Accrual accounts debut assured

By Tim King

Date: 28/10/04

Departing Budget Commissioner Michaele Schreyer says she is confident the switch-over to accrual accounting at the beginning of next year will be on schedule and trouble-free.

"From January 1 we will meet the requirements of the financial regulation," she said. The Commission this month began hands-on training of 1,500 staff who will be using the adapted accounting system. A further 5,500 staff are receiving less detailed training.

The budget department is starting trial operations of the accruals accounting system, running in parallel with the current cash-based set up.

Despite the delay in putting the new Commission in place, it seems that Schreyer will be leaving the Commission before the changeover. "I cannot take the harvest of a project which I started and into which I have put a lot of energy. That is on the one hand personally regrettable but gives on the other hand the satisfaction of having contributed to the modernization of the institution so that it is fit for the future," the commissioner said.

But the delay does mean that Schreyer might still be in office when the Court of Auditors delivers its annual report on the 2003 accounts on 16 November. Schreyer will already have seen drafts of the Court's report. Asked whether she expected further criticism, Schreyer said: "The Court of Auditors has always to write reports making for improvements. They will fulfil this role."

The Court of Auditors has repeatedly criticized the Commission's inability to present an accurate picture of its assets and liabilities, which the accruals accounting system is designed to rectify. Asked whether there would have to be sizeable write-offs, if the accruals accounts threw the spotlight on unrecoverable amounts owing, Schreyer said she did not believe so.

The validation by the budget department of the accounts systems of individual Commission departments will not be carried out until 2005, the Commission's accountant Brian Gray said. It is these departmental systems that feed into the central SINCOM accounting system. The interfaces between the individual systems and SINCOM will be a crucial test for the new application.

The European Commission will not publish an opening balance-sheet for January 2005 until it publishes the accounts for 2005, Gray said. The Court of Auditors is concerned that the late arrival of a opening balance sheet might impede its ability to assess the accounts.

Schreyer said the accounting reform would provide "a controls system where there is a high probability that you can find mistakes or irregularities".

Asked about the experience with Gray's predecessor, Marta Andreasen, who was removed from the post of accountant after criticizing the Commission's accounting system, Schreyer said: "She was the responsible person to change things and start reform. We lost some time."

Article anticipates the European Commission's changeover from cash-based to accrual accounting on 1 January 2005.

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