The EU’s outstanding commitments, which must be paid from future budgets, were “higher than ever”, at €238.8bn, and clearing this “backlog and preventing a new one” should be one of the priorities for planning spending in the period starting 2020, the European Court of Auditors said in its annual report today.

Although, the watchdog found the union had reduced its material errors and irregular spending further in 2016.

About half of the EU spending audited in 2016 was below the 2% threshold for material level of error, its revenue was free from material error and the accounts were in accordance with international public sector accounting standards, the court of auditors found.

“This year’s qualified opinion reflects an important improvement in EU finances,” said Klaus-Heiner Lehne, president of the European Court of Auditors.

He added: “Going forward, we will take a fresh look at how we audit the EU budget. We will take greater account of internal controls at the European Commission and in the member states, so we can better promote accountability and further improve the management of EU finances.”

“We will also increase our focus on performance to ensure EU citizens get value for their money.”

The report said the amount of payments the EU committed itself to making from future budgets was projected to continue to rise through 2020.

Entitlement payments, made to meet specific conditions, such as aid for farmers, grants to students and researchers and staff costs, accounted for about 49% of EU spending and had error levels below 2%, the report showed.

But the report found higher levels of error in reimbursement payments made through refunds.

Although the European Commission’s reporting on compliance is in line with their own results, the auditors recommend it increases its focus on performance and simplify the measurement tools in line with international standards of good practice.

The EU spending totalled €136.4bn in 2016, which amounts to 1% of EU gross national income and approximately 2% of total public spending in EU member states.

The auditors issued a ‘qualified opinion’ on the 2016 payments. The definition of this is when a ‘clean opinion’ cannot be given but the problems identified are not pervasive.

The 2016 EU accounts, on the other hand, were considered “true and fair”, the auditors said, which meant they were signed off with a ‘clean opinion’.

It is the first qualified opinion since the European Court of Auditors started providing an annual statement of assurance in 1994.