The EU accounts myth

January 13, 2016 5:02 PM

There's an unfounded, persistent myth trotted out by critics about the EU budget not being signed off. Here's the facts :

Each year, the annual audit report on European Union's accounts is open for all to see on the website of the European Court of Auditors (ECA) The ECA's announcement accompanying the 2014 report states clearly that the ECA have signed off the 2014 accounts of the EU, 'as they have done for every year since 2007.' For the avoidance of misunderstanding, the announcement also states that the auditors gave a clean opinion on the accounts.

The ECA's estimated error rate for expenditure was 4.4% (compared with 4.5% in 2013). This is not a measure of fraud, inefficiency or waste; it is an estimate of the money that should not have been paid out, including some that came to the UK, because it was not used fully in accordance with EU rules. Typical errors include payments for expenditure which was ineligible or for purchases without proper application of public purchasing rules. This certainly calls for remedial action, but is far from evidence of corruption.

According to British Influence, a think tank, in recent years the U.S. government accounts have had error rates higher than 5%. In the UK some government budgets have also had higher error rates than the EU. According to the National Audit Office, Housing Benefit fraud and error has increased to 5.8%.

What is true is that ECA is calling for a wholly new approach to the management of EU investment and spending to align the budget better with the EU's long-term strategic priorities and make it more responsive in a crisis. This is exactly what it should be doing as part of its mission to contribute to improving EU financial management, promote accountability and transparency, and act as the independent guardian of the financial interests of the citizens of the Union.

The ECA is independent. It is appointed by the European Council after consultation with the European Parliament but, under Article 285 of the Treaty of Lisbon, its members (one from each member state) are completely independent in the performance of their duties, in the Union's general interest. The ECA is separate from the European Commission's Internal Audit Service.