The EU is a mess, even its accounts aren’t signed off. Why should I support staying in?

Because you have been misled.  The EU accounts are signed off.  In 2014, the European Commission published the annual “Protection of the European Union’s financial interests” report, which detected fraud in just 0.3% of all EU expenditure.[1] 

A key part of this misunderstanding comes from the European Court of Auditors (ECA) report that comes out each year.  It is a hugely complex and technical report that does not actually use internationally understood accounting language.  The ECA assesses the EU budget by looking at the main departments of budgetary policy on a case by case basis.[2]  The often-repeated misunderstanding that “the accounts were not signed off” is simply untrue. 

The accounts have now been signed off for many years.

Revenue is described as completely “legal and regular”; Commitments are described as completely “legal and regular”.[3] The findings of the report are, in fact, based around working out the percentage “error” in each of these areas and any “error” beyond 2% will lead to the ECA not issuing "a Positive Statement of Assurance".  Crucially, an “error” does not mean that fraud has taken place and not issuing a Positive Statement of Assurance does not mean that the accounts have not been signed off.

The Commission emphasised this in its reply to the ECA that an error, even a documentary one, in a procurement process will show up in the audit.[4]  The money spent in such a cases could have actually been spent correctly and the project completed successfully but if all procedures have not been followed then it will still be classified as an “error”. [5] This was recognised by the House of Lords Select Committee for the EU as far back as 2006: 

We share the concern raised with us by the European Court of Auditors that their decision not to give a positive Statement of Assurance can be misunderstood. We recognise that the lack of a positive Statement of Assurance does not necessarily indicate that high levels of fraudulent or corrupt transactions have taken place. [6]

 

Fiftieth Report on the European Union’, House of Lords, 7 November 2006.

Furthermore, the often cited myth that the Brussels bureaucracy is enormous and inefficient has also been shown to be inaccurate. The reality is that the ECA said there was a less than 1% error in this department and the control systems in place were effective.[7]

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[1] ‘Annual report 2014 on the Protection of the EU’s financial interests - Fight against fraud’, The Commission and of the European Anti-Fraud Office (OLAF), 2015.

[2] Mainly, the Revenue (money received by the EU); Commitments (money returned by the EU to member states to spend within their territory on the EU programmes they administer) and the Payments (money actually spent by the EU). ‘ECA Annual Report on the Implementation of the Budget 2013 ’, European Court of Auditors, 2014.

[3] ‘ECA Annual Report on the Implementation of the Budget 2013 ’, European Court of Auditors, 2014.

[4] ‘ECA Annual Report on the Implementation of the Budget 2013 ’, European Court of Auditors, 2014.

[5] ‘Annual report of the European Court of Auditors – Frequently Asked Questions’, EU Commission Fact Sheet, 2014.

[6] ‘Fiftieth Report on the European Union’, House of Lords, 7 November 2006.

[7] Administration error in 2013 was 1% and in 2014 0.5%. ‘ECA Annual Report on the Implementation of the Budget 2013’, European Court of Auditors, 2014; ‘ECA EU Audit in Brief ’, European Court of Auditors, 2014.