Keeping tabs on the EU taxpayer's money

Every year EU spending is about 140.000.000.000 Euros. It not only takes a lot of planning and many decisions to decide on how to spend all that money, but also a great deal of supervision on how this is executed is of equal importance.

It would be difficult to go back to taxpayers if fraud and ineffective use was rampant.

It has to be said that control is tight. Money is generally well spent and overdrafts of budgets virtually never happen.

Ergo, the supervision of EU budgets is extensive. Internal controls and rules are not enough, external auditing is also essential.

The Court of Auditors have an independent standing as one of the core institutions of the EU and they closely scrutinize all spending in all European Institutions and agencies with them aim to detect fraud, inefficiency, misspending and misallocation of resources. If they detect fraud they send it to the EU anti-fraud authority, OLAF for further action. All other findings are analyzed and reported to the EU discharge authority, the European Parliament.

Following the audit and finalization of the annual accounts, Parliament decides whether or not discharge is granted for each and every EU body.

Close to 85 percent of the EU budget is handled by the European Commission. Not that the Commission are the final spender but it is from that budget that agricultural and regional subsidies as well as infrastructure projects are financed.

MEP Christofer Fjellner, a Swedish MEP from the EPP Group responsible for the 2010 discharge for the Commission budget, is basically impressed by the Commission accounts but less so with the payments for cohesion and in the sectors of energy and transport, which are the most error prone. Errors in these areas seem to have increased and now amount to 7.7 percent. The average error rate across the budget as a whole is 3.7 percent. Most of these errors occur in Member States with limited possibilities for the Commission to intervene.

While Christofer Fjellner's conclusion is that discharge should be granted to the Commission, he requests improvements and strengthening of the accountability chain of payments and the creation of an effective sanctioning mechanism in the area of Cohesion policy. The latter is essential as sometimes it is obvious that money is spent ineffectively or partly on other projects than those decided but with limited powers to enforce projects or put a stop to them. Provisions for tougher sanctions should be introduced.

Christofer Fjellner is also concerned about and asks for a reconsideration of the increase in so called pre-financing, where control is even more difficult.

He received overwhelming support for his report when MEPs granted discharge of the Commission's budget in plenary on May 10.

But it is not all about the Commission budget. In total the 2010 discharge is handled by 43 different reports! The majority of them are about the 24 EU Agencies where EPP Group MEP Monica Macovei, from Romania, agrees to grant discharge to 21 but as there are question marks concerning spending by the Agencies for Environment, Food Safety and Medicines, their discharge was postponed.

Finally the budgets of the "Other Institutions", among them the Court of Justice and the Court of Auditors, were also granted discharge.