Well, now, how do we feel about the EU budget getting a fail again?

Not very positive, says HMG. But then all the previous HMGs said the same thing. They really did not like the fact that the Court of Auditors refused to sign off the accounts for the whichever time. They really did not and they were going to do something about it. This HMG, a.k.a. the Cleggeron Coalition is also intending to do something about it. It will do such things, as King Lear said. But what they are they know not any more than the silly old king did.
Lord Campbell of Alloway seems to have been asking this question year in, year out:

To ask Her Majesty's Government what assessment they have made of the grounds on which the European Union Court of Auditors has withheld approval of European Union budgets.

And year in, year out, HMG gave more or less the same response

My Lords, the Government are concerned that the European Court of Auditors has been unable to provide a positive statement of assurance for the 16th year in succession. The Government support the ECA's work but are concerned at the slow pace of reforms to EU financial management. The European Commission and member states are responsible for disbursing EU funds, and share responsibility for sound financial management. The Government take financial management seriously and will shortly publish a consolidated statement on the use of EU funds in the UK.

Well, that will be reasonably useful though it remains to be seen whether they will add the amount of money that had to be raised in matching funds for projects that the EU had decided on. Still, it does not deal with the problem of the not-signed-off budgets.

Lord Campbell has a solution:

May I by leave ask a question that perhaps the Government may accept? At their behest, by dint of diplomacy, will they seek an arrangement, be it by treaty or by some other means, to ensure that the ECA's decisions are always reflected, and that they are the only decisions reflected, in the contributions of all member states to the budget?

HMG, in the shape of Lord Sassoon, chose to ignore that and to blather instead:

My Lords, I reiterate that we take the situation enormously seriously. It is deeply unsatisfactory, but progress has been made. In their latest report, the auditors have been able to certify a greater percentage of EU expenditure as satisfactory than before. There are significant complications with anything that goes to changes in the treaty arrangements in this area, but the UK is leading by example by, for instance, producing this consolidated statement, which a number of other member states are now producing and which is welcomed by the Commission. We are adopting every route to try to get improvement. We are by no means complacent, nor should the European authorities be.

Then things got out of hand and even HMG found it impossible to agree wholly with Noble Lords who assured all and sundry that there was nothing really wrong with that budget.

Lord Williamson of Horton, for example, who has spent a good part of his distinguished career in Brussels, working for the Commission, rising to the heights of Secretary-General of the European Commission and has, no doubt, a handsome pension to prove it but sees no need to declare his interest, was anxious to set the record straight

My Lords, this is a good report. Does the Minister agree that, in relation to all the administrative expenditure of all the EU institutions, the court concludes without qualification that transactions were free from material error and that the supervisory and control systems complied with the financial regulation? Does he also agree that, in relation to other policies, the court rightly points out that there are some accounting errors and, in agriculture for example, some incorrect claims from member states, which the Commission will no doubt seek to correct and recover, but that this is not a finding of fraud?

What, one wonders, are those incorrect claims that must not be called fraud?

Lord Sassoon demurred:

My Lords, I can certainly confirm what the noble Lord says. This does not necessarily excuse anything. If around 50 per cent of expenditure nevertheless does not meet the standards, whether through laxities in accounting or administration of the expenditure, it excuses nothing. Indeed, the level of fraud itself, which has been much discussed, is nevertheless at a very low level. According to the work of the European Anti-Fraud Office, OLAF, the level of fraud has decreased from 0.2 per cent of expenditure in 2007 to 0.07 per cent in 2008.

Well, OLAF is not the most reliable of organizations in the world and, in any case, the rather flexible definition of fraud does allow the figure to be quite low.

Other interventions came from such luminaries as Lord Kinnock (who also failed to declare his interest, otherwise known as a handsome pension) and Lord Dykes, a reliable spouter of europhiliac nonsense. In this case, he was so anxious to get in and to prevent Lord Pearson from asking what might have been a difficult to answer question that all he could think of was to repeat the stuff about it being just administrative and clerical problems rather than fraud that prevented the budget being signed off. Lord Sassoon was quite tetchy in his response.