EC Dispute Over the Return of ‘Improperly’ Spent Budget Money – Auditors

The European Commission accurately and quickly records ‘improperly’ spent money from the European budget, but it takes up to two years to request its return, warned the European Court of Auditors (ECA) on Wednesday.

From 2014 to 2022, 14 billion euros of ‘improperly’ spent money was reported, auditors calculated, reminding that its return is a ‘key element of the financial integrity of the EU and its internal control system’.

‘Return’ implies a request from the European Commission for the money to be returned in full or in part if it is subsequently determined that its user did not comply with the payment provisions.

This process often takes a long time, auditors warn, determining that the Commission usually issues an order up to two years after the completion of the funded activities.

In one to eight percent of cases, Brussels simply gives up, they emphasize.

According to the annual report of the European Court of Auditors for 2022, the value of improperly spent money increased in 2022 to 4.2 percent of the EU budget, up from three percent in 2021.

Budget spending in the EU reached 196 billion euros in 2022, and when payments from the recovery and resilience fund are included, the amount rises to 243.3 billion euros, auditors state.

The most money was directed in 2022 to ‘cohesion, resilience, and values’, totaling 79.1 billion euros. This is followed by ‘natural resources and the environment’ with 58.3 billion euros paid out and ‘the single market, innovation, and digital’ with 25.2 billion euros.

The biggest problems were identified in spending on ‘cohesion, resilience, and values’, with a share in the rate of improperly spent money of 2.5 percentage points, auditors state.

The European Commission directly pays only one-fifth of the budget money, while 10 percent is transferred through international organizations or third countries. The remaining money is managed by the Commission together with the member states.