The headlines will scream that the the EU's auditors have highlighted irregularities in EU spending for the 12th year running in their annual report.

In fact, as in previous years, the auditors will declare the accounts reliable overall, but criticise the way some funds have been spent on the ground - by the EU's 25 member states rather than the European Commission.

Spending on EU administration is actually expected to get a clean bill of health, with the auditors praising new monitoring systems.

Like all large organisations (for example, the Department of Work & Pensions, which has not had its accounts - for its far larger budget - approved for even longer than the EU), the auditors cannot certify that every single item of expenditure has been in accordance with all the relevant procedures. But what they are talking about is not normally fraud, but mistakes in the paperwork, timing or procedure.

This time, the European Commission is apparently set to try to rebalance the media slant, and even to do the unthinkable: criticise the Court of Auditors for its methods and its presentation.

I gather (from the BBC) that the Commissioner for Administration, Audit and Anti-fraud, Siim Kallas, is expected to respond by saying that the Court of Auditors Report:

* Ignores the fact that money mis-spent one year is normally clawed back the next year. If you lose your wallet, but get it back with the money inside, you do not count it as a loss.

* Considers money lost even when it may have been spent as intended - if say, a grant recipient makes a minor mistake with the paperwork

* Refuses to name which member states are lax in controlling use of EU funds

In 2005, Mr Kallas says, the Commission clawed back 2.17bn euros (£1.45bn) from member states, and wrote off 90million euros (£60million).

It will be interesting to see whether the Commission's efforts result in any better balance in the reporting of this issue!


Background:

A positive verdict from the auditors on the reliability of EU accounts means that all transactions, assets and liabilities have been completely and accurately recorded.

A negative verdict on the regularity and legality of transactions in one area of spending or another means that there is insufficient evidence that funds have been spent in accordance with the rules.

Most of the problems occur with payments made by member states, because 76% of EU payments are delegated to them, but efforts are under way to encourage them to exercise greater care when spending EU funds.

An agreement was reached in April requiring the member states to produce an annual assessment, starting next year, of the way EU spending has been controlled at national level.