19 October 2022

ECA: EU spending: auditors find increased errors

While the auditors conclude in their annual report that the EU’s accounts for the 2021 financial year give a true and fair view, and that revenue can be considered error-free, payments are still affected by too many errors.

The ‘2021 EU audit in brief’ provides an overview of our 2021 annual reports on the EU’s general budget and the European Development Fund, in which we present our statement of assurance as to the reliability of the accounts and the legality and regularity of the transactions underlying them. This year, for the first time, through our work we also covered the Recovery and Resilience Facility and provide a separate opinion on the legality and regularity of its expenditure. The EU audit in brief also outlines our key findings regarding revenue and the main areas of spending under the EU budget and the European Development Fund, as well as findings relating to budgetary and financial management.

Errors in spending from the EU budget have increased, according to the European Court of Auditors (ECA). While the auditors conclude in their annual report, published today, that the EU’s accounts for the 2021 financial year give a true and fair view, and that revenue can be considered error-free, payments are still affected by too many errors. The auditors also identify risks in relation to the EU funds that have been made available in response to the coronavirus crisis and the war of aggression in Ukraine. For the first time, the report includes a separate opinion on the EU’s temporary recovery instrument, the Recovery and Resilience Facility (RRF).

The auditors find that the overall level of errors in spending from the EU budget increased in 2021, to 3.0 % (2020: 2.7 %). Nearly two thirds of the audited expenditure (63.2 %) was considered high-risk, also an increase compared to 2020 (59%) and before. The rules and eligibility criteria governing this type of expenditure are often complex, which makes errors more likely. Material error continues to affect high-risk expenditure, at an estimated rate for 2021 of 4.7 % (2020: 4.0 %).
Adverse opinion on EU budget expenditure

As in the last two years, the auditors conclude that the level of error for high-risk expenditure was pervasive, and have issued an adverse opinion on the EU’s spending in 2021.

The estimated level of error is not a measure of fraud, inefficiency or waste: it is an estimate of the amount of money that was not used in full accordance with EU and national rules. However, during their work the auditors also identified 15 cases of suspected fraud (compared to six in 2020). They reported these cases to the European Anti-Fraud Office (OLAF), which has already opened five investigations. One case was reported in parallel to the European Public Prosecutor’s Office (EPPO), along with an additional case that the ECA had identified in 2021.

“With the war of aggression in Ukraine, the energy shortage, the coronavirus pandemic and climate change, the EU is being forced to deal at one and the same time with the consequences of an unprecedented series of crises”, said ECA President Tony Murphy. “Such an environment creates increased risks and challenges for the EU’s finances and makes it all the more important that the European Commission manage them soundly and effectively. Through our work, we play an important role in ensuring this.”

The full texts of the reports may be found at eca.europa.eu.

ECA

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