoption.

The Commission would point out that these provisions are concerned with disclosures of information
about fraud, corruption and other comparable serious wrongdoing. They do not extend to disagreements
about lawful policies. The Honourable Member will also know that Mrs Marta Andreasen has claimed that
the Commissioner responsible for the Budget was promoting a Financial Regulation which would increase
the risk of fraud. The new version of the Financial Regulation was not only welcomed by the European
Court of Auditors but was supported by the Parliament and unanimously adopted by the Council.
Therefore, the claims made by Mrs Andreasen are not only against the Commission; they are also against
the European Court of Auditors, the Parliament, the Council and the 15 Member States.

3.
For the 2001 financial year, the Court, as for earlier financial years, stated that the annual accounts
faithfully reflect the Commission revenue and expenditure for the year and their financial position at the
year-end. However,
the
Commission respects the standards of the Financial Regulation and of budgetary accounts on a cash basis.
On the general accounts the Honourable Member will know that there are different standard ways of
presenting them. The Commission will observe the new Financial Regulation and its standards based on
accrual accounting. These rules will be binding as of 2005.

it made four reserves concerning the general accounts. The accounting of

On the subject of its accounting methods, the Commission would also refer to its recent reply to Written
Question E-2455/02 by Mr Heaton-Harris (3). In a recent article, which the Commission will send direct to
the Honourable Member and to Parliament’s Secretariat, Professor Vicente Montesinos (4) acknowledges the
progress that has already been made under the reform programme and concludes that the situation is
comparable to that in most European public administrations.

Furthermore the recasting of the Financial Regulation (5), as a result of the Commission’s own proposal
made in 2000, already contains those rules whose introduction is being called for, namely integrated
principles of accrual accounting.

4.
The letter of the Commission’s Internal Auditor to which the Honourable Member refers was based
on preliminary findings of an on-going audit and, as such, it should not have been circulated outside the
Institution. Neither the Financial Regulation nor the relevant professional standards for internal auditing
provide that preliminary results of ongoing internal audit work are shared outside the Institution. This is to
protect the relationship between internal auditor and auditee, which is key to an effective internal audit
function.

However, based on the provisions of the Financial Regulation the Parliament receives regularly reports by
the Internal Auditor, which summarise audit findings, recommendations and follow-up.

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The internal note referred to by the Honourable Member was also preparatory to the establishment of the
Annual Activity Report and Declaration of the Director General for Budgets. The Annual Reports of the
Director General, the Synthesis report and the IAS Annual activity Report have been submitted to
Parliament.

The question to the Court is not in the competence of the Commission.

5.
There is no basis for comparison between cases such as those of Enron or Worldcom and the
Commission’s accounts. Enron and Worldcom cases involved alleged deliberate concealment of debts with
the aim of hiding the true financial position of the companies, influencing the stock market and assuring
bonuses for senior managers. Conversely, the Commission accounts have been consistently certified by the
Court of Auditors to reflect faithfully the reality of revenue and payments, as required by the Financial
Regulation. Such actions as were allegedly perpetrated on the accounts of Enron and Worldcom are not
possible in a cash accounting environment as that of the Communities.

The Commission has recognised the criticisms which have been made of its accounting system over

6.
the past years by the Court of Auditors, and has taken corrective action.

Apart from certain specific actions foreseen in the White Paper on Reform, and its proposals for the recast
of the Financial Regulation as referred to above:

(cid:1) Following a call for tenders, a study on the accounting system was delivered mid 2000 by a high level

expert on public accounting (Professor Montesinos from Valencia University).

(cid:1) In 2000, the Commission adopted a Reform White Paper which covered amongst other things, the
recast of the Financial Regulation, and foresaw measures concerning the role of the accountant. Many
of the reform acts has been implemented already.

(cid:1) In June 2001, following the above-mentioned study, the Commission drafted an action plan for
modernisation which was subsequently discussed with the Court of Auditors. Modernisation of its
accounting systems has continued.

(cid:1) On 25th June 2002 the Council adopted the recast Financial Regulation which requires by 2005 an

integrated accrual accounting system as proposed by the Commission.

(cid:1) On 24 July 2002 the Commission presented a memorandum on the reform of the accounting

framework and system.

This shows,
the Commission listens to well-founded critical comments, and is open to implement
recommendations in its ongoing reform process. The Commission has not only the right but also the duty
to defend itself against untrue claims.

(1) OJ C 242 E, 9.10.2003, p. 25.
(2) COM(2000) 200 final.
(3) OJ C 161 E, 10.7.2003, p. 22.
(4) Secretary-General of the European Organisation of Regional Audit Institutions (Eurorai).
(5) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the

general budget of the European Communities, OJ L 248, 16.9.2002.

(2004/C 33 E/011)

WRITTEN QUESTION E-2750/02

by María Izquierdo Rojo (PSE) to the Commission

Subject: Rape of Pakistani teacher Mukhtar Mai and tribal law

(1 October 2002)

In June 2002, Pakistani schoolteacher Mukhtar Mai was gang-raped by four men by order of a people’s
court or ‘panchayat’ in the southern Punjab. Mai was punished because her twelve-year-old brother had
had relations with a young woman from a higher caste. She was found guilty on the basis of the ‘laws of