REPORT on the nomination of Nikolaos Milionis as a Member of the Court of Auditors
4.12.2013 - (C7‑0310/2013 –2013/0808 (NLE))
Committee on Budgetary Control
Rapporteur: Inés Ayala Sender
PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION
on the nomination of Nikolaos Milionis as a Member of the Court of Auditors
(C7‑0310/2013 – 2013/0808(NLE))
(Consultation)
The European Parliament,
The European Parliament,
– having regard to Article 286(2) of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C7-0310/2013),
– having regard to Rule 108 of its Rules of Procedure,
– having regard to the report of the Committee on Budgetary Control (A7-0436/2013),
A. whereas Parliament’s Committee on Budgetary Control proceeded to evaluate the credentials of the nominee, in particular in view of the requirements laid down in Article 286(1) of the Treaty on the Functioning of the European Union;
B. whereas at its meeting of 7 November 2013 the Committee on Budgetary Control heard the Council’s nominee for membership of the Court of Auditors;
1. Delivers a favourable opinion on the Council’s nomination of Nikolaos Milionis as a Member of the Court of Auditors;
2. Instructs its President to forward this decision to the Council and, for information, the Court of Auditors, the other institutions of the European Union and the audit institutions of the Member States.
ANNEX 1: CURRICULUM VITÆ OF NIKOLAOS MILIONIS
Nationality Greek
Date of birth 7 September1959
Place of birth Arta, Greece
Education
1998 University of Athens
PhD in Public Finance Law
Thesis title: The Institutional Role of the Hellenic Court of Audit
1994 University of Paris VIII,
Diplôme d’ études approfondies (Diploma of Further Studies)
in Public Finance and Accountability
1993 University of Paris I, Panthéon-Sorbonne,
Diplôme d’ études approfondies (Diploma of Further Studies)
in Public Law
1987-1989 National School of Public Administration
1981 University of Athens
First Degree in Law
Professional experience
2004 - present Councillor (Conseiller-Maître) of the Hellenic Court of Audit
2011-2012 Section President of the Hellenic Court of Audit
1997-2004 Appellate Judge (Conseiller Référendaire) of the Hellenic Court of Audit
1989-1997 First Instance Judge (Auditeur) of the Hellenic Court of Audit
Teaching experience
2010 - present Assistant Professor in Public Finance Law,
Panteion University of Political Science, Athens
2007-2010 Taught the subject ‘Competences of the Hellenic Court of Audit’
at the University of Athens
1998-2012 Taught European Financial Law
and the Jurisprudence of the Court of Justice
of the European Union on Fundamental Freedoms
at the Hellenic National School for the Judiciary
1997-1998 Taught Public Finance Law
at the National School of Public Administration
Other training/experience
1994 Followed a stage in the French Cour des Comptes
1995-1996 Worked as an attaché to the Greek member
of the European Court of Auditors
Books
(1) Court of Audit: Modern Trends and Evolution (NOMIKI VIVLIOTHIKI 2012);
(2) Elements of Fiscal and Financial European Law (SAKKOULAS 2008);
(3) The Institutional Role of the Hellenic Court of Audit (SAKKOULAS 2002, 2nd edition 2006);
(4) The European Court of Auditors (SAKKOULAS 1999).
Papers, articles and contributions
Has written various papers and articles in law reviews and has contributed in memorial volumes and commemorative books of which the most relative to the advertised post are, inter alia:
(1) Towards a new financial governing of the State (2012);
(2) The European Court of Auditors (Arts. 285-287 TFEU): Contribution to the Volume dedicated to the TFEU interpretation by article (2012);
(3) Relationship between judicial control and audit findings (commentary on the European Court case ‘Ismeri Europa Srl v Court of Auditors of the European Communities’) (2011);
(4) European integration and national financial sovereignty (2007);
(5) Anti-corruption strategies within the competences of the European Union Supreme Audit Institutions (2006);
(6) Financial Audit of Local Public Authorities: The French Example (2006);
(7) Case law influence on Government Budget (2005);
(8) The Public Finance Law Judge before the European Court of Human Rights (2003);
(9) Fraud intended to damage the interests of the European Union and the Court of Audit (1999);
(10) Judicial nature of the European Union Member-States Audit Institutions (1998);
(11) The European Court of Auditors and the formation of the ‘European Style of Audit’ (1998);
(12) Critical approach of the notion of the ‘Public Accountable’ (Comptable Public) in the Greek and French Financial Law (1995) and
(13) Control of public enterprises and the Court of Audit (1993).
Has also actively participated in congresses, colloquia and seminars.
Other interests/competencies
Painting. Has studied with Giorgos Rorris.
Has written two books on aesthetics and literature and was respectively awarded the ‘Panagiotis Foteas’ prize in 2009.
ANNEX 2: ANSWERS BY NIKOLAOS MILIONIS TO THE QUESTIONNAIRE
Professional experience
1. Please highlight the main aspects of your professional experience in public finance, management or management auditing
My entire career has been with the Hellenic Court of Audit working in the following capacities:
My responsibilities were in the field of public finance, commensurate with my degree of seniority within the court, starting out as rapporteur and leading to my present post as senior councillor. My responsibilities in the various sections included carrying out and subsequently supervising audits of ministries, public law legal entities and local authorities.
For a number of years (2007-2011) I worked in the section responsible for auditing EU funded projects in Greece and identifying non-eligible expenditure (financial corrections).
Subsequently (2012-2013) as senior councillor, I was in charge of auditing asset declarations by public functionaries and civil servants, involving tax assessments of former ministers and journalists, among others.
For a number of years, I was head of the public service contract verification section.
I was involved in on-the-spot verification of Community funding for the Benaki Museum in Athens and the Athens Concert Hall (1998) and financial audits relating of eligible expenditure at the National Institute for Medicines (2003) and of national funding for the European Cultural Centre of Delphi (a private law legal person), accompanied by a report on management problems arising (2012).
As a member of the Court of Audit I was, for around ten years (1997-2006), chair of the Athens Concert Hall audit committee.
From 2012, I was appointed member of the Audit Court working party responsible for pilot audits and reporting to the Attica prefectural authorities, Athens General Hospital and the Athens Institute of Technology, as part of a European Court of Auditors Task Force initiative for the provision of technical assistance to the Hellenic Court of Audit and collaboration with the Dutch, Belgian, French and German audit institutes in developing modern financial and performance audit methods. I am also involved with the working party responsible for forging closer relations between the Hellenic Court of Audit and the Hellenic Parliament. In this connection, I attended a performance audit seminar in February 2013 at the Dutch Audit Court and attended a meeting of the Dutch Parliamentary Financial Audit Committee.
During my sabbatical year as a trainee in Paris (1993-1994), I attended conferences and seminars at the French Audit Court and the Île-de-France Regional Audit Chamber. From 1995 to 1996, I was seconded to Luxembourg where I worked as an attaché in the private office of the Greek Member of the European Court of Auditors. This gave me the opportunity to familiarise myself with European financial mechanisms and the significance of the new audit procedures, while making me more aware of the importance of international cooperation.
In addition, I have for many years taught European financial law at the Greek National School for the Judiciary and at many university faculties. In 2010 I was appointed Assistant Professor on Public Financial Law at the Pantheon University of Social and Political Science in Athens.
2. What are the three most important decisions to which you have been party in your professional life?
Firstly, I was actively involved in the drafting of Law 3871/2010 entitled ''Financial Management and Responsibility' making fundamental amendments to the previous national accounting system and introducing for the first time provisions regarding verification of sound financial management, compliance with international audit standards and accountability of public fund managers, fundamentally altering procedures for drawing up and implementing the Greek government budget. I was also appointed member of the legislative committee responsible for drafting Law 4055/2012 entitled 'Fair Proceedings and Reasonable Duration Thereof', making the Court of Auditors responsible for carrying out targeted audits, performance audits and systemic audits, as well as ensuring compliance by the audited body with instructions previously issued by it.
Secondly, I was appointed rapporteur for the Chamber of the Court of Audit for the delivery of a favourable opinion regarding a presidential decree limiting preventive audit of expenditure by government, public law legal persons and local authorities to amounts exceeding a certain limit. The Constitution had previously required preventive auditing of all government expenditure without exception and this restriction would greatly impact on accepted ideas and procedures.
Finally, I was rapporteur for the Chamber of the Court of Audit for a decision establishing municipal revenue audit criteria.
Independence
3. The Treaty stipulates that the Members of the Court of Auditors shall be 'completely independent' in the performance of their duties. How would you apply this obligation to your prospective duties?
Belonging to an auditing body composed of members of the judiciary, I am particularly sensitive to the Treaty provisions requiring Members of the Court of Auditors to be completely independent. This is necessary and is in the general interest of the European Union.
Furthermore, in public audit institutions in democratic countries, in particular audit courts or general audit services, independence is a fundamental organic, functional and, in many cases, constitutional requirement. Given that Members of the Court of Auditors are required to be fully independent (Article 286(1) of the Treaty on the Functioning of the European Union), I believe that their professional and social conduct must be accordingly be governed by this institutional precept.
As a prospective Member of the Court of Auditors, understanding as I do the need for complete independence in the discharge of my duties, it would be inconceivable for me to ask or accept advice from audited bodies, allow any form of dependence on them to develop by accepting gifts or favours. In this respect, it is not sufficient for my own conscience to be clear. It is also vital that no doubts or suspicions as to my independence could possibly arise in the mind of any impartial observer.
As a prospective Member of the European Court of Auditors, it is essential for me to remain independent in my relations with not only those being audited but also all those wishing to make use of my findings for political ends. This means neither seeking nor accepting instructions from any government (including my own) or other organisation. It is also necessary for me to refrain from any actions incompatible with my duties.
In this capacity, it will also be incumbent upon me to adopt the institutional guarantee of full independence as my personal creed and accordingly remain objective and independent in every way.
4. Have you received a discharge for the management duties you carried out previously – if such a procedure applies?
Since I have never carried out any management duties, there has never been any reason for me to receive such discharge.
5. Do you have any business or financial holdings or any other commitments which might conflict with your prospective duties? Are you prepared to disclose all your financial interests and other commitments to the President of the Court and make them public? In case you are involved in any current legal proceedings would you please give details?
I do not have any business activities or financial holdings or any other commitments which might conflict with my prospective duties as Member of the European Court of Auditors.
I am prepared to disclose all my financial interests and other commitments to the President of the Court.
Finally, I am not involved in any legal proceedings.
6. Are you prepared to step down from any elected office or give up any active function with responsibilities in a political party after your appointment as Court member?
Yes. I do not hold any elected office or have any active function with responsibilities in a political party.
7. How would you deal with a major irregularity or even fraud and/or corruption case involving actors in the Member State of your origin?
The fundamental priority of the European institutions is to protect EU budget resources and their duty is to guarantee the best possible use of taxpayers' money and above all prevent fraud and other illegal activities detrimental to the financial interests of the European Union. All such cases of irregularity, fraud and/or corruption, for example the evasion of duties and taxes payable to the EU budget or misuse of EU funds, are at the expense of the European taxpayer. A policy of zero tolerance should therefore be adopted in such cases.
As a prospective member of the European Court of Auditors, if audit activities carried out within my remit bring to light any a serious infringement of established rules or any suspicion of irregularity, fraud and/or corruption I will have no hesitation in calling for the matter to be brought to the attention of the Anti-Fraud Office in accordance with statutory requirements, with a view to having the matter investigated and appropriate penalties imposed, irrespective of the nationality of those involved, even if the case involves actors in my Member State of origin.
Performance of duties
8. What would be the main features of a sound financial management culture in any public service?
The problem currently afflicting the public sector is not the illegality of expenditure but wastefulness arising from expenditure complying with the letter of the law only but at the same time causing public funds to be squandered (albeit legally), for example on programmes which, while ostensibly meeting all formal requirements, are nevertheless unsustainable. This shows that compliance with statutory administrative practice does not always go hand-in-hand with proper use of public funds.
The basic criterion for mismanagement of public funds is dishonesty or wastefulness on the part of those entrusted with them and, by the same token, the basic criterion for sound management is efficiency. Given that public funds are generated by taxpayers' sacrifices, such use of private resources by the public authorities must be justified by reasons of public interest and the funds must be used efficiently for their intended purpose, which must be not only clearly specified but also achieved. It is not enough to show that public funds are being used with the public interest in mind. Tangible results must also be forthcoming.
The principle of proportionality lies at the heart of sound public financial management. This means that any financial sacrifices must effectively serve the public interest and that optimum use must be made of the necessary resources.
Verification of sound financial management accordingly begins where the other two forms of audit (verification that the accounts are true and fair and the underlying transactions legal and/or regular) and is distinct from both.
In the context of European law, the principles of sound financial management are embodied in both primary (Article 287(2) and Article 317 of the Treaty on the Functioning of the European Union) and secondary legislation (Article 30(2) of Regulation (EU, Euratom) No 966/2012). Verification of sound financial management is traditionally divided into three subcategories: economy, efficiency and effectiveness, as specifically defined in Article 30(2) of the abovementioned regulation:
(a) The principle of economy requires that the resources used by the institution in the pursuit of its activities shall be made available in due time, in appropriate quantity and quality and at the best price.
(b) The principle of efficiency concerns the best relationship between resources employed and results achieved.
(c) The principle of effectiveness concerns the attainment of specific objectives set and the achievement of the intended results.
In my opinion, for a public service to develop a culture of sound financial management in line with the above principles, the following conditions must be fulfilled:
(a) The relevant legal framework provisions must be clear enough to ensure that they can be properly implemented by officials and straightforward enough to be comprehensible to the general public.
(b) The objectives must be clearly set out and the responsibilities of the officials concerned accurately defined.
(c) Mechanisms for the free flow of data must be introduced.
(d) Mechanisms ensuring that public fund managers are accountable to the appropriate political authority must be in place.
(e) Reliable internal audit procedures are necessary to guarantee the effectiveness of the methods adopted by the service for attainment of its goals.
9. According to the Treaty, the Court shall assist Parliament in exercising its powers of control over the implementation of the budget. How would you describe your duties with regard to reporting to the European Parliament and its Committee on Budgetary Control in particular?
Article 287 of the Treaty on the Functioning of the European Union provides that the Court of Auditors shall assist the European Parliament in exercising its powers of control over the execution of the EU budget, particularly in the context of the discharge procedure confirming that the Commission has acquitted itself of its budgetary responsibility. This requires a high degree of cooperation between the two institutions based on mutual trust and respect, while maintaining a clear distinction between the tasks and responsibilities of each.
In reporting to the European Parliament and in particular the Committee on Budgetary Control in accordance with my duties as a prospective Member of the Court of Auditors, I shall personally endeavour to cultivate and develop a climate of sincere mutual trust and cooperation with Members so as to ensure that the Court is better able to provide Parliament with the requisite assistance.
Furthermore, I shall endeavour to contribute to a lasting climate of cooperation between the two institutions, encouraging an exchange of opinions and ideas in drawing up the Court's annual audit plan. This process must be expedited by means of regular meetings between the members of both institutions.
In order to ensure that the statement of assurance and special reports delivered by the Court of Auditors are useful to the European Parliament, in particular its Committee on Budgetary Control, I shall make a particular effort to guarantee that the observations and recommendations contained therein are clear, accurate, reliable and properly documented, identifying any illegal or irregular financial practices or other irregularities or systematic weaknesses and including performance audit assessments. Should any dispute arise, it will be necessary for me to take due account of to the objections of the audited body, so as to further guarantee the reliability of the findings.
As a prospective Member of the European Court of Auditors, I will make every effort to ensure that the European Parliament and its Committee on Budgetary Control are kept informed of the findings of the Court of Auditors in a spirit of fruitful dialogue and frank cooperation.
10. What do you think is the added value of performance audit and how should the findings be incorporated in management procedures?
The purpose of performance audit is to assess the quality and effectiveness of public policies before, during and after their implementation. Objective performance assessment must be carried out for the entire duration of public initiatives, evaluating input, achievements, outcomes and impact, that is to say long-term social changes owing at least in part to actions by the European Union. As indicated above, performance is assessed on the basis of the principles of sound financial management (economy, efficiency and effectiveness). Performance audit is an essential addition to traditional financial audit and verification of legality and regularity and a vital for programme budget control, its purpose being to ensure compliance with objectives, deadlines and administrative procedures and the earmarking of appropriate resources and funds in each case. Programmed objectives must be specific, measurable, attainable, realistic and time-bound (SMART) for all areas of activity covered by the budget.
I. In my opinion, the added value of performance audit, making it an essential instrument for present-day audit purposes, consists of the following:
(a) Performance audit is part of strategic programme planning with prioritised, specific and measurable objectives, establishing a clear relationship between the end and the means.
(b) Performance audit serves to remind financial managers of their responsibility to ensure efficiency and effectiveness in their administrative and financial decision making and implementation, so as to reduce ill-considered expenditure;
(c) Performance audit makes managers accountable to the relevant political authority.
As part of the internal audit process, the added value of performance audit is that the findings are submitted to the administrators of the requesting body, who may then decide what use to make of them.
On the other hand, the added value for the purposes of external audit resides in the fact that it is carried out by an outside body independent of the administration of the audited body (which establishes the scope and methods) and the findings of the audit are made available to not only the administration of the audited body but also the political body to which it is accountable, that is to say Parliament.
II. Performance audit findings should be turned to account and incorporated in administrative procedures as follows:
(a) Adoption by the audited body with the observations and recommendations contained in the special performance audit reports in respect of the systemic problems brought to light in the area covered by it (for example complexity or lack of clarity of legislation being implemented, errors and ambiguities in establishing programme objectives, insufficient attention to establishing SMART objectives or lack of suitable interim goals or target for the ultimate achievement of specific multiannual objectives).
(b) Regular monitoring and assessment by the auditing body of post-audit follow-up, adoption by the audited body of recommendations and submission of reports thereon to the relevant political body.
The European Parliament is kept informed of progress by the Commission and Member States regarding implementation of these recommendations. The European Court of Auditors has drawn up performance audit guidelines for verification of the Commission's financial management and of EU-funded programmes. The European Court of Auditors also verifies the Commission's self-assessment regarding achievement of performance goals in the annual management plans of the directorate-general concerned.
At a time of severe economic and financial crisis, performance audit could, in my opinion, be a particularly effective means of providing credible answers to any questions by European citizens regarding the implementation of public policies by the European Union.
Measures to improve financial management are being developed thanks to the European Parliament, the press and public opinion based on the information, arguments and recommendations contained in the reports of the auditing institution. The European Court of Auditors is able to bring its influence to bear by means of the message it sends out. The conviction and credibility of the democratic process is, in my opinion, fundamentally linked to the utilisation of performance audit findings, which should accordingly be readily comprehensible and useable as an integral part of democratic public debate.
11. How could cooperation improve between the Court of Auditors, the national audit institutions and the European Parliament (Committee on Budgetary Control concerning the audit of the EU budgets)?
I. Article 287(3) of the Treaty on the functioning of the European Union indicates that in the Member State the audit shall be carried out in liaison with national audit bodies. Given that the European Court of Auditors works independently and strictly in accordance with the provisions of the Treaty, it cannot be influenced by the willingness or unwillingness of national audit bodies to collaborate with it.
In my opinion, it is necessary to step up cooperation between the European Court of Auditors and national audit bodies, which have established a sustainable channel of communications between them, by means of:
(a) the Contact Committee of the European Court of Auditors and the chairs of the national audit bodies, which meets once a year for the purposes of establishing common audit guidelines.
(b) the liaison officers of the national audit bodies who have on-going contact with the European Court of Auditors;
(c) participation in the work of INTOSAI and EUROSAI, bringing national audit bodies from European and also non-European countries into contact with each other.
Cooperation between them is becoming more effective thanks to:
(a) the assistance of national audit bodies regarding spot checks by the European Court of Auditors of EU expenditure in the Member States;
(b) joint verification by the national audit bodies and the European Court of Auditors, an initiative which is still at the experimental stage;
(c) use by the European Court of Auditors on request of the verification data or findings of national audit bodies regarding EU revenue and expenditure.
Institutional cooperation between the European Court of Auditors and the national bodies must be stepped up in line with that existing between the European Court of Justice and the national courts.
To ensure compliance with the principle of subsidiarity and avoid duplication of controls more effectively the national audit bodies could audit EU funding in the Member States on behalf of the European Court of Auditors and reported to it. This would require harmonisation and coordination of audit procedures and a common European audit methodology. This could be achieved by means of seminars for the staff of national audit bodies concerning issues arising in connection with European financing and audit and closer involvement in the checks carried out by the European Court of Auditors in the Member States. This could lead to more constructive cooperation, given that national audit bodies are in position compile information about their own national procedures and are more closely acquainted with their national legislation and administrative practices.
Initiatives such as the introduction of a harmonised audit model to effectively combine external and internal control findings (single audit, opinion 2/2004 of the European Court of Justice), and own-initiative verification of EU-funded projects by national audit bodies, accompanied by a declaration to the relevant national authorities (Opinion 6/2006 of the European Court of Auditors), might be a way to promote more effective cooperation between the European Court of Auditors and the national audit bodies. It would also be possible to draw on experience required from joint audits by national audit bodies in given areas of EU interest. Recently (March 2013), on-going cooperation between the European Court of Auditors and national audit bodies in the euro areas was established in connection with public external European Stability Mechanism audit.
Collaboration between the European Court of Auditors and the national audit bodies could be organised on particularly effective lines by stepping up joint audit operations to achieve a closer cooperation for the mutual benefit of the auditors involved, through exchanges of information and experience.
At the same time, assistance by the European Court of Auditors for national auditing procedures (which is authorised under international auditing rules) is dependent on compliance with international auditing standards and proper implementation thereof by national auditing bodies. In any case, while cooperation is necessary, it should not become subordination. It is therefore necessary to ensure institutional parity between the European Court of Auditors and the national audit bodies.
II. It is no secret that the European Court of Auditors was set up on the initiative of the European Parliament and more specifically its Committee on Budgetary Control (chaired by Heinrich Aignet) which in 1973 had requested the creation of a European audit body. The European Parliament regarded the newly-created European Court of Auditors as an ally in carrying out wide-ranging verification of the Commission's activities and the European budget.
As a rule, the European Parliament supports the findings of the European Court of Auditors and calls on the other European institutions to follow its recommendations. In this way, the European Court of Auditors gives the European Parliament valuable assistance regarding the discharge procedure confirming that the Commission has acquitted itself of its budgetary responsibility.
To this end, the reports of the European Court of Auditors must be clear and well documented. Furthermore it must take account of Parliament's observations and recommendations contained in its discharge report and incorporate them in its audit planning.
Other questions
Would you withdraw your candidacy if Parliament's opinion on your appointment as a Member of the Court were unfavourable?
Yes. To ensure successful dialogue and cooperation between the European Parliament and the European Court of Auditors, it is of course essential for Members of the European Parliament (in particular the Committee on Budgetary Control) to have faith in the independence and professional abilities of the Members of the European Court of Auditors. If Parliament's opinion on my appointment were unfavourable, reflecting doubts as to my qualities in this respect, I would regard this as grounds for withdrawing my candidacy.
RESULT OF FINAL VOTE IN COMMITTEE
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Date adopted |
2.12.2013 |
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Result of final vote |
+: –: 0: |
14 5 3 |
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Members present for the final vote |
Marta Andreasen, Jean-Pierre Audy, Inés Ayala Sender, Zuzana Brzobohatá, Tamás Deutsch, Jens Geier, Gerben-Jan Gerbrandy, Ingeborg Gräßle, Monica Luisa Macovei, Jan Mulder, Eva Ortiz Vilella, Bart Staes, Georgios Stavrakakis, Michael Theurer |
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Substitute(s) present for the final vote |
Chris Davies, Cornelis de Jong, Monika Hohlmeier, Karin Kadenbach, Ivailo Kalfin, Markus Pieper |
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Substitute(s) under Rule 187(2) present for the final vote |
Zita Gurmai, Janusz Władysław Zemke |
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