The European Commission has a "chronically sordid" accounting system and is still unable to keep track of the EU's £73billion budget after a decade of financial scandals, according to a top EU insider. An internal email obtained by The Telegraph paints an ugly picture of an autocratic body with an "incestuous esprit de corps" that uses its bureaucratic muscle to "trash" any official who dares to question its methods. It said the Budget Directorate was in "persistent denial of the real nature and depth of problems" it faced, choosing "cavity filling solutions where root canals were called for".The note was written by the former director-general of the commission's Internal Audit Service, Jules Muis, who retired last year after attempting to spearhead the EU's reform drive. He said the Budget fiefdom relied on non-qualified accountants to manage funds, allowing it to "get away with" practices that breached its own laws. It operated a "perverse incentive structure" that rewarded staff if "they managed not to discover financial malfeasance".
...
"Ten years after the Commission first failed to get normal audit blessing on its accounts and controls, it still does not have a proper accountability construct. This extraordinary situation is the major cause of the chronically sordid state of quality accounting," he said. The confidential letter, dated September 4 2004, was submitted to the disciplinary hearings of Marta Andreasen, the Commission's former chief accountant turned whistleblower. Mrs Andreasen lasted five months in the job in early 2002 before going public with claims that the EU budget was "an open till waiting to be robbed". She revealed that the EU still relied on single entry book-keeping - more than seven centuries after the Venetians switched double entry books - alleging that it let officials transfer of large sums without leaving an electronic fingerprint.
She was sacked last October by Neil Kinnock in his last official act as administration commissioner. Mr Muis defended Mrs Andreasen - the first trained accountant to hold the post - calling her a "focused and determined professional who was asking the right questions". He said that any chief accountant "worth his/her salt" would have been shocked by the "systemic control weaknesses" she encountered. He called Ms Andreasen's trial a "smoke and mirrors side-show", relying on character smear by anonymous witnesses, that reflected the culture of "might makes right". It sent a signal to other EU officials that disputes would "be resolved based on power-politics only". Mr Muis said that he had been threatened for stepping out of line, being warned: "We have ways of breaking people like you".
Must be the IRA representative.
Mrs Andreasen, a Spanish citizen, clashed with her superiors after they asked her to sign off on the budget for 2001 - the year before she started working for the body - but refused her request for access to the accounts. She later discovered an Euro200m discrepancy in the 2001 books that was air-brushed out of existence in the final report. EU officials now admit Euro50m of the missing money involved debts written off in Eastern Europe, but have refused to detail the loans.