EU accounts cleanest in over 10 years

The European Commission earned its cleanest accounting record in more than a decade on Tuesday, but concerns remain over the way it administered large parts of its €117bn budget last year.

The European Court of Auditors signed off on the European Union’s executive arm accounts for only the second time since the mid-nineties, after a breakthrough year in 2007.

The court gave a reserved opinion on the accuracy of the transactions underlying the accounts, however, focusing on the bloc’s cohesion spending, which aims to promote structural adjustment for the bloc’s poorest regions.

“The level of irregularity has decreased overall in recent years, due to the improvements in the management of the budget, but it is still too high in some areas,” the court’s president said.

Parts of the agriculture budget relating to rural development were also highlighted as prone to error, but overall the picture is unlikely to generate the amount of public embarrassment for Brussels seen in the past.

“It is indeed better than in previous years, but cohesion represents a third of the EU budget and that’s still not up to scratch, so it remains a mixed picture,” said one auditor involved in the report.

The audit of the €46bn cohesion budget exposed errors in 11 per cent of the largest part of the budget, worth €25bn. The acceptable margin for mistakes is below 2 per cent. Less than half of all EC spending is in policy groups with error rates of less than 2 per cent.

The Commission stressed that the “errors” identified in the structural and cohesion funds did not necessarily amount to cases of fraud. It added that it had a good track record of recovering non-compliant funds and that new measures were in place to further reduce errors.

“The errors need to be seen in the proper context,” said Pawel Samecki, the commissioner for regional policy. “It is important not to lose sight of the big picture.”

National governments and agencies spend an estimated 80 per cent of the money allocated by Brussels, but the auditors’ report stops short of “naming and shaming” the countries responsible for the errors.

The bulk of the structural funds go to new member states in Central and Eastern Europe, but many of the projects audited were approved under previous budgets, whose focus was more on southern European infrastructure projects.

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