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The ECA found that the control of cohesion funds expenditure is still inadequate

by AI | 10.Jul 2024 | Europe in brief AI

The European Court of Auditors points out numerous irregularities in the spending of cohesion funds.

Zagreb, 22.02.2023 - For the first time in Croatia, on Wednesday at 8 o'clock, the enrollment of government bonds intended for citizens, so-called people's bonds, began. The minimum investment is 500 euros, and the minimum interest rate that will be calculated is 3.25 percent per year. Illustration, coin, graph, inflation, euro, GDP, bond. photo HINA/ Damir SENČAR/ ds

LUXEMBOURG – The European Union has failed to significantly correct “persistent” irregularities in the spending of budget funds that should mitigate differences among member states, with responsibility for flawed control mechanisms lying with both the authorities and auditors of EU countries and the European Commission, the European Court of Auditors (ECA) warned.

From 2014 to 2022, the Union allocated 409 billion euros for ‘cohesion,’ approximately one-third of the budget, and the control mechanisms for spending that money are still lacking at all levels, the ECA analysis published on Monday found.

Member states could uncover and prevent more irregularities, the auditors emphasized.

The Commission, however, released an underestimated assessment of improperly spent funds and has not sufficiently used available tools to encourage member states to improve the control system, they added.

It is in the cohesion policy area that the most spending failures occur in the EU’s seven-year budget, the report notes, and the overall rate of spending irregularities was reduced from six percent in the previous seven years to 4.8 percent in the 2014-2022 period, calculated the European Court of Auditors.

The prescribed ceiling is two percent, and it was exceeded in all seven years from 2014 to 2022, reaching a peak of 6.7 percent in 2022.

“Our analysis shows that in its new calculations the Commission found that the rates of uncorrected errors significantly above the prescribed ceiling are particularly common in certain countries – in Greece (in 45 percent of ‘guarantee packages’), France (22 percent), Italy (26 percent), Lithuania (36 percent), Portugal (36 percent), and Slovakia (39 percent).”

Croatia also exceeded the ceiling with an uncorrected error rate in cohesion fund spending of 15 percent, the report shows. (July 9, 2024)