While the EU’s accounts for the 2020 financial year give “a true and fair view” and revenue was considered error-free, payments remain affected by too many errors. That is the conclusion of the European Court of Auditors’ (ECA) annual report for the 2020 financial year, published today. The auditors have issued an adverse opinion on expenditure for the second consecutive year. They have also identified risks and challenges relating to the implementation and sound financial management of the EU funds being made available in response to the coronavirus crisis.
The auditors found that the overall level of irregularities in EU spending has remained stable, at
2.7 % in 2020 (2019: 2.7 %). In 2020, more than half of the audited spending (59 %) was considered high-risk expenditure, a further increase compared to 2019 (53%) 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 of
4.0 % (2019: 4.9 %). As in the previous year, the auditors have therefore concluded that the level of error in this substantial type of spending is pervasive, and issued an adverse opinion on EU expenditure for 2020.
Six cases of suspected fraud were reported in 2020 arising from our audit work– fewer than in 2019, when nine cases were reported. The European Anti-Fraud Office (OLAF) has opened investigations into all of them.
“In view of the great challenges that lie ahead of us, we must remain even more vigilant about the financial soundness of the EU”, said ECA President Klaus-Heiner Lehne. “Over the next seven years, the EU will spend significantly more than in the previous programme period. The 27 Member States agreed on a COVID-19 recovery programme, which will be financed by issuing public debt. This decision marks a major shift in EU finances. It entails an obvious need for effective checks on how EU money is spent, and on whether the intended results are achieved.”
The EU response to the COVID-19 pandemic will have a very substantial impact on the EU’s finances: for the 2021-2027 financial period, the combined funding allocation from the Next Generation EU (NGEU) instrument and the multiannual financial framework (MFF) will be €1 824 billion, almost twice the amount of spending in the previous MFF period. In view of this, the auditors point out the risk of a delayed start to the implementation of shared management funds in the 2021-2027 financial period. A delayed start affected the implementation of funds the
2014-2020 financial period as well.
The purpose of this press release is to convey the main messages of the annual report adopted by the European Court of Auditors. The full report is on eca.europa.eu.