The Court also detected fewer errors across all areas of spending than in the past, and the final overall level of error for 2016 is considerably lower than for the previous year. For roughly half of EU spending, the error rate did not even reach the level considered by the Court as material. No errors were found on the revenue side of the budget. This allowed the Court to upgrade - for the first time - its opinion on payments to "qualified".
Commissioner Günther H. Oettinger, in charge of budget and human resources, said: "The report of the European Court of Auditors shows that our efforts bear fruit – the EU spending is becoming even more effective, to the benefit of citizens and businesses. Of course, we will not stop there – we will continue working with Member States and beneficiaries because every euro from the EU budget counts."
In its 2016 Annual Report published today, the European Court of Auditors underlines important improvements in the way the EU budget is being spent. The Court also encourages the Commission to continue focussing on performance and simplification, thus endorsing the Commission's direction of travel.
Simplification – a tool to achieve better performance
Simpler rules reduce errors and increase the effectiveness of EU funding. In September 2016, the Commission presented an ambitious proposal to simplify its financial rules. Negotiations on the final set of rules are currently ongoing between the European Parliament and the Council, with adoption expected soon.
The efforts of the Commission do not stop there. Further simplification is at the heart of the discussions on the future long-term budget, triggered by the publication of the Reflection paper on the future of EU finances in June 2017. To further feed the debate, earlier this year a group of independent policy experts, chaired by former Commissioner Siim Kallas, made further proposals how to simplify access to EU funds in the future.
Added value of EU spending
An important way to make EU spending more effective is to ensure that every euro from the EU budget generates added value. This is crucial at a time when the EU is doing more than ever before to protect, empower and defend its citizens, whilst resources continue to be stretched at the seams. How to generate higher EU added value is one of the key questions in the debate on the future of the EU finances. The conference on the same topic, which the European Commission organised on 25 September 2017, sought to identify possible answers.
Intensified work with Member States
Member States manage 80% of spending under the EU budget and the Commission is working closely with them to ensure money is spent effectively and efficiently. The Commission is sharing good practices, providing guidance and organising trainings for national authorities which spend EU funds on the ground. The goal is to prevent errors from occurring – by making Member States detect, report and correct any irregularities early, so that they do not risk losing funds to which they would have been entitled.
Recovering EU funds if spent incorrectly
If EU money has nevertheless been spent incorrectly, the Commission takes measures to correct it - in 2016 the Commission clawed back €3.4 billion. In its 2016 Annual Management and Performance Report, the Commission estimated that, when taking into account the impact of future corrections and recoveries, the amount actually being at risk will be less than 2% of the total relevant expenditure.
The publication of the Annual Report by the European Court of Auditors kicks off the annual 'discharge procedure' of the EU budget. To prepare the ground for the process, in July 2017 the Commission adopted its Annual Management and Performance Report on the implementation of the 2016 EU budget. This report confirms that the EU budget in 2016 has helped achieve the political priorities of the European Union, has created added value for the EU citizens and was spent in line with EU rules.
The estimated level of error is not a measure of fraud, inefficiency or waste. It is simply an estimate of the money already paid from the EU budget despite non-compliance with certain rules.
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