Mr. Kevin Cardiff:

Public procurement is certainly a big area. It is not a question of money being spent on things for which it was not intended, or not always at any rate. In this area, it is about spending money in a way that is contrary to EU policy. That policy is about allowing everybody a shot at tendering for large sums of moneys. It is not just small private operators that make these mistakes. Sometimes very big operators do so. In one federal member state, we found this year that several regional government bodies were all making the same procurement error and it did not seem like one they should have missed. The errors we find are not confined to new member states or to private entities. They arise on a broad basis.

In fairness to the Commission and the member states, a large amount of money and effort goes into controlling the system. That is under pressure from us, from the European Parliament and from committees like this one.

As Deputy Dooley was implying, the big issue for policymakers is how to keep it simple. The answer is that if there are many different policy objectives for a single instrument, there will be a good deal of complexity. For example, under the Common Agricultural Policy, direct payments are aimed at income support, and that is understood. They are aimed at supporting rural communities, and that is understood as well. However, they are also aimed at environmental progress and sustainability. They are also aimed at European Union procurement rules and many other things as well as the simple income support objective. This means the small farmer to which Deputy Dooley referred as well as bigger farmers have a range of things which they must look out for. There are at least a dozen areas of cross-compliance and probably more which they must watch out for. I gather there are 18. The EU authorities and policymakers have said all these issues are important, and if we are going to pay money to farmers with a view to maintaining the rural environment and developing rural areas, we are entitled to expect them. From the point of view of auditors, it is our job to inspect and see whether the rules have been followed. It is not our job to complain about the policy. We make policy recommendations from time to time but it is not in our hands to do that.

The land parcel identification system, LPIS, was mentioned. As committee members are aware, this is a major issue in Ireland and in other countries too. The systems in agriculture and other areas have major flaws, at least having regard to the standards the policymakers have set. Again, in the North, in England and in various other countries, our audit report has identified particular systems problems. Even in Ireland under the European Social Fund there are some systems issues. Member states are quite good at following up on European Court of Auditors and Commission reports, and when they do not, they run the risk of losing funds or at least having funds moved around.

Our problem as auditors is that sometimes we see policy problems. We not only see errors but also policy problems. In our value for money audits in particular we try to bring these to attention. Our value for money audits range widely. Deputy Eric Byrne referred to the food cycle. We have done work on organic foods and whether they are properly controlled. We have done work on slaughterhouses, especially in the new member states, since they received specific moneys for upgrading. We have done work on the rural environment. I have referred to agriculture a good deal because we are in Ireland, but we have also done work recently on EU supports for Palestine and Egypt and on road programmes. There is controversy in Spain because we found some things about the cost of roads in Spain compared with Germany. We try to inform policymakers and the European Parliament about what we find in the course of our work which might be of assistance to them. In the value for money areas we find the Commission takes many of our recommendations into account. That is not to say it takes all of them on board fully, but it takes them into account at least and that is heartening to us. What is somewhat puzzling is why, even after all the recommendations are taken into account, we still see the error rate drifting up. On that very difficult question I will pass the committee on to Mr. Fennessy.