The European Court of Auditors has said it will not sign off the EU’s accounts, saying that many payments worth billions were irregular and possibly illegal.
Overall, the report gave an “adverse opinion on the legality and regularity of payments underlying the accounts". It noted that receipts were missing for thousands of pounds of expenses.
Amongst its findings, it said that some countries are “struggling to absorb” the sums of money allocated to them and this has lead to wasteful spending.
It also said there was an error rate of 4.4% in €144 billion expenditure. The tolerated margin is 2%.
The European Commission said the error rate had declined from 4.5 % last year. It also stressed that error is not the same as fraud.
The worst affected area was cohesion spending – funds to develop the infrastructure of poor countries - where there was a 5.7% error rate.
Funding to landowners had a 3.6% error rate, mostly due to farmers overstating the size of their land or the number of their animals.
The auditors reported 22 cases of suspected fraud to EU fraud investigators. They included suspected conflicts of interest and “the artificial creation of conditions to receive subsidy”.
In the fisheries fund, it found that in some countries the total funds available was greater than the value of applications received, meaning every project that met the basic criteria received handouts.
“Ghost” projects were highlighted, such as airports half of which had not really needed investment and a third of which were unprofitable and needed public money to operate. In Greece, a sewerage network has not been used nearly a decade after it was launched because the local government failed to connect it to private homes.
Waste was found in the EU’s foreign aid budget. It included €6.5 million given to a Caribbean bank to finance sugar planting in Belize but only a fraction has been used.
Another case was a trade project in the Pacific for which receipts for €22,117 of expenses and staff costs could not be found by auditors.
Vítor Caldeira, president of the European Court of Auditors, told MEPS: “There is a persistently high level of payment errors, which means too much money is still not spent in accordance with the EU’s financial rules.”
This is the 21st year in a row where the EU’s independent financial watchdog has said it cannot give the accounts a clean bill of health. Surely it must be possible for someone to take this in hand.
