The European Union paid out an estimated €5 billion in error last year, close to 4% of annual spending, the European Court of Auditors has found in its annual report. For the 18th year in a row, the Court has handed down a negative verdict on the transactions underlying the EU accounts.
In its report, published on Tuesday (6 November), the Court estimates that of the €129.4 billion spent by the EU in 2011, 3.9% was affected by error, up from an estimated 3.7% in 2010. While that change is not statistically significant, it continues a slight upward trend in the error rate. In 2009, the error rate stood at a low of 3.3%, following a sharp drop from 7.3% in 2006, the first year of the current multi-annual budget cycle.
Algirdas Šemeta, the European commissioner for taxation and customs union, audit and anti-fraud, told MEPs on Tuesday that the report “confirms the sustained improvements introduced during the last five years”, and that these improvements took place even as the volume of payments and its risk profile, grew. “There were many more interim and final payments [in 2009], which are subject to more complex rules and conditions and therefore, more prone to error,” he said.
The errors uncovered by the auditors range from €45,000 over-claimed for personnel costs in a research project to a special premium granted to a farmer in an unnamed member state for 150 sheep that he did not, in fact, have.
Šemeta stressed that “error does not mean fraud”. “It means that some projects were affected by weaknesses in their implementation, such as the declaration of ineligible expenses or mistakes in the calculation of expenses,” he said. Both Šemeta and Vítor Caldeira, the president of the Court of Auditors, stressed the responsibility borne by member states in spending EU money. “The member states should agree on better rules and then make sure they apply them,” Caldeira told MEPs.
Though the Commission has primary responsibility for EU spending, around 80% of the budget is spent on agriculture and cohesion policies, where national authorities advance funding to the final beneficiaries and then reclaim it from the Commission, an arrangement known as ‘shared management'. Rural and regional development are also the two policy areas with the highest error rate.