According to a report by the European Court of Auditors, the distribution of funds from the EU budget was more botched last year than in the previous year. The overall error rate in 2021 is three percent, according to the Court of Auditors’ annual report published on Thursday. Last year it was 2.7 percent. “Again this year, for the third consecutive year and in the face of a worsening trend, we are giving a negative opinion on spending,” said German auditor and former President of the European Court of Auditors, Klaus-Heiner Lehne.
The error rate does not refer to fraud or waste, but to funds that are estimated not to have been used fully in accordance with EU or national regulations. The auditors found, for example, that ineligible projects in regional development had been funded. The same applies to the agricultural sector, where some environmental obligations have also been violated. According to the report, for example, in the area of research, personnel costs were covered with grants that should not have been financed. In principle, the proportion of expenses that have a high risk of error due to a complicated award process has increased.
Parts of the Corona aid package checked for the first time
However, the auditors also identified 15 cases of possible fraud that were reported to the EU anti-fraud authority Olaf – last year there were only six. According to the report, it is about the suspicion that official documents were forged in order to get EU funds or that financial aid was used for unauthorized purposes. Olaf has already initiated investigations in five cases and one case has been referred to the European Public Prosecutor’s Office.
The Court of Auditors also examined parts of the €800 billion Corona aid package for the first time. EU countries receive financial support if they have reached predetermined milestones. The auditors found that there were weaknesses in the validation of these targets and that improvements needed to be made. Last year only one payment was made to Spain via the aid package, but this area will play a major role in the coming years.
It also warns of the risks of the Ukraine war for the EU budget as the EU has lent money to the country. The auditors speak of 4.7 billion euros in outstanding loans at the end of 2021, as well as 2.1 billion euros lent to Kyiv by the European Investment Bank with the help of EU guarantees. Since then, the EU has provided even more loans to Ukraine in the face of the Russian invasion.
According to the report, the total expenditure from the EU budget for 2021 amounted to 181.5 billion euros. This corresponds to 2.4 percent of the total government spending in all EU countries. Much of this funding had been allocated to projects by the Member States themselves. Together with the payments from the Corona Aid Fund, the total expenditure was 228 billion euros.
Press release and report of the EU Court of Auditors
