A damning report, published today, addresses problems with public procurement in the EU. Between 2007 and 2013, €349bn was allocated regional policy via the European Regional Development Fund, the Cohesion Fund and the European Social Fund.
However, auditors found errors in around 40% of projects in which public procurement was reviewed. The ECA found serious errors in how contracts were competed for and then awarded because of “unjustified urgency”.
“Improving the efficiency of public spending and achieving value for money are central objectives for government. Rules have been set up at various levels of government to ensure the best possible use of public funds where public purchasing takes place,” the report said.
“Even though the European Commission and the member states have started to address the problem, there is still a long way to go.”
At the beginning of 2015, member states were required by the commission to carry out a self-assessment on how and whether they met public procurement conditions in the spending period 2014 to 2020. These include setting up the right bodies, training staff to run public procurement systems and arrangements to ensure contract award procedures are transparent. Auditors found that about 12 member states had not yet fulfilled these conditions.
“These conditions are regarded as necessary prerequisites for effective and efficient use of EU support,” the ECA said.
“If these conditions are not being fulfilled by the end of 2016, the commission should suspend 2014-20 payments to the member states concerned, until they have rectified the shortcomings.”
Phil Wynn Owen, the ECA member responsible for today's report told Public Finance International that auditors had visited four member states – Czech Republic, Spain, the UK and Italy – where high numbers of public procurement errors had been detected.
“The ECA is keen to see continued efforts ... the commission and member states need to intensify efforts to deal with the high numbers of public procurement errors occurring in EU spending every year,” he said.
The auditors suggested that a high-level group be set up to provide leadership in tackling the public procurement errors and to promote simplification.
While the European Commission has drawn up a plan to address procurement weaknesses, the ECA said this should be published and progress reported annually.
Responding to the report the European Commission said it wanted to to reduce the risk of payment suspension, but would “not refrain from using this tool of suspension if the targets and milestones of the action plan are clearly not met”.
