The European Court of Auditors warns of increased errors in the payment of EU subsidies. Due to the disbursement of billions from the large corona recovery fund, nearly twice as much will be paid out in the coming years. The ECA’s 2020 annual report shows that the error rate in payments has remained steady at 2.7%.
Although revenues were considered error-free, payments still show too many errors. For the second year in a row, the auditors have issued an adverse opinion on expenditures. In 2020, over half of the expenditures (59%) were classified as high-risk spending, an increase compared to 2019 (53%) and previous years.
The rules for these types of expenditures are often complex, which makes errors more likely to occur. For high-risk spending, material errors remain, with an estimated rate of 4.0%. As in the previous year, the Court of Auditors concluded that the error rate for this substantial expenditure category is of profound impact.
In 2020, six cases of suspected fraud were reported, discovered during our audit activities—fewer than in 2019, when nine cases were reported. The European Anti-Fraud Office (OLAF) has launched investigations into all these cases.
“Given the great challenges ahead, we must remain even more vigilant regarding the EU’s financial integrity,” said Klaus-Heiner Lehne, President of the ECA. “Over the next seven years, the EU will spend significantly more through the Covid funds than in the previous programming period. This represents an important shift in the EU’s finances.”
For the period 2021-2027, payments from the Next Generation EU (NGEU) and the multiannual financial framework (MFF) will amount to EUR 1,824 billion, nearly double the amount of the previous MFF period.