Referring to the covid-19 crisis and the EU’s forthcoming 2021-2027 budget, Klaus-Heiner Lehne, president of the European Court of Auditors, wrote in its 2019 annual report, issued this week: “All EU institutions must now build on past efforts to improve the Union’s financial management further and make sure that the EU delivers.” Pictured: Klaus-Heiner Lehne speaks at the European Parliament, 23 October 2019. Photo credit: European Parliament
The European Court of Auditors usually tests EU institutions, member states and development agencies, but on Thursday the ECA marked up its own 2019 report card.
More than 97% of EU spending is “free from error” and more than 95% of its proposals are followed, the ECA concluded.
The ECA checks that EU funds are spent according to European rules, measures the effectiveness of EU programmes, and makes recommendations to outfits spending EU money on how to improve their internal processes.
Although much of its work is done at its headquarters in Kirchberg, the watchdog’s 2019 annual report said ECA auditors spent 3,605 “person days” on-the-ground inspecting the books at organisations handling EU funds. The vast majority of this time (a total of 3,160 days) was audits held in EU member states, including in Italy (430 days), Poland (345) and Germany (316), as well as in Luxembourg (8), Cyprus (7) and Malta (5).
In Luxembourg, the ECA examined EU institutions including the European Investment Bank, Translation Centre and Chafea.
The ECA found that, overall, there was an error rate of 2.6% on spending in the €156.7bn 2018 EU general budget. The target is 2%, but the ECA gave a passing grade. (The rate was nearly 4% in 2016.) An “error” does not indicate fraud; it merely signals that proper procedures were not followed.
The ECA does not specifically search for fraud, but it does find suspicious behaviour during its checks. The outfit reported 10 suspected cases to the European Anti-Fraud Office (OLAF) in 2019, up from 9 in 2018.
The ECA commented that its advice on improving processes has been listened to. The 2019 annual report stated that its internal:
“… analysis showed that 96% of the recommendations we made in our 2015 annual report and 94% of the recommendations in our 2015 special reports had been implemented either in full, in most or (at least) in some respects.”
A survey of external stakeholders found that “88% consider our reports useful for their work”.
The ECA employs 853 people, mostly in Luxembourg. 63% of its staff are auditors. Its 2019 budget was €147m.