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EUROPEAN UNION FUNDS OUT OF CONTROL

EUROPEAN UNION FUNDS OUT OF CONTROL. THE BRUGES GROUP CONFERENCE 22 NOVEMBER 2008. CHIEF ACCOUNTING OFFICER: HIGHEST FIDUCIARY RESPONSIBILITY. ACCOUNTS OF EU ASSETS OF EU TREASURY OF EU ACCOUNTING PROCEDURES APPROVAL OF COMPUTER SYSTEM. MY CONCERNS AS EU CHIEF ACCOUNTANT.

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EUROPEAN UNION FUNDS OUT OF CONTROL

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  1. EUROPEAN UNION FUNDS OUT OF CONTROL THE BRUGES GROUP CONFERENCE 22 NOVEMBER 2008

  2. CHIEF ACCOUNTING OFFICER: HIGHEST FIDUCIARY RESPONSIBILITY • ACCOUNTS OF EU • ASSETS OF EU • TREASURY OF EU • ACCOUNTING PROCEDURES • APPROVAL OF COMPUTER SYSTEM

  3. MY CONCERNS AS EU CHIEF ACCOUNTANT • VULNERABILITY OF THE ACCOUNTING SYSTEM: 150 MILLION GONE MISSING WITHOUT REASONABLE EXPLANATION. • LACK OF BASIC INTERNAL CONTROL: WHOM AM I PAYING AND FOR WHAT?

  4. A VULNERABLE SYSTEM= STRUCTURAL FRAUD • INHIBITS FRAUD PREVENTION. • OBSTRUCTS FRAUD DETECTION. • HINDERS FRAUD PROOF.

  5. MY REQUESTS FOR CHANGE • INTEGRATED ACCOUNTING SYSTEM ALLOWING RELIABLE ACCOUNTS • TREASURY AUDIT TO IMPROVE CONTROL ON PAYMENTS

  6. 2007 AUDITOR REPORTTHE PARADOX • UNQUALIFIED OPINION ON THE ACCOUNTS. • ADVERSE OPINION ON THE LEGALITY AND REGULARITY OF THE UNDERLYING TRANSACTIONS (PAYMENTS). • CONCLUSION: THE ACCOUNTS REFLECT RELIABLY THE ILLEGAL AND IRREGULAR PAYMENTS MADE OUT OF THE EU BUDGET.

  7. “UNQUALIFIED???? ACCOUNTS” • THE ACCOUNTS PRESENT FAIRLY THE FINANCIAL POSITION OF THE COMMUNITIES VS • THE WEAKNESSES OF THE ACCOUNTING SYSTEM STILL PUT AT RISK THE QUALITY OF THE FINANCIAL INFORMATION (PRE-FINANCING)

  8. 2007 ANNUAL BUDGET: 114BILL

  9. AGRICULTURE: 51BILL. COHESION: 42 BILL. RESEARCH, ENERGY&TRANSP: 4.5BILL EXTERNAL AID, ENLARGEMENT: 6 BILL. EDUCATION & CITIZENSHIP: 1.5 BILL MATERIAL LEVEL OF ERROR MATERIAL LEVEL OF ERROR MATERIAL LEVEL OF ERROR MATERIAL LEVEL OF ERROR MATERIAL LEVEL OF ERROR 92% OF BUDGET AFFECTED BY MATERIAL LEVEL OF ERROR

  10. WHAT ARE THE ERRORS • INELIGIBLE COSTS • OVERDECLARATION OF MONEY SPENT • PROCUREMENT RULES INFRINGEMENT

  11. IS THIS FRAUD? IS IT ABUSE? • THE AUDITORS ESTABLISH THAT AT LEAST 6 BILL SHOULD NOT HAVE BEEN PAID • THE AUDITORS SAY FRAUD REQUIRES “ CRIMINAL INTENT” • WITHOUT DOUBT: MISAPPROPRIATION OF TAXPAYERS MONEY

  12. BLAME MEMBER COUNTRIES AUDIT SYSTEM TOO RIGID UK BODIES ACCOUNTS NOT CLEARED UNDULY PAID FUNDS ARE RECOVERED IT IS EC RESPONSIBILITY AUDIT SYSTEM USED WORDWIDE WE DO NOT NEED ANOTHER LAYER OF “ERROR” THE AUDITORS STATE THERE IS NO EVIDENCE OF HOW MUCH IS RECOVERED IF ANY. THE ARGUMENTS OVER THE YEARS

  13. STRUCTURAL FRAUD: WHO IS RESPONSIBLE? • THE EUROPEAN COMMISSION: FAILS TO IMPLEMENT NECESSARY INTERNAL CONTROL & RELIABLE ACCOUNTING SYSTEM. • THE EUROPEAN PARLIAMENT: CONTINUES TO APPROVE THE EC POOR MANAGEMENT OF EU FUNDS.

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