European Commission welcomes the European Court of Auditors’ decision to sign off the EU accounts for 13th year in a row
The Commission has today welcomed the decision of the European Court of Auditors (ECA) to give the EU annual accounts a clean bill of health for the 13th year in a row, finding them true and fair. In line with previous years, the Court has also acknowledged the revenue part of the EU Budget was well managed.
While taking note that the ECA has decided to modify its opinion on the regularity of expenditure this year, the Commission welcomes the Court`s assessment of the EU budget in several key policy areas. For example, in the field of cohesion and natural resources, which also includes agriculture, the budget was spent in a more correct way than in the previous year.
In 2019, 55% of the audited expenditure was represented by natural resources and administrative expenditure. In these areas, the estimated level of error identified by the Court was even below the ECA’s materiality level. This is the level above which auditors would conclude that spending is affected by a significant level of error. Overall, the level of error estimated by the Court on EU expenditure remains stable compared to last year.
Johannes Hahn, Commissioner for Budget and Administration, said: “The European Commission upholds the highest standards of transparency and accountability and is committed to ensure that every cent is spent in line with the rules and legal provisions. The Commission also continues to uphold the highest standards with regard to performance by constantly assessing and verifying whether programmes are on track to achieve their objectives and continue to be in line with political priorities. The comprehensive approach and methodology followed by the European Commission and the implementing partners in Member States according to the principle of shared management allow us to be confident in our management and control systems and in the effectiveness of the implementation of our spending programmes. Finally, it is about the protection of taxpayers’ money. We will continue to improve our risk-based approach, incorporating into our multiannual framework the recommendations by ECA while seeking to maintain the delicate balance between controls, administrative burden, costs, simplification and efficiency.”
The Commission has continued and will continue to work in the same direction, by the end of the current multiannual financial period and as of 2021, when the new long-term budget will start. The efforts of the Commission will continue to be directed in four main areas:
- Working together with Member States and implementing partners to guarantee each euro is spent in line with the rules.
The EU budget is implemented in a complex environment with a wide variety of partners across many countries. Inside the EU, our EU Member States are co-responsible for managing around 75% of the EU budget and play a key role in policy areas like cohesion and agriculture expenditure where most of the budget is channelled through the national and regional management authorities.
The Commission has strict rules regarding the good and effective management of the funds. We work hand in hand with Member States to guarantee that the budget is spent in line with these rules and that each euro from the EU budget goes where it is most needed.
The goal is to prevent errors from occurring – by making Member States detect, report and correct any irregularities early, so that they do not risk losing funds for which they would be entitled.
- Making the most out of every euro
Making sure that every euro out of the EU budget achieves the best results possible across policy areas is of key importance to the Commission. This is why we have directed a lot of efforts to make sure that the EU budget is not only spent in line with the rules but also finances projects that address EU-wide challenges and make a difference for a large number of people.
In the area of research for example, by the end of 2019 Horizon 2020 had supported more than 23,000 organisations in accessing risk finance, along with 5,522 high-quality research projects under the European Research Council and 44,000 innovations that include prototypes and testing activities. The Galileo programme, with 26 satellites in orbit, helps improving the accuracy and reliability of location services in the smartphones of more than 1 billion users worldwide.
The focus on EU added value is also at the heart of the Commission’s proposal for the long-term budget for 2021-2027. It seeks to set clearer objectives and focus more on performance. The goal is to make it easier to monitor and measure results – and to make changes when necessary. This is expected to further improve the way the EU budget is spent.
- Simpler rules to increase the effectiveness of EU funding
In the recent years, the Commission has worked to further simplify the rules under which the EU budget is spent, as simpler rules mean easier access to the funds and fewer management errors.
This has also been at the heart of the Commission proposal for EU’s next long-term budget. The Commission has put forward ideas to make the EU budget spending rules easier and expects that the concrete ideas will feature in the final compromises on the next long-term budget and NextGenerationEU.
- Recovering EU funds spent incorrectly
The Commission as a manager of the EU budget aims to ensure that, once a programme is closed and all controls are carried out, the remaining risk to the EU budget is below 2% – the level considered by the Court as material.
For this purpose, the Commission is monitoring the implementation of the EU budget on the ground. If Member States or final beneficiaries are found to be spending the EU money incorrectly, the Commission may recover funds to protect the EU budget. In 2019, the Commission estimates that, after such corrections and recoveries (amounting €1.5 billion in 2019), the remaining risk of error for the EU budget is below 1%.
Background
The publication of the Annual Report by the European Court of Auditors kicks off the annual ‘discharge procedure’ of the EU budget. To prepare the ground for the process, in July 2020 the Commission reported on the implementation of the EU budget in the Integrated Financial and Accountability Reporting package that includes the Annual Management and Performance Report. This reporting confirms that the EU budget in 2019 has delivered concrete results, helped achieve the political priorities of the European Union, created added value for EU citizens, and was spent in line with EU rules.
The estimated level of error is not a measure of fraud, inefficiency or waste. It is simply an estimate of the money already paid from the EU budget despite non-compliance with certain rules.
