A humiliating attack on the management of the European Union's Joint Research Centre (JRC) has been published by the EU Court of Auditors, Brussels' financial watchdog.
The report criticises long-standing failures in the control of projects, the award of contracts, accounts monitoring and inventories. It examines the period from 1995-98, when the centre had an overall budget of E141 billion (Pounds 900 million) to spend.
Anticipating the report, the European Commission embarked on a series of reforms at the multi-site JRC - the EU's in-house research establishment - which it claims "are a suitable response to the court's criticisms". It has sharply reduced the number of projects in the JRC's work programme, from 700 to 100, and set up a system "to monitor and assess these projects in close cooperation with the directorate benefiting from the project".
The commission has followed some of the report's recommendations, such as the abolition of an advisory committee on procurements and contracts, which was designed to oversee the centre's work but included a large number of JRC staff and met only four or five times a year.
Also under pressure from the EU watchdog, the JRC carried out a physical inventory of equipment, which had not been undertaken for years.
"During checks carried out afterwards, the court ascertained that for approximately 20,000 articles recorded, this inventory revealed a discrepancy of 14 per cent between the physical reality and the records entered into the account," the report says. Other problems included the transfer of data from one accounting software system to another, which led to the loss of important information on payments for existing projects.
Following the Court of Auditors' advice, the JRC data-mined its old system but, says the report, "in spite of considerable effort, the result was not satisfactory". In response, the commission has said that it has improved its contracts database. The report also attacks the "supervision of contract procedures at all stages", because of poor controls.
As a result, the court found that the JRC had been recruiting staff in an "irregular manner" and that in two cases whole contracts had been sub-contracted, breaching EU directives, which allow only partial sub-contracting.