Auditors urge better control of EU funds

5 Nov 14
The European Union’s budget system is too focused on getting funds spent and needs to place more emphasis on achieving results, auditors have said.

Today, the European Court of Auditors signed off the EU’s 2013 accounts, but stressed that public expenditure management by both the 28 member states or the EU’s own bodies was not ‘not good’ enough.

Governments had adopted a ‘use it or lose it’ culture throughout the 2007-2013 spending period.

ECA president Vítor Caldeira said more incentives were needed to improve performance and to deliver value for money. Better long-term forecasts were also required to ensure sufficient funds are available for planned EU spending.

‘Just following the usual procedure will no longer be enough,’ he advised. ‘From now on, there has to be more careful management and control of EU funds.

‘The European Commission and the member states must pay more attention to how they spend our taxpayers’ money.’

The auditors said EU budgetary spending for 2013 was €148.5bn, equivalent to around 1% of EU gross national income and representing about 2% of total public expenditure of the member states.

They concluded that the collection of EU revenue was free from error, while the estimated expenditure error rate was 4.7%.

This did not reflect fraud, inefficiency or waste, the ECA said, but was an estimate of the money that should not have been paid from the budget because it was not used in accordance with EU rules.

Typical errors included payments to a company declared as an SME, which was in fact owned by a large company, or making additions to an existing pubic contract without giving other tenderers a chance to bid, the report said.

It added that most of the errors occurred in spending areas where management was shared between member states and the European Commission.

The two most error-prone spending areas were regional policy, energy and transport with a 6.9% error rate and rural development, environment, fisheries and health with a 6.7% error rate.

Across areas under shared management, the estimated error rate was 5.2 % compared to 3.7% for the spending programmes that were mostly directly managed by the commission. The estimated error rate for the EU’s own administrative expenditure was 1%.

The ECA concluded that, for a large proportion of the errors found, national authorities had sufficient information available to have corrected many of them before claiming reimbursement from the commission.

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