While the EU’s accounts for the financial year 2020 present a ‘true and fair view’ of its financial situation and revenue is considered free of errors, the expenditure section still contains too many irregularities, according to the Court of Auditors’ annual report published on Tuesday 26 October.
In addition, for the second year in a row, the auditors gave an adverse opinion on expenditure. They identified some of the risks and challenges relating to the implementation and good financial management of the funds made available by the EU in response to the Covid-19 crisis.
Klaus-Heiner Lehne, President of the Court of Auditors, presented the conclusions of the annual report on the 2020 budget to the members of the European Parliament’s Committee on Budgetary Control on Tuesday.
The European Parliament rapporteur on the implementation of the 2020 budget, Olivier Chastel (Renew Europe, Belgium), found the report “a source of concern” regarding the management of the budget.
The error rate (2.7%) is the same as it was for the 2019 budget, “but no field visits were made in 2020”, due to Covid-19. “This suggests an actual error rate greater than 2.7%”, claimed Mr Chastel.
“The error rate is still very high in a number of areas, such as competitiveness, cohesion and all high-risk expenditure (4% error rate in this case). The errors in expenditure are significant and widespread”, the rapporteur noted.
Mr Chastel also noted that the Court reveals “a lack of reliability of the data examined, particularly in the Cohesion Fund”.
Significant error level. The Court of Auditors’ report shows that “at 2.7%, the overall level of error in expenditure was significant”. ‘Cohesion’ was the sub-heading that contributed most to this rate (41.8%), followed by ‘Natural Resources’ (29.3%), then ‘Competitiveness’ (15.5%) and ‘Europe in the World’ (8.1%).
High-risk expenditure, mainly based on reimbursements, continues to show a significant level of error. “These expenditures represented 59.0% of the population we examined”, according to the report.
Taking into account the results of the tests carried out on high-risk expenditure pursuant to all sections of the Multiannual Financial Framework (MFF), “we estimate the level of error for this type of expenditure to be 4.0%” (whereas in 2019 it was 4.9%), the report states.
Recoveries. In 2020, the amount of corrections mentioned (€1.098 billion) is considerably lower than that indicated for 2019 (€2.885 billion).
According to the European Commission, this decrease is due to repayments of corrections from previous years in the field of agriculture following judgements passed by the EU Court of Justice, as well as the high closure rate of cohesion policy programmes from the 2007-2013 period. Net corrections and recoveries made by the Commission in 2020 (i.e. the amount collected and ultimately corrected) totalled €557 million, the Court’s report says.
Fraud. The report also notes that in 2020 the Court reported six cases of suspected fraud to the European Anti-Fraud Office (OLAF) (nine in 2019), which led to six investigations by OLAF. OLAF made recommendations for the recovery of a total of €536 million in 37 cases.
The UK owes €47.5 billion. The Commission estimated that at the balance sheet date the UK owed the EU €49.6 billion, while the EU owed the UK €2.1 billion. The UK therefore owes a net sum of €47.5 billion, according to the Court of Auditors’ report.
Link to the report: https://bit.ly/317rwoJ (Original version in French by Lionel Changeur)