Brussels, 6 November 2012
Overall error rate for EU spending below 4% for third year in a row: Court of Auditors' annual report
The overwhelming majority of payments made from the EU budget last year were free from quantifiable error. In its annual report, the Court of Auditors confirmed that, in 2011, the overall quantified error rate for EU spending remained stable, at below 4%. With regard to the EU's account keeping, it has been given a clean bill of health by the Court of Auditors for the fifth year in a row.
"Over the past few years, the Commission has delivered on its promise to ensure high quality management and control of EU funds. Our work is by no means finished, but now it is time for our partners to step up their game too," said Algirdas Šemeta, Commissioner for Taxation, Customs, Audit and Anti-fraud. "Member States can do this through two simple steps. First, they can endorse the simpler rules proposed by the Commission for the new programming period. Simpler rules are easier to respect and easier to control, and could help to drastically reduce the number of mistakes in EU spending. Secondly, I repeat my call for Member States to take their responsibilities more seriously when it comes to their role in protecting EU taxpayers' money. A little more effort by Member States to control projects properly and retrieve misused funds could go a long way, particularly in this time of economic difficulty."
Today's Court of Auditors' report confirms that the improvement in the management of EU funds over the past decade is being consistently maintained. This is particularly significant given that the current programming period is coming to a close. This meant that the volume of payments, and the reporting requirements that apply to them, increased substantially in 2011 compared to the last few years. And yet the error rate remained stable.
Errors do not mean that EU money is lost, wasted or affected by fraud. In fact, fraud affects only 0.2% of the total EU budget, and there are strong instruments in place to detect it so that the money can be recovered when it occurs. When the Court of Auditors refers to an error rate, it means that money should not have been paid out because a project did not meet the detailed rules making it eligible for EU funding. Where errors do occur, solid mechanisms are in place to detect and correct them.
The overall error rate for EU spending has been below 4% for 3 years in a row now, while areas such as external aid, development, enlargement and administration were again free from material error last year. The most significant improvement in 2011 was seen in cohesion policy, which funds projects to promote competitiveness and growth across Europe. Here, the error rate dropped by over 2.5 percentage points compared to 2010.
Agriculture saw an increase in its error rate compared to 2010, partly due to the fact that the Court included cross-compliance obligations in its calculation for the first time ever. In its report, the Court notes that the Commission had already identified the relevant problems in this area, and has undertaken corrective measures to ensure that the money is not lost.
The Commission has also put a lot of focus on simplifying the rules which would apply to EU funds. This will not only make EU funds more accessible to those who need them, but it would also make it easier to apply and enforce the rules related to EU spending, thereby reducing errors further.
The new Financial Regulation, which was adopted on 25 October 2012, already contains substantial simplification measures, as well as provisions which should improve controls on EU funds at every level.
The Commission's proposals for the next generation of programmes (2014-2020), which are currently being discussed by Council and Parliament, include a host of new measures to further improve the management of EU funds. These include stricter corrective measures if Member States fail to address irregularities on time; a new system for monitoring progress in achieving set targets; and a requirement for national management authorities to sign a statement of assurance on their accounts.
Following the publication of the Court of Auditors’ annual report, the Council will provide the European Parliament with a recommendation on whether or not to grant budget discharge to the Commission. Based on this recommendation, the European Parliament will vote on its discharge resolution for the 2011 budget in May 2013.
For more information, see MEMO/12/833