Mr. Kevin Cardiff:

The national pay agency is required to carry out a certain number of checks. It is required to check 100% at an administrative level and particular percentages of checks must be done at the more detailed inspection level. The Commission also does checks. When we do the annual report, those are not risk-based because we are trying to get an error rate for the whole of European spending; therefore, it has to be done on a distributed random basis. We are not entitled to pick the riskiest cases and go looking for those. However, member states can do that and they do so, and the Commission also does risk-based audits.

To qualify for payments, a piece of land, for example, must reach the standard of being in good agricultural and environmental condition. If a field that ought to be in a condition suitable for grazing is overgrown with thistles and the like, it will not qualify. If it is full of rock outcrops, the rocky areas will not qualify. If it is forested over, it is not grazing land and also will not qualify. Sometimes people erroneously claim for such lands.

Page 15 shows a similar analysis for the regional policy, energy and transport areas. As I gave the analysis of agriculture as an example, I will not bore members too much with this slide, but the pattern is not too dissimilar. There is a relatively high level of error - not as high as in regional development - and the point to note is that although the error rate in this area is 7%, the number of transactions in which some error was found was 50%. There was quite a high level of minor errors in the samples.

Slide 17 - by way of an ad for the other work we do - indicates that in addition to the annual report on EU spending in general and in addition to the specific, usually very short, reports on individual agencies, the European Court of Auditors also produces a wide range of special reports.

These are intensive investigations of the efficiency and effectiveness of our economy and the value for money of spending on EU operations in a particular area. Each of these reports reflects audit work in several member states, which member states are often chosen on a risk-based basis. Particular countries are often chosen because they are regarded as more risky because they have more of a spend in a particular area and often also because we are looking for good examples that might be of use to the European system.

Typically, each of the member states will receive a visit and a number of projects or transactions will be audited. They will then receive a report specific to themselves, which is called a statement of preliminary findings. The Commission will also receive a separate in-depth audit report. The evidence from all member states is presented in a single report at EU level in general. This report is the one that is published. Ireland is not represented every time in these audits. However, it is selected from time to time. For example, the audit on the globalisation fund, which I forwarded to the committee a few months ago, dealt in part with Ireland. I do not propose to go into that report in detail as the Comptroller and Auditor General also did a full chapter on it in his report. My office endeavours to send to the committee reports which it believes would be of most interest to it. All our reports are published. If we are getting it wrong in terms of which reports are of interest to the committee, we can arrange to have all of them forwarded to it.

I thank members for their attention. The annual report of the Court of Auditors is addressed to the European Parliament and the Council but it is also specifically addressed to national parliaments. Therefore, we see national parliaments as one of the key audiences. Parliamentary delegations occasionally visit the court. The committee or any other committee of the Oireachtas is always welcome to visit us. I am happy to respond to any questions members may have.