Auditors condemn EU funding 'error rate'

The European Commission was urged today to “name and shame” member states misusing EU funds after auditors revealed “material error” in last year’s €122bn spending programme.

There was an estimated “error rate” of 3.7% in payments from the 2010 euro-budget, according to today’s report from the European Court of Auditors.

The Commission said that did not mean that 3.7% of the total was lost or stolen - because “material error” covers everything from incorrect form-filling in the disbursement of cash to cancelled projects for which Brussels recoups the subsidies.

Even the withdrawal of EU funding from Northampton University over a refusal to honour a commitment to advertise on site the fact that a project was getting euro-cash counted as “material error”, even though the cash was withdrawn by UK authorities and no financial loss was incurred.

National and local authorities are responsible for disbursing 80% of the entire EU budget in regional, social and agriculture grants every year.

Today’s assessment of last year’s spending describes the euro-budget accounts as “reliable, but payments are still affected by material error”.

Polish Euro-MP European Ryszard Czarnecki, of the European Conservatives and Reformists Group which includes the UK’s Tory MEPs, said: “For nearly 4% of the euro budget to be affected by error is unacceptable.

“National governments are still failing to honour the commitment that they gave to resolve this matter.

“The Commission is quick to bring national governments in line on a number of other matters but it seems unwilling to challenge some governments’ inability to properly account for the EU taxpayers’ money that they spend. The Commission needs to start naming and shaming the culprits.

“This annual report only reinforces the perception that there is large amounts of fraud and waste in the EU budget. We must make ending that perception one of our top priorities, not just a hollow commitment.”

EU taxation commissioner Algirdas Semeta partially “named and shamed” offending countries today, telling MEPs that two-thirds of the material errors found in a sample of EU-funded “cohesion” projects were the responsibility of the Spanish, Italian and Czech authorities.