North East civil servant errors lead to £8m fine

Mar 27 2009 by Adrian Pearson, The Journal

THE European Commission is to fine the Government £8m as a result of decade-old accounting mistakes by North East civil servants.

Experts fear the fine, alongside others for Northern regions, could leave a recession-hit Government forced to divert cash from nationwide regeneration schemes.

Officers in the region tasked with handing out European Regional Development Funds were subject to a rigorous audit inspection after spending around £500m in EU cash between 1997 and 1999.

When inspectors first looked through the accounts they raised concerns which led to the Government setting aside nearly £100m to cover financial corrections in the North East and North West.

Since the audit began staff at Government Office North East, the department then responsible for the spending, have provided further detailed accounts to prove strict EU guidelines were met.

The demanding standards applied by the European auditors meant everything from timesheets and bus tickets had to be handed over for any of the projects examined, often involving records left untouched for years.

And harsh EU rules mean any error found in one project leads to a financial correction applied to the entire scheme.

Civil Servants at Government Office have been backed by Europe minister Caroline Flint, who previously told The Journal that the “financial correction” was a paperwork issue which would not impact on regeneration cash.