Commissioner Günther H. Oettinger, in charge of budget and human resources, said: "I welcome the Court's findings; the report proves that we spend our money well. The EU budget is small - but it makes a big difference for millions of Europeans. It is a unique tool to protect, empower and defend our citizens in a fast-changing world where many of the most pressing issues go beyond the borders of a single country. This is also why the European Commission is working hard to make sure that the EU budget is focused on creating a real added value. Of course, to continue delivering results for citizens across the EU after 2020, we need the support of the European Parliament and the Council for a timely adoption of the next long-term budget."
The Commission's aim as a manager of the EU budget is to ensure that, once a programme is closed and all controls are carried out, the level of error remains below 2% – the level considered by the Court as material. This has been achieved in 2017, as the error rate reached an all-time low level. The Commission estimates that, after corrections and recoveries, the remaining level of error for the 2017 expenditure will be below 1%.
Ongoing cooperation with Member States
Member States manage around 75% of EU spending, and the Commission is working closely with them to ensure money is spent effectively and efficiently.
The Commission has taken a series of steps to support Member States to programme funds under shared management as early as possible in the programming period, to timely complete projects and submit the invoices for reimbursement. 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 be entitled.
The updated Financial Regulation foresees even more intense cooperation between the European Commission and national authorities, which should lead to an even more effective spending and better controls.
Simpler rules to increase the effectiveness of EU funding
Simpler rules reduce errors and lead to greater added value for the EU citizens. Access to EU funding under the current long-term budget for 2014-2020 is already easier compared to the past. In the spring of 2018, the European Commission, the Parliament and the Council agreed on a new set of financial rules – the Financial Regulation, which reduce red tape even further.
The Commission's work does not stop there. Simplification is at the heart of the Commission's proposal for the next long-term budget of the EU. The Commission is now working intensively together with the European Parliament and the Council to have an agreement in principle before the European elections in 2019 in order to allow for the new programmes, from Erasmus to research funding or supporting our regions, to start on time.
Focus on the added value of EU spending
Generating an added value out of every euro spent has been of key importance to the Commission in the recent years. Already in 2015, the Commission outlined a series of actions in four priority areas to further maximise the added value of EU spending.
The focus on EU added value is at the heart of the Commission's proposal for the Multiannual Financial Framework for 2021-2027. It seeks to set clearer objectives and focus more on performance. The goal is to make it easier to monitor and measure results – and to make changes when necessary. This is expected to further improve the way the EU budget is spent.
Recovering EU Funds spent incorrectly
The Commission is monitoring the implementation of the EU budget on the ground. If Member States or final beneficiaries are found to spend EU money incorrectly, the Commission takes recovery measures. In 2017, the Commission clawed back €2.8 billion, equal to 2.1% of the payments to the EU budget. As a consequence, the amount actually being at risk would below the 2% threshold once corrections and recoveries have been taken into account.
Qualified opinion on the 2017 payments
The Court has given, for a second year in a row, a qualified opinion on the 2017 payments – only one notch below the clean opinion. The report thus shows further improvements in terms of compliance and performance, and confirms that the Commission is on the right path.
While a clean opinion means that the figures are true and fair, a qualified opinion comes to say that there are only minor issues still to be fixed.
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 June 2018 the Commission adopted its Annual Management and Performance Report on the implementation of the 2017 EU budget. This report confirms that the EU budget in 2017 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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