Irish accounting for structural funds, particularly those targeted at business, comes in for criticism from the Court of Auditors. Serious weaknesses were found in the accounting system used by Eolas and the Industrial Development Authority in their management of the Industry Operational Programme between 1989 and 1993. Some £867 million of EU money was in the programme.
Despite reservations expressed by the EU's financial controllers that the financial information system of the two bodies was seriously unreliable, the Commission allowed the accounts for the period to be closed in 1994.
But, unhappy with the response of the Irish authorities, the Commission in 1995 threatened to cut off all further funding under the industry programme. The Government commissioned an independent audit to reconcile the published accounts of the two agencies, which found "the system appears to be structured so as to provide an adequate reconciliation".
While this was accepted by the Commission, the court says it was "not possible to trace within a reasonable time the expenditure from the agencies' grant payment system to the annual claimed expenditure, as no systematic reconciliation took place".
The report also points to a failure to correct previously reported deficiencies in financial controls on regional fund payments for industrial development. "Some official documents retained by the Department of Enterprise and Employment as justifying the final declaration amounts had been written in pencil, altered using correcting fluid or merely cancelled without explanation."
The fund in question concerned £441 million in payments to industry.
Accounting problems in the Telematique (£15 million) and Stride (£13.5 million) programmes in the early 1990s meant a detailed breakdown of spending was not possible. In addition, a project linking six university libraries could not be audited owing to lack of documentation - a grant of £284,000 was paid.
Other black marks against Ireland:
Security arrangements for free zones in Ireland are almost non-existent;
Importers who say they are going to re-export after processing to avail of customs exemption regularly fail to meet time requirements;
Weaknesses in system of crosschecking eligibility for cereals payments to eliminate double claims;
"Deseasonalisation" payments, intended to help smooth fluctuations in beef slaughterings through the year, appear not to have had any significant effect on prices in the Republic or Northern Ireland.
In spending European Social Funds, the Government was not able to demonstrate to the court's satisfaction that it complied with the principle of "additionality". EU money is not supposed to replace member-state spending but to add to it.
