Breaking the trend of adverse opinions

Blog post | 06-10-2023 | Ewout Irrgang

The European Court of Auditors (ECA) published its annual report on the implementation of the EU budget for the 2022 financial year on 5 October 2023. It has become good practice for the Dutch member of the ECA, Stef Blok, to present the annual report to the Netherlands Court of Audit on the day of publication. This year was no exception.

Stef Blok told us that the ECA had issued an adverse opinion on EU budget expenditure in 2022. The reason? Too many errors. More than 4% of expenditure was irregular. To avoid misunderstanding, this means that expenditure did not satisfy all the applicable conditions. Some errors may have involved fraud (a matter for the courts), but fortunately most did not. The annual report also reveals that there were many errors in payments from the Recovery and Resilience Facility (RRF). The ECA could not issue a positive statement of assurance on these payments. The EU budget for 2022 exceeded €240 billion in total.

The European Court of Auditors has never issued a positive statement of assurance on the EU expenditure. Yet its adverse opinions have not yet led to appropriate improvements at EU level. Year after year, the European Parliament, acting on a recommendation from the European Council, has granted the Commission discharge.

Are all those adverse opinions so bad? Yes, I think they are. Trust in politics and governance stands or falls on the responsible bodies doing their utmost to spend public money economically, efficiently and effectively. The poor follow-up on the ECA’s warnings is a matter of concern. Especially when EU expenditure has risen to unknown heights due first to the pandemic and then to the war in Ukraine. 

How can we break this undesirable trend? Shouldn’t the European Commission, European Parliament and the EU member states be doing all they can to improve matters? Where can the member states make improvements? Together with the European Commission, they are responsible for the correct expenditure of most of the EU budget. Can national parliaments play a role? What can national audit institutions do? The answers are not easy but one thing is certain. The ECA’s warnings mustn’t be ignored!