By Nick Mann | 6 November 2012
The European Union’s accounts for last year fairly present its financial position but show ‘too many’ examples of money not being spent properly, the European Court of Auditors said today.
For the fifth consecutive year, the ECA issued an unqualified opinion on how the EU managed its budget, which last year amounted to €129.4.bn. Accounting for revenue and commitments for payments were ‘free from material error’, the auditors found.
But there was a 3.9% error rate in how the EU spent its budget, up from 3.7% in 2010. ECA president Vítor Caldeira said: ‘Put simply, the court found too many cases of EU money not hitting the target or being used sub-optimally.’
These include subsidies being claimed for farmland that was actually densely forested and training funds intended for electronics industry workers being used for other sectors. The ECA also highlighted examples of public procurement procedures not being properly applied and over-claiming of personnel costs on research projects.
Caldeira explained: ‘The court found errors in payments related to many different expenditure programmes and schemes. It found that, overall, the control systems examined were only partially effective.
‘In other words, control systems were not realising their full potential to prevent or detect and correct errors.’
Five out of seven areas of spending were affected by ‘material error’, with rural development and regional policy payments the most error-prone areas.
Individual EU member states should do more to prevent this problem, the ECA said. ‘There needs to be a greater degree of commitment on the part of national authorities to the management and control of EU money,’ Caldeira said.
‘National authorities operate the first – and most important – line of defence in protecting the financial interests of EU citizens.’
Algirdas Šemeta, the European commissioner responsible for taxation and customs union, audit and anti-fraud, claimed the ECA’s report showed the EU’s accounting system was ‘a solid and reliable basis for preparing our accounts’.
The 3.9% error rate for payments meant that more than 96% of the 2011 budget was ‘free from errors with a financial impact’, he said.
‘This is encouraging not only because it confirms the sustained improvements introduced during the past five years but also considering that this stable result has been achieved even though the risk-profile of the transactions increased in 2011,’ he added.
‘Indeed, not only the volume of payments grew but there were many more interim and final payments which are subject to more complex rules and conditions and, therefore, more prone to error.’
The ECA report comes as discussions continue at both national and European level on the EU budget for 2013, with disagreements over whether member states should increase, freeze or cut its spending power next year.
