Auditors reveal irregularities in more than 90pc of EU spending
Published 10/11/2010 | 05:00
MORE than nine-tenths of the EU's budget last year, spending that totalled €109bn, was "materially affected" by irregularities, including the improper awarding of contracts, Europe's Court of Auditors has found.
The findings come amid a heated political debate over the size of the EU budget for next year and demands from both the European Commission and Parliament to defy national austerity programmes and increase spending by 6pc.
Yesterday's report into the discharge of the EU's €118bn 2009 budget declared the Brussels books to be "true and fair" accounts -- but highlighted "material errors" affecting 92pc of spending.
Particular concern was expressed by the auditors over farm subsidy payments and shoddy public-procurement rules.
"Error rates remain high," said Vitor Manuel da Silva Caldeira, president of the Court of Auditors. He added: "Errors come mainly from incorrect claims for payment and public procurement errors."
The auditors also warned the commission that the return of money paid irregularly was not accounted for.
Algirdas Semeta, the European commissioner responsible for administration, said: "In the current economic climate, citizens need particular reassurance that EU funds are being efficiently managed and effectively spent.
"We can be pleased with the improvements in EU financial management. But there is always more that can be done."
Auditors continued to find "systemic weaknesses" leading to a high frequency of "quantifiable errors" -- meaning irregular payments -- in 214 audited transactions of agricultural and rural development subsidies.
The EU's agricultural spending, which consumes the bulk of the budget, was worth €56.2bn in 2009. Auditors found a growing rate of error, with people claiming payments for "ineligible" land.
The auditors singled out Greece for failing to check whether subsidised land was a permanent pasture -- as it is legally obliged to do -- when "photos clearly show a significant density of trees and rocks".
Court officials have growing concerns, particularly affecting Britain, that farm subsidies are being paid to companies -- such as golf clubs, property developers or speculators -- who engage in no farming activity except for "maintaining land in good condition" under rules that are badly policed.
While noting improvements in the spending of regional aid, which is targeted at Europe's poorest areas, auditors have asked the commission to recover "at least" €690m "that should not have been reimbursed".
Audits of EU-funded projects found "quantifiable errors" affecting €11bn of spending.
"Public procurement rules" were not followed in the awarding of contracts worth €4.6bn.
Nine out of 10 audited road-building projects across the EU were identified as proceeding with "unlawful use of award criteria", despite the breach of rules being detected before contracts were paid.
Mats Persson, the director of the Open Europe pressure group: said: "Until member states and the European Commission resolve the inherent flaws in the EU's spending, there should be no talk whatsoever of budget increases." (© Daily Telegraph, London)