European Union payment to Gaza civil servant salaries should be stopped because the payroll includes people who do not work, the European Court of Auditors said on Wednesday in Brussels.“Our suggestion is to discontinue the [EU funding] program for employees in Gaza and to redirect the funds to the West Bank,” EU auditor Hans Gustaf Wessberg told reporters at a press conference.The recommendation was part of a 36-page report produced by the court that examined a program – Mécanisme Palestino – Européen de Gestion et d’Aide Socio-Économique (Pegase) – through which 1 billion euros have gone to the PA for civil servant salaries over the last five years. According to Wessberg, this sum represents 20 percent of the civil servant salary bill.The report said that it had not quantified the extent of the problem with the Gaza payroll, but it noted some specific examples.According to 2010 data, 22% of the employees in the Gaza Health Ministry and 24% of its Education Ministry drew salaries even though they were not working, the report stated.Wessberg said the audit’s findings were not political, nor did they take into consideration the political impact of the court’s recommendations.“We are not here to draw any political conclusions. We audit what we see and our suggestions are based on our findings,” Wessberg said.Corruption, he said, was not the root of the problem with regard to the Gaza payroll. The court’s recommendation, he said, was based on the fact that the funding went to people who were not working.The practice of paying Gaza civil servants who don’t show up to work, he said, “is not within the agreement and should be discontinued. this is an auditor’s perspective.”He also said that EU tax money had not gone to pay salaries of any Palestinians who had participated in terror activities.The Court of Auditors has only the power to issue recommendations.Any decision to halt EU payment for Gaza civil servants would have to be made at the political level.The EU Commission said in response that it believed “the PA must continue supporting its workers in Gaza as a key element of maintaining its presence in Gaza and the unity of a future Palestinian state. A solution has to be found that takes account of the concerns raised by the court, while allowing the PA to continue supporting its employees in Gaza.”Outside of Gaza, the court’s report also took issue with a 2.5m. euro VAT refund to a barely operational luxury hotel in Gaza, when the average payment to companies was 59,864 euros, the report said. The audit said it had been “unable to establish how Israel and the PA had used approximately 90m. euro that Pegase DFS paid for VAT and excise duties on fuel to enable the production of electricity at the Gaza power plant.”Wessberg also called on Israel to do more to facilitate Palestinian access and movement for people and goods in the West Bank and Gaza.The report called on the PA to do more to reform its civil servants program and chastised the EU Commission for not using the Pegase program as leverage to force the PA to make necessary changes.A change in the system is needed because donor funding is dropping and the number of civil servants is rising, the report said.Overall, the EU provided the PA with 451,700 euros of financial assistance in 2012, a drop from the 563,300 euros it gave the PA in 2007.Out of this sum, in 2012, 152,660 euros went to Pegase, a drop from the 235,770 euros the EU gave to Pegase in 2007.The Netherlands has given 40.3m. euros to the program in the last five years and is the largest contributor, but it, like all other EU countries, has significantly dropped its support for the program.Last year, it gave only 6.5m. euros to the program.The EU Commission said that changes had already been made to the program since the auditors completed their investigation at the end of 2012.“By helping the Palestinian Authority to meet its wages and pensions bill for essential service providers and pensioners, and pay for social allowances to most vulnerable groups, the EU is making a tangible contribution to the preparation for a two-state solution to the Israeli-Palestinian conflict,” the commission said.