Financial Management and Fraud in the EU Lord Pearson's Speech to the House of Lords, 5th March 2007
INTRODUCTION
On 5th March 2007, Lord Pearson addressed the House of Lords to highlight fraudulent accounting practices within the EU, laying the blame for these abuses at the office of the EU Commission.
Lord Pearson delivered his speech as part of the Lords' debate on Financial Management and Fraud within the EU. Andrew Hamilton was delighted to assist in the preparation of the speech, providing a technical analysis of the auditor's report.
"As I am not a chartered accountant, I have been guided in what I am about to say by some eminent practitioners in the field, principally Mr Andrew Hamilton FCA, who heads up his own successful practice in Edinburgh, and Mr Hugh Williams FCA, who has also published widely and is a senior partner of an award-winning firm in Plymouth."
"I am indebted to Mr Hamilton for raising this interesting question after he manfully struggled through the 139 pages of the Commission’s annual accounts for 2005 together with the accompanying 228 pages of the Court of Auditors’ negative report. The experience made him an immediate and avid devotee of Marta Andreasen, of course, and his discoveries brought him to the attention of that great Euro-sceptic luminary, Mr Christopher Booker of the Sunday Telegraph."
"...the report does its best to excuse the inexcusable and to wander round all over the place without pinning the blame for the EU’s financial shambles firmly where it belongs; that is, with the European Commission in Brussels."
"I will pass in unaccustomed and frustrated silence over the lack of respect for standard accounting principles such as double-entry bookkeeping and accrual accounting; the lack of security in the accounting system; poor internal controls with no one taking responsibility for sound financial management, with the chief accounting officer not even signing off the accounts; failings with the budgets; risks with advance payments; and the whole system wide open to fraud. No, I will resist all that and concentrate instead on the small matter of what has happened to €28 billion."
"The questions my accountant friends would like me to put through the Government to the Commission are these. The UK sends many billions of pounds every year to Brussels, so I would have thought that the Government are entitled to some form of answer, particularly when the Commission’s 2004 balance sheet has been understated by some 25 per cent. It has nothing to do with a change in accounting policy, but is just a typical example of the EU’s complete disregard for financial probity."
