The EU's financial watchdog today refused to give the all-clear for the European Commission's management of the bloc's budget for 2002 and highlighted problems in the key area of agriculture.
In excerpts from the report, the full version of which will be formally made public later in the day, the European Court of Auditors said the Commission had work to do to get its budget house fully in order.
"We have again qualified our opinion on the accuracy of the accounts and refused to provide assurance on the legality and regularity of payments in most areas of the budget," the court said in a statement.
The report was presented to members of the European Parliament last night,and a news conference is due at 9 a.m. today. EU states co-manage over 80 per cent of the EU budget, which this year is just under €100 billion.
The Commission, led by its president, Mr Romano Prodi, made reform of the EU's internal accounting and management system one of his reform priorities when he took office in 1999.
But fresh problems engulfed the Commission this year due to allegations of fraud at EU statistics agency Eurostat. The former head of the agency, removed from his post, has strongly denied such allegations.
The court found problems in particular with the Commission's management of the biggest part of the EU budget, agriculture. "For CAP [common agricultural policy] spending 'payments were, again, materially affected by error'," the statement said, citing part of the report.