Mistakes in EU spending are ‘disturbing’, says new Dutch court of auditors, Steve Blok

Mistakes in EU spending are 'disturbing', says new Dutch court of auditors, Steve Blok

Steve Block, the former Minister of Housing and Civil Service, has been a member of the European Court of Auditors for the Netherlands since July. He succeeded Alex Brennenkimer, who passed away in April.Frick van den Berg statue / de Volkskrant

The new Dutch Court of Auditors, Steve Blok, describes this as “extremely concerning”. Since 2018, the error rate has risen again. According to the Board of Auditors, this is due to the transfer of an increasing proportion of the EU budget on the basis of receipts and statements of costs incurred. Less error in direct payments, such as income support to farmers.

In 2021, the European Union spent more than 180 billion euros. The fact that there are errors in payments does not usually mean that there is fraud, but rather that it is often related to administrative negligence or errors. The Court of Audit has identified 15 suspicious cases and referred them to the European Anti-fraud Service OLAF.

The Court of Accounts has never been able to give an unqualified opinion on the expenditures of the European Union. In 2016, 2017, and 2018 there was partial approval as the error rate decreased. But it has risen again since 2018, which is reason for a negative assessment. A painful thing, according to Block, who said he was uncomfortable with the trend. The SAI uses 2 percent spending inaccuracy as the maximum permissible rate, but with a lower percentage a positive opinion can be obtained.

European Commission reaches lower error rate

Remarkably, the European Commission arrived at a much lower error rate in its annual reports: 1.9 per cent. According to the Board of Auditors, the Commission does not receive enough information from member states, which spend about 80 percent of the EU budget. The Court of Accounts conducts its own investigations. It examined 740 financial transactions as of 2021, a small fraction of several thousand payments, but according to the Board of Auditors, its research is representative.

EU funds that were improperly spent by the member states must be recovered. This only happens sporadically. The court previously found that EU countries were not making adequate use of the information available about wrongdoing.

There are no clear criteria for the European Recovery Fund

For the first time, the court also considered the special European Recovery Fund (750 billion euros) created in 2020 to help countries with loans and grants to boost the economy. The Court concludes that the Commission does not have clear criteria for assessing whether or not recovery funds should be transferred.

This hardly played a role in 2021, only Spain received 11.5 billion from the fund. But tens of billions of dollars are now pouring out of the fund. The Audit Bureau calls on the commission to provide clarity quickly. This also applies to the question of when EU support can be stopped if a non-functioning rule of law in an EU country threatens to harm the EU’s financial interests.

According to the SAI, the UK is still properly fulfilling its financial obligations to the EU. With Brexit (2020), London and Brussels have proven that the British still have to pay close to €50 billion to the EU in exchange for financial commitments made during their EU membership. About 6 billion euros have now been transferred by London, and more than 10 billion euros is expected this year.

The Court of Audit is criticizing the Netherlands (not the first time) that it should check closely how much VAT companies pay. Part of this is for the European Union. Most of the EU budget comes directly from the coffers of the member states, in proportion to the size of their national income.

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