1. Towards reform of the EU Budget _________________________________________________________________________________Accountability, the aching tooth ? European Parliament Budgetary Control Committee – 6 May 2008 Gabriele CIPRIANI, Director, European Court of Auditors Gabriele.CIPRIANI@eca.europa.eu

2. A point of view on _________________________________________________________________________________ The assurance system for structural policies. Threats to full accountability. A chance for improvement: reform of the EU Budget.

3. Background _________________________________________________________________________________ The EU budget and national budgets. Policy eligibility checks. Shared management, one final responsibility.

4. Audit opinion at closure Commission audits Annual opinion based on national audits Certification of expenditure + first level verification Compliance assessment of management and control systems Guarantees in programme negotiations Ex ante Ex post During implementation Source: European Commission - DG Regio How assurance will be built up _________________________________________________________________________________

5. 2007-13 Programmes _________________________________________________________________________________ Source: European Commission - DG Regio – stand 5.2.2008 Community Amount 344,4 billion Euro National Public Amount 143,6 billion Euro

6. However... _________________________________________________________________________________ The ECA continues to record an high 'error' rate (at least 12 % in 2006). This shows that : control systems in the member states are generally ineffective, or only moderately effective, and the Commission exercises only moderately effective supervision to prevent reimbursement of overstated or ineligible expenditure. Many serious errors are a breach of national rules and are originated by inadequate ex-ante systems.

7. Where the problem lies _________________________________________________________________________________ Source: European Court of Auditors – Annual Report 2006 Red (Unsatisfactory) 25 Cells Green (Satisfactory) 23 Cells Yellow (Partially Satisfactory) 28 Cells

8. The Contract of confidence _________________________________________________________________________________ the Commission having reasonable assurance that the financial management and control systems comply with the requirements. national authorities having drawn up a satisfactory audit strategy covering all audit activity for the whole period. Member states undertaking to submit reports providing an adequate basis for assessing the effective implementation of the audit strategy and setting out conclusions with regard to the functioning of the management and control systems. A triple-A rating, subject to :

9. Threats to full accountability _________________________________________________________________________________ No assurance, no full accountability. Shared management, shared interests ? Preventive actions, the key issue. Are more rules needed ?

10. Financial corrections, a short-cut ? _________________________________________________________________________________ Dissuasive ? Exhaustive ? A cure-all ?

11. Summing up _________________________________________________________________________________ Reputation risk. Legality of spending, a key condition for effectiveness. Value for money concerns. However, we have a chance...

12. The EU Budget reform _________________________________________________________________________________ One EU Budget, one final responsibility. Objectives in line with the resources. Prevention is better than cure. A dynamic of rewards. Who fails pays principle. Policy eligibility checks.

13. Thank you for your attention. Cipriani, G. (2007), Rethinking the EU Budget : Three Unavoidable Reforms, CEPS paperbacks, CEPS, Brussels, November. http://shop.ceps.eu/BookDetail.php?item_id=1563 Cipriani, G. (2006), The Responsibility for Implementing the Community Budget, CEPS Working Document No. 247, CEPS, Brussels, June. http://shop.ceps.eu/BookDetail.php?item_id=1353