Brussels, 05/11/2013 (Agence Europe) - Looking at the EU budget as a whole, the most likely error rate in payments increased from 3.9% in 2011 to 4.8% in 2012, according to the annual report of the EU Court of Auditors, published on Tuesday 5 November. For EU operational spending, the Court says “payments continue to be materially affected by error”. It goes on to add that the most likely rates of error estimated by the Court for agriculture, regional policy, rural development and employment and social affairs have all increased since 2011. Rural development remains the spending area most exposed to error, with an error rate estimated at 7.9%. After this comes regional policy, with a 6.8% error rate.
Estimated error rates have also increased in “research and other internal policies and external relations, aid and enlargement”. In these last cases, the increase is partly due to improvements of a methodological nature introduced by the Court for the 2012 audit. The Court's samples of transactions in these areas no longer include advance payments made during the year. In other words, they comprise interim payments, final payments and advances that were cleared during the year. This change is in line with the principles of accrual accounting, thus providing, the Court believes, a better picture of the underlying reality of EU financial management.
The second methodological improvement relates to the treatment of serious failures to apply procurement rules. From 2012, EU institutions and bodies have been treated in the same way as member state authorities. These changes improve comparability between different policy groups and they will improve comparability over time. Together, they add 0.3 percentage points to the Court's overall estimate of the most likely error rate in 2012 compared to 2011.
The Court feels 95% certain that the rate of error affecting payments is between 3% and 6%.
The president of the European Court of Auditors, Vitor Caldeira, said that these errors are not specific to any one area of the budget. All policy groups covering operational spending are affected by a significant rate of error. Administrative spending is the only area in which a significant error rate has not been noted. Caldeira explained that “EU accounts are reliable, as they have been since 2007. Revenue and commitments underlying the EU accounts are legal and regular in all material respects but payments continue to be materially affected by error”.
Caldeira also said that the Commission is not able to provide “sufficient, relevant and reliable evidence on what the EU's policies have achieved in a way that is suitable for the purposes of the discharge procedure”. As in previous years, the supervisory and control systems the Court examined are only partially effective in ensuring the legality and regularity of payments when EU expenditure is incurred, he said.
In 2012, the EU spent €138.6 billion, approximately 80% of which was jointly managed by the Commission and the member states. Caldeira gave details, saying: 1) over two thirds of the estimated error rate pertains to the ineligibility of claims for payment and serious failures to respect procurement rules; 2) the highest contribution to the error rate comes from the areas where most money is spent, namely regional policy, agriculture, rural development and employment and social affairs; 3) the proportion of transactions affected by error is high in these policy groups, ranging from 35% up to 63%; and 4) national authorities could have corrected over half of the errors before submitting claims for reimbursement to the Commission. The Court notes the errors are not confined to expenditure which is jointly managed by member states. According to the Court's calculations, the estimated rate of error affecting shared management spending is 5.3% compared with 4.3% for all the other kinds of operational spending.
The substantial difference between credit appropriations and payment appropriations, together with the considerable under-use of appropriations at the beginning of the current programming period, has entailed an accumulation of unused commitments equivalent to two years and three months (€217 billion end 2012). This situation has led to pressure on the budget for payments. At the end of the 2012 financial period, all outstanding commitments and liabilities needing to be funded together amounted to around €313 billion. In the Court's opinion, the Commission should plan for its future cash-flow requirements by preparing and publishing a long-range cash-flow forecast. (LC/transl.jl)