Auditors in warning over EU spending 'errors'
Europe’s governments were challenged today to get a grip on EU spending after another mixed report from the EU’s accounts watchdog.
For the first time in 14 years, the European Court of Auditors gave EU accounting procedures a clean bill of health – but warned there were still too many errors in the way billions of pounds of EU budget money is being spent.
The report was welcomed by the European Commission, which said it was now up to national and local authorities, who are responsible for disbursing about 80% of the entire EU budget in regional, social and agriculture grants every year, to get their books straight.
The auditors allow a margin of error of 2% before declaring a problem, which clears the bulk of EU farm payments.
But in the key “structural” funds – regional and social policy spending area, handled by EU governments – the audit report for 2007 found discrepancies in 11% of its spending survey sample.
That suggests that the use of more than £4.6bn (€5.61bn) of the annual £42bn (€51bn) disbursed last year in regional and social assistance to poorer areas was “affected by errors”.
This afternoon, as the Commission insisted “errors” does not mean fraud except in increasingly-rare cases, regional policy commissioner Danuta Hubner said Brussels was already targeting member states who do not correctly account for their handling of EU funds.
And her spokesman Dennis Abbot said: “Every year the Commission takes the rap for cock-ups by member states.
“This is a bit like a referee in a football match getting the blame for fouls committed by players.
“The crowd likes to boo the ref because he’s an easy target. But it’s the players who are fouling up.”
Mr Abbot added: “The European Commission is getting tougher. It is increasingly showing the member states the yellow card or the red card.
“We are freezing sums in some cases, and in others we are saying we want our money back where member states are spending EU cash without respecting the funding rules.”
Since the start of 2007, the Commission has clawed back £680m in regional and social aid grants from various member states accused of not meeting the rules, and a further £1.2bn (€1.46bn) is due to be recouped by next March, including £190m (€232m) for UK projects.
Only 0.16% of spending “errors” have been blamed on suspected fraud by the European Anti-Fraud Office between 2000-2007 – £233.8m (€285m).
The rest is put down to failure to meet the bureaucratic requirements for financial tendering, inaccurate cost estimates or failure to submit the right paperwork on time.
“The Commission has been working hard to reduce the error rate in payments claims from member states for projects co-financed by the EU, and we are seeing results,” said Ms Hubner.
“The objective is not to punish anyone,” she said. “It is simply to protect EU taxpayers’ money and to recover funds where they have been paid out without full respect for EU rules and laws.”
She added: “I’d like to address a common misconception: errors do not mean fraud. When the Court of Auditors and the Commission’s own auditors talk about errors, they mean non-compliance with conditions for receiving EU funds.”
EU Commissioner responsible for audits and anti-fraud measures Siim Kallas told budgetary control MEPs that the accounts had received “a completely clean bill of health” but acknowledged the picture on actual transactions “remains more mixed or colourful”.
“The Commission is fully aware of the urgency of reducing the error rate,” he said. “Weak systems and controls in member states cannot be compensated by the Commission’s supervision.”
