9. The Court of Auditors

 

According to the mission statement of the Court of Auditors its mission is to audit independently the collection and spending of European Union funds and, through this, to assess the way that the European institutions discharge these functions.

The Court examines whether financial operations have been properly recorded, legally and regularly executed and managed so as to ensure economy, efficiency and effectiveness.

The Court of Auditors was set up in 1975. It is based in Luxembourg. Its aim is to ensure that the taxpayers get maximum value for their money, and it has the right to audit any person or organisation handling EU funds.

The Court is composed by one member from each EU country, appointed by the common accord of the governments of the Member States for a renewable term of six years. The members elect one as President for a renewable term of three years. The current president of the Court of Auditors is Hubert Weber, from Austria, was elected as President in January 2005. The Court of Auditors is completely independent from the other EU institutions and from the Member States.

The Court of Auditor’s main roles are:

  1. To check that the EC budget is correctly implemented, that EU income and expenditure is legal and above board and to ensure sound financial management.
  2. For the above purpose it may investigates the paperwork of any person or organisation handling EU income or expenditure. It frequently carries out on-the-spot checks.
  3. Its findings are written up in reports which bring any problems to the attention of the Commission and EU Member State governments.
  4. It gives every year with an audit report on the previous financial year to the Parliament and the Council.
  5. It gives opinion on proposals for EU financial legislation and for EU action to fight against fraud.

The budget of the European Communities

The budget of the European Communities is the instrument which, for each financial year, forecasts and authorises all revenue and expenditure considered necessary for the Communities.
The budget is established according to the following basic principles: (1) unity of the document: all Community revenue and expenditure must be compiled in a single, unique document, (2) universality (rule of non-assignment of revenue and expenditure and non-adjustment against each other), (3) annually: The budget corresponds to one annual financial year, (4) the principle of equilibrium: budget revenue and payment appropriations must be in balance, (5) the concept of specification: appropriations must have a specified purpose and be earmarked for a specific use.

The revenue of the EC budget is made up of (1) own resources (customs duties, agricultural duties, sugar levies) from a share of national VAT and from a national contribution based on GNI (maximum ceiling is 1,24% of the GNI).

The expenditure is divided into two parts: Part „A” for the institutions' administrative appropriations and Part „B” for the operating expenditure by the Commission. The expenditures are the followings (1) common agricultural policy, (2) structural operations (Structural Funds, Cohesion Fund, (3) internal policies, (4) external actions, (5) administrative expenditure, (6) reserves, (7) pre-accession funds, (8) expenditures earmarked for new Member States.

 


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