ECA calls for ‘robust and efficient management’ of Coronavirus recovery package

The demand by the European Court of Auditors, the EU’s spending watchdog, comes after publication of its annual report for the 2019 financial year.
Adobe Stock

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

10 Nov 2020

The European Court of Auditor’s (ECA) report was presented to Parliament’s budgetary control committee on Tuesday.

Speaking at a news conference, ECA President Klaus-Heiner Lehne said the overall level of irregularities in EU spending has remained “relatively stable” at 2.7 percent in 2019, compared with 2.6 percent in 2018.

But the former EPP MEP said this figure “masks considerable differences” and that the level of error is “pervasive.”

The auditors signed off the EU accounts but also issued what is called an “adverse opinion” on expenditure. An “adverse” opinion indicates widespread problems.

They also voiced concern about so-called “high-risk” expenditure that, in 2019, represented more than half of the audited spending (53 percent), an increase on 2018.

In 2019, EU spending totalled €159.1bn, the equivalent of 2.1 percent of Member States’ public spending and 1.0 percent of EU gross national income.

The auditors also look ahead to the next EU budget, which is set to rise sharply with a temporary recovery instrument, ‘Next Generation EU’, addressing the economic and social impacts of the COVID-19 crisis.

As a result, in the next few years EU spending will be significantly higher.

Lehne said, “Our adverse opinion on EU spending for the year 2019 is a reminder that we need clear and simple rules for all EU finances, and we also need effective checks on how the money is spent and whether the intended results are achieved.”

“This is particularly important in view of the planned recovery fund to combat the effects of the COVID-19 pandemic. In these times of crisis, the European Commission and the Member States have a tremendous responsibility for managing the EU’s finances in a sound and efficient way.”

“Our adverse opinion on EU spending for the year 2019 is a reminder that we need clear and simple rules for all EU finances, and we also need effective checks on how the money is spent and whether the intended results are achieved” Klaus-Heiner Lehne, ECA President

Cohesion spending, a huge chunk of EU funds, accounted for 23 percent of funds audited and Lehne points out that some 75 percent of cohesion funds are managed by Member States.

But there is still a need for “effective checks” on how the money is spent.

He told reporters, “We will see a doubling of EU spending in the coming years with the MMF and the EU only has a single chance to get this right.”

Lehne also revealed that nine “suspicious” cases of misuse of EU funds has been sent to Olaf, the anti-fraud office, already this year (out of 747 transactions).

Replying to a question from this site, he said, “We have a legal obligation to do this kind of audit, but we focus on big spending areas where we think there is a high risk.”

He also called for more resources for the ECA, saying, “We will look at the final results of the MMF but if legislators expect more from us then this will be difficult with the current resources we have. If we don’t get more resources then our capabilities will continue to be limited.”

“We have sufficient resources to do the job we are doing now but the question is what happens if we get new tasks. It is a problem.”

The ECA currently has 900 staff based in Luxembourg.

He said, “Over the last 20 years the management of EU funds has massively improved and this is due in part to what we have done at the ECA. There has been a lot of progress and the annual report we produce does have an impact, but things are far from being perfect.”

He accepted that “trust in the EU’s finances and that they are used efficiently and in the right way” is a particularly important issue.

“Trust is the key factor and role of the ECA is to provide a clear picture of how EU finances are managed.”

ECA member Tony Murphy also told reporters, “I’d prefer if the annual report was taken more seriously at Member State level, but the Parliament and Commission do take it very seriously and take actions to follow up recommendations.”

“We have to get our main messages across in a simplified way but, yes, trust has never been more important,” said the Irish official.

“It is vital that there is an objective, independent body such as the ECA to hold the EU to account and say where things could be done better. We have to remember though that much of this money is spent at Member State level.”

Read the most recent articles written by Martin Banks - Poor air quality causes over 400,000 premature deaths in EU each year

Categories

EU Institutions
Share this page