The Commission has today welcomed the decision of the European Court of Auditors (ECA) to give the EU annual accounts a clean bill of health, for the 15th year in a row. The revenue part of the EU Budget also continues to be free from material error, in line with previous years’ results. The Recovery and Resilience Facility – the Commission’s new instrument to support the post-pandemic recovery of the European economy – is also free from material error, in its first year of implementation.
As regard legality and regularity of expenditure, 97% of the EU expenditure can be considered error free based on ECA estimates.
Johannes Hahn, European Commissioner for Budget and Administration, said: “In 2021, the EU budget largely contributed to cushion the economic impact of the pandemic and to make the European economies stronger, more sustainable and resilient. For the first time, the EU borrowed tens of billions on the financial markets to finance the recovery through the EU budget, via the NextGenerationEU recovery instrument. At the same time, the Commission continued to ensure that the EU budget remains well-protected, to the benefit of citizens, businesses and municipalities, along with other beneficiaries around Europe and globally.”
Thanks to the hundreds of thousands of checks performed by national authorities, other partners, and the Commission itself, the Commission knows where the risks are for the EU budget and can take targeted remedial actions, both before and after payments are made. The objective of the Commission is to ensure that, once a programme is closed, and all controls are carried out, the remaining level of error remains below 2%. What really counts for taxpayers is the risk that may still remain after corrections and recoveries have been made. This objective was achieved for 2021, as the Commission estimated this risk to less than 1% (0.9%).
The Commission continues to improve its financial management of the EU budget as necessary. In May 2022, the Commission has proposed targeted adjustments to the EU’s financial rules, known as the Financial Regulation, to make further improvements to the already existing very high standards of EU financial rules, notably by incentivising the wider use of digital audits and emerging technologies. This goes along with additional simplification measures (e.g. simplified forms of grants) to further reduce the administrative burden for final recipients, starting with small and medium enterprises. The Commission also continues to work closely with the EU Member States and other partners towards ensuring a sound financial management of the EU funds, by providing guidance, encouraging them to simplify their procedures, and requiring them to take remedial action whenever necessary.
The publication of the Annual Report by the European Court of Auditors kicks off the annual ‘discharge procedure’ of the EU budget. When deciding whether to grant, postpone or refuse the discharge, the European Parliament takes into consideration the integrated financial and accountability reporting prepared by the Commission along with the European Court of Auditors’ Annual Reports on how the budget has been spent and any relevant Special Reports.
The estimated level of error is not a measure of fraud, inefficiency or waste. It is an estimate of the money already paid from the EU budget despite non-compliance with certain rules.
The European Commission works hand in hand with the EU Member States, and other partners, to ensure that the EU budget continues to be spent effectively, to the benefit of citizens, remains protected from fraud and irregularities and helps achieve concrete results according to our policy priorities.