Wednesday, 19 December 20071
CoCoBu meeting with budgetary control committees of national parliaments
onNational management declarations
Audit of the Netherlands’ Member State declaration
Saskia J Stuiveling
President Netherlands Court of Audit
Wednesday, 19 December 20072
This presentation
• Improving the system: audit cooperation in
the EU
• Member State Declaration of the
Netherlands and audit by NCA
• Experiences: process and substantive
issues
• Conclusions and recommendations
Wednesday, 19 December 20073
Who wants to improve the system?
• European Parliament: Clearance of Accounts 2003 –
2005 with strong call for MS declarations
• European Commission: Roadmap 2004 + Action Plan
2006 ask MS SAIs for annual audits & reports to national parliaments
• ECA: Single Audit Opinion 2004 + Opinion Annual Summaries and Member State declarations 2007
• National Parliaments: COSAC resolution 2005 calls
for more attention to EU financial management and annual reports by MS SAIs (+ new resolution coming)
Wednesday, 19 December 20074
EU Audit Cooperation
European Court of Auditors
European Commission
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MS 1: CAP Structural Funds Own resources
MS 2: CAP Structural Funds Own resources
MS 3: CAP Structural Funds Own resources
MS 4: CAP Structural Funds Own resources
MS 5: CAP Structural Funds Own resources
MS 25: CAP Structural Funds Own resources
Wednesday, 19 December 20075
First Member State Declaration:the Netherlands
• Common Agricultural Policy, 2006, 1.2 Bln euro.
• Declaration by Minister of Finance, on the basis of sub-declaration by minister of Agriculture
• Signed in Brussels, May 2007
• Declaration positive on:
functioning of systems
legality and regularity of transactions
• Next (2008) declaration also on CAP (2007). From 2009 declaration also includes Structural Funds, Fisheries, Migration Funds, and contribution to Own Resources
Wednesday, 19 December 20076
Accountability and audit structure CAP expenditure in the Netherlands
Member state declaration (Minister of Finance)
Sub-declaration (Minister of Agriculture)
Annual reports on CAP expenditure (paying agencies)
Inspection reports(AID, Customs, other)
AD Agriculturecertifying audit
Auditor’s opinion on CAP revenue and
expenditureby AD Agriculture
Investigation of sub-declaration by AdF
CAP management, accountability and audit
Implementation of the member state declaration 2006
Paying agencies’ internal audit services
Inspectorates’ internal audit services
Wednesday, 19 December 20077
Audit Netherlands Court of Audit
• Norms derived from European legislation
• Opinion on:
A. Preparation of the Declaration by minister of
Finance (and minister of Agriculture)
B. Functioning of management and control
systems
C. Legality and regularity of the underlying
transactions
Wednesday, 19 December 20078
Opinion Netherlands Court of AuditA. Preparation declaration: broadly sound, but improvement
possible:
auditors declaration covering full range of sub-declaration;
insight in criteria used by minister of Finance in judgement and reporting;
B. Functioning systems: generally sound
C. Legality and regularity: sound insofar as expenditure and revenu relate to public bodies. With regard to final beneficaries:
For 50% of CAP money reasonable assurance;
For 25% irregularities below tolerable threshold (1%)
For 25% (export schemes) no estimate of irregularities possible on the basis of available information
Wednesday, 19 December 20079
Experiences: the audit process
• High political profile Declaration has effects on audit process:
High time pressure
High intensity discussions with government departments involved
Norms derived from EU-legislation, but declaration as such not mandatory. Not all government departments convinced of necessity.
Stepwise process
Open communication and good relations essential
Wednesday, 19 December 200710
Experiences: substantive issues (1)
• Diversity within and between EU-institutions
regarding information they want to receive
from member states:
Different DG’s of the Commission use different
reporting moments (e.g. CAP and Structural Funds)
for Member State information
Annual report of ECA does not focus for all funds on
same year as Annual Activity Reports of
Commission.
Wednesday, 19 December 200711
Experiences: substantive issues (2)
• Interpretation legality and regularity differs between Member States, and between EU and Member States:
Degree to which statement of Member State to DG covers
systems only or also legality and regularity final beneficiaries
• Approach of auditing legality and regularity differs between MS SAIs, and between ECA and many MS SAIs:
Certain criteria for “output” of SAIs may be needed. Working Group on Common Auditing Standards step in that direction
Wednesday, 19 December 200712
Conclusions and recommendations• Audited Member State declarations can become part of
accountability EU, but
• Some harmonisation needed before a Member State declaration can include statement on more than one policy
area for the same year
• Together with improved Community Internal Control Framework leading to DAS by ECA:
1. 1. More transparency, both EU-Wide and per Member State
2. 2. More legality and regularity
• E.g. increase of “good governance”
• More accountability more confidence in EU