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European Court of Auditors 1977-2017 40 Years of Public Auditing © European Union, 2017 This publication has been produced to mark the 40th anniversary Reproduction is authorised provided the of the European Court of Auditors in October 2017. It has been source is acknowledged prepared by Rosmarie Carotti, the former editor-in-chief of the ECA Journal, and follows up on the reflections published for the The contents of the interviews and the articles 35th anniversary of the Institution. Based on internal documents are the sole responsibility of the interviewees and interviews given to the editor, this publication summarises, and authors and do not necessarily reflect the without being exhaustive, the main developments in the ECA opinion of the European Court of Auditors since its establishment and brings them to life with interviews and new testimonials. Layout: Nicolas Toulas, Directorate of the Presidency, ECA This anniversary publication has been published for information European Court of Auditors purposes only and must not be taken as an official interpretation 12, rue Alcide De Gasperi of the role assigned to the European Court of Auditors. 1615 Luxembourg, LUXEMBOURG Special thanks to all those who have contributed to this book by sharing their professional insight and experience. eca.europa.eu @EUAuditors EUAuditorsECA Rosmarie Carotti former editor-in-chief of the ECA Journal European Court of Auditors 1977-2017 40 Years of Public Auditing FOREWORD KLAUS-HEINER LEHNE, ECA President On 13 September 2016 the ECA Members elected Klaus-Heiner Lehne, the German Member, to serve as President for a three-year term. He took up his post on 1 October 2016. As the European Court of Auditors celebrates four decades of existence, it is important to look back at those whose shoulders we are standing on – the former Members and staff of the Court who each contributed their part to make our Institution what it is today. What were their challenges and how did they overcome them? Are the solutions which they found at the time applicable to us in today’s context? As a relatively young and small institution, is the “founding spirit” of the Court still with us? How has the role of an auditor, and the expectations that citizens may have of one, changed in the last forty years, and have we successfully adapted? In other words, our vocation may be to hear (audire) but can we also listen? Have we found the right balance between financial and performance audit? How persuasive is the Court in making its recommendations a reality on the ground? Or to put it more grandly, is it possible to discern what impact the Court, as a “soft power”, has had over the years on the Union’s overall direction of travel? Answering these questions and learning from our past will also be an opportunity to chart a trajectory for the future. The EU is beset by challenges on all sides – be it a loss of trust and the perception among many citizens that it is somehow the Trojan horse of globalisation and its perils, the negotiations over the withdrawal of a Member State, the aftermath of a severe economic and financial crisis, and Klaus-Heiner Lehne, the threats posed by foreign powers intent on proving that the European model of peaceful ECA President integration, liberal democracy and human rights including freedom of expression is a failure. For many Europeans of my generation who were born in the years after the Second World War, the uniting of Europe meant first and foremost the promise of peace. However, such a promise of peace does not speak in the same way to a thirty year-old who became unemployed during the economic crisis or to an eighteen year-old who will have the right to vote at the next European Parliament election. We should of course never forget the Union’s fundamental premise, and the 7 FOREWORD Klaus-Heiner Lehne, ECA President lack of precedent elsewhere in the world or indeed in history for building such a transnational democracy. But the Court of Auditors should also help to build, together with the other institutions and the Member States, a contemporary narrative for Europe – what kind of Europe we want for our children, rather than what the Union helps us to avoid. At the very moment when political rhetoric is at times reaching its shrillest level worldwide, where the arts of blockage, misinformation and manipulation have become almost ubiquitous in the public mind and especially on the internet, our citizens expect governments which work cooperatively and effective institutions which deliver concrete results rather than hot air. And this is where the Court of Auditors has a clear role to play, as a guardian of citizens’ interests, as an independent voice capable of meting out praise where things work, but also highlighting uncomfortable truths where things are not working properly. Although the EU’s budget is comparatively small in comparison to public expenditure in the Member States, citizens rightly expect every euro spent at EU level to bring added value in comparison to spending that same euro at national level. Just as subsidiarity should be our watchword when making legislation, so it should also be when deciding how to spend our common budget. What is more, the high-level crisis management that took place in the last ten years in different fields, for instance on shoring up Member States’ finances during the crisis, on dealing with refugees and migrants, or on supporting certain third countries, took on a distinctly intergovernmental flavour. This has made the Court’s role even more challenging, with the emergence of a variety of funds and financial instruments – some would say a 'Galaxy of Budgets' – not all of which are subject to the same rules and accountability, be it by parliamentarians or by auditors. As President of the Court of Auditors, I stand for the 'Community Method' – not only because it is legislatively more efficient, not only because it ensures legal certainty and judicial redress, but also because it guarantees our citizens full audit powers, without any gaps. As the Court of Auditors’ eleventh president, I would like share four reflections with you on how the Court could better address today’s challenges. Firstly, we should be in a position to issue the right product at the right time. This means deciding on our work programme in a strategic manner, publishing our work at the best moment, for example when legislation or programmes are being revised. It also means adapting our Annual Report to today’s challenges, and I am optimistic that we are now on the right track to see this happen. 8 FOREWORD Klaus-Heiner Lehne, ECA President Secondly, we need closer cooperation with all our stakeholders, starting with the EP, Council, Commission and the national Supreme Audit Institutions, with social partners, with civil society and with our partners around the world. Being independent should not mean operating in a vacuum, like the faceless grey-cloaked phantoms imagined by Terry Pratchett. Thirdly, the Court should better communicate its work in the media and make itself more understandable to citizens. The Court of Auditors should be a distinctive, recognised and respected voice in the public debate, not only in the institutional “bubble” but also in the Member States, in national Parliaments and in the academic world. Fourthly, this can only be possible with a solid and effective internal organisation, with a highly qualified and motivated workforce who benefit from continuous training. I trust that this publication, with its many thought-provoking contributions and testimonies, can help us answer some of the questions I raised above and chart our future with as much wisdom as possible. I wish you a pleasant read! Klaus-Heiner Lehne 9 FOREWORD EDUARDO RUIZ GARCÍA, ECA Secretary-General “Our staff are our main asset…” Asset : “Advantage, aid, benefit, blessing, boon, help, resource, service… valuables, wealth”. Paperback Thesaurus. Collins, 1986). “…knowledge, technique, know-how, skill… personnel.” Roget’s Thesaurus of English words and phrases (ref 629). Penguin Editions, 1987. “Our staff are our main asset…” This is a very common thing for CEOs or high ranking managers to say, but to what extent is this statement sincere and to what extent is it true that our staff are our most valuable asset? I will try to reply to this question from the perspective of the 40th anniversary of the European Court of Auditors (ECA). On the 1st of January 1978 there were 47 people working at the ECA. This figure included Members, the staff of their private offices, auditors, translators, administrative and clerical staff and drivers. At the beginning of 2017, the ECA employed around 1000 people, including Members, officials, contract staff, seconded national experts and trainees. In this 40-year journey, more than 2700 people have worked for the institution and have contributed towards achieving Eduardo Ruiz García, its mission and objectives. ECA Secretary-General Staff numbers have increased, but “numbers” is not the only parameter for assessing the value of an asset, and it is not even the most relevant. Overall, our staff have become more diversified. In 1978, there were nine nationalities; now there are 28 EU nationalities, plus people coming from other countries like the former Yugoslav Republic of Macedonia, Turkey and Serbia. Every day, in the corridors, we pass colleagues who are not only of European origin, but who may also be of African, Asian, Caribbean and American backgrounds. In the early years, most of our auditors were lawyers or accounting experts; 10 FOREWORD Eduardo Ruiz García, ECA Secretary-General now – although the bulk of them still have legal and accounting backgrounds – many others have academic degrees in economics, or in engineering, political science or business administration.