Auditors reject Brussels accounts over £3bn errors

Errors in the accounts of the European Commission reached a total value of £3bn last year, the European Union's auditors said last night.

Errors in the accounts of the European Commission reached a total value of £3bn last year, the European Union's auditors said last night.

The European Court of Auditors refused to pass the commission's accounts for the fifth year running amid renewed calls for sweeping financial reforms. In its report, the auditors said that research grants and structural funds contained the largest number of errors, though they also found many overpayments going to farmers.

Among the payments that should never have been made were subsidies to a farmer who claimed his land was used for arable crops when it fact it was a densely planted orchard. Another farmer used a cow to claim a grant that was only payable on a bull, while many more claimed arable crop grants for tracks and for agricultural buildings.

The Court of Auditors said the level of error was unacceptable and that it could not pass them as either legal or regular. It also qualified its opinion on the reliability of the accounts, adding that they understated debtors by £320m and overstated the EU's outstanding commitments by £396m.

The court also expressed "disappointment" that the commission appeared to have made little progress despite four previous critical reports, and suggested the commission bring in an outside agency to help put matters right.

The commission must move away from a "spending culture" in which success was measured not by outcome but by how much money had been spent, the court said. It should also simplify its rules and procedures and should become more accountable. Managers should be judged by the success of programmes for which they were accountable, it added.

John Wiggins, the British member of the court, said the commission was moving in the right direction but still had a long way to go. "[The EU] must learn that red tape and bureaucracy is not the same thing as sound financial control," he said.

David Davis, chairman of the House of Commons Public Accounts Committee, said the commission was still not adequately tackling fraud. "I urge the new commission to quickly finalise their plans for implementing the root and branch reform that everyone accepts is needed," he said.

The Tory foreign affairs spokesman, John Maples, said the report exposed a budget "strewn with errors. European spending is out of control. Europe should do less, and do it better," he said.