EU auditors find an increase in errors in community spending for the third year in a row

BRUSELAS, 5 Oct. (EUROPA PRESS) -

The Court of Auditors of the European Union has warned that the overall level of errors in spending from the EU budget increased in fiscal year 2022 to 4.2%, compared to the level of 3% recorded in 2021, which which has led the auditors to issue an unfavorable opinion on community spending in the last financial year.

As in the last three years, the auditors conclude that the level of error was material and widespread and have issued an unfavorable opinion on EU spending in 2022.

66% of audited expenses were considered high risk, which represents an increase compared to 63.2% in 2021 and compared to previous years.

The estimated level of error is not an indicator of fraud, inefficiency or waste, but rather an estimate of funds that were not used in accordance with national and EU rules, although, in the course of their work, the auditors also identified 14 cases of alleged fraud and reported them to the European Anti-Fraud Office (OLAF), which has already launched two investigations. Six of these cases were also reported to the European Public Prosecutor's Office, which launched three investigations.

The President of the Court, Tony Murphy, highlighted that the EU "has demonstrated its ability to respond quickly to a series of unprecedented crises with unprecedented actions."

However, he added that the significant amount of funds available in such circumstances implies "greater budgetary risk", which is why the auditors' findings indicate that "it is necessary to better manage the risk" since they continue to detect "errors that cause a significant increase in affected spending."

The auditors annually audit the EU's income and expenditure and examine whether the annual accounts are reliable, and whether the income and expenditure transactions comply with applicable regulations.

An "unfavorable" opinion means that the auditors have detected widespread problems and to give their opinion, the auditors check samples of transactions that allow them to obtain statistical estimates of the extent to which spending under the EU budget is affected by errors.

Thus, they measure the estimated error level for this expense with respect to a 2% threshold, above which irregular expenses are considered significant.

In 2022, total EU budget expenditure amounted to €196 billion, equivalent to 2.5% of the total expenditure of the public administrations of the EU Member States and 1.3% of their gross national income.

Taking into account the expenditure of the recovery and resilience mechanism, EU payments in 2022 amounted to €243.3 billion, while approximately three quarters of the EU budget was spent under shared management, under the which Member States distribute funds, select projects and manage EU spending.

Regarding the recovery and resilience mechanism, in 2022, its second year of implementation, 13 grant payments worth €46.9 billion were made to eleven Member States.

Auditors found that 11 of the mechanism's 13 grant payments were affected by regularity issues, with 15 of the 281 milestones and targets examined either not being satisfactorily met or not meeting grant conditions. Consequently, six payments were affected by material errors.

In addition, the auditors identified cases of poor design of measures and underlying milestones or objectives, as well as issues relating to the reliability of the information that Member States included in their management statements. Therefore, the auditors issued a qualified opinion on the expenditure of the recovery mechanism.