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Auditors report €5 billion ‘material errors’ in EU accounts

The European Court of Auditors says the ‘overwhelming’ majority of payments were error-free, and formally approves the 2011 accounts.

The European Court of Auditor's 2011 report is the first since Kevin Cardiff became a member.
The European Court of Auditor's 2011 report is the first since Kevin Cardiff became a member.
Image: Kevin Horan/Photocall Ireland

THE EUROPEAN COURT of Auditors has reported “material errors” relating to just over €5 billion in EU transactions last year, but has nonetheless signed off on the Union’s accounts.

The court’s annual report for 2011, published today, says 3.9 per cent of the €129.4 billion in spending recorded by the EU and its institutions last year had been recorded or transacted incorrectly.

The EU said the increase from 2010’s error rate of 3.7 per cent was “not a statistically significant difference”.

In their report, however, the auditors – including Ireland’s Kevin Cardiff – said both the Commission and individual member states, which account for about 80 per cent of all EU spending, needed to manage their spending better.

About 80 per cent of the EU’s budget goes on agriculture and fisheries spending, and on cohesion policies, where member states share the duties of distributing EU funds with the Commission itself.

The auditors’ report said that although all receipts and commitments were free from material error, there were still occasions in which spending was being used ‘sub-optimally’ or ineffectively.

“Member states and Commission control systems examined were only partially effective in ensuring the regularity of payments,” the report said.

The EU itself stressed that only a small proportion of the erroneous transactions were as a result of attempted fraud, and that every euro of the European Commission’s own spending was fully accounted for.

Although the auditors have now ‘signed off’ on the accounts, they do not formally given them a ‘green light’ unless the error rate is under 2 per cent.

The auditors’ report is now presented to the European Council of heads of state, which will make a recommendation to MEPs on whether they should discharge the EU’s accounts for 2011.

A formal vote from MEPs is not due until May 2013.

Read: MEPs approve Kevin Cardiff’s nomination to Court of Auditors

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