Auditors call for greater accountability in EU finances

The European Court of Auditors (ECA) is calling for an increased emphasis on value added in the EU budget, along with more flexibility and transparency, and greater accountability

The proposals are made in a briefing paper entitled ‘Future of EU finances: Reforming how the EU Budget operates’, which forms part of the European Commission’s current work in developing a financial framework for the EU for the next few years.

Jan Gregor, the ECA member responsible for the briefing paper, said: ‘Although it is not for the ECA to give its views on the size or allocation of EU expenditure or on the choice of EU revenues, it is our role to provide advice on improving the financial management, transparency and accountability of the EU budget system.’

Amongst the auditors’ main proposals, the ECA wants to see a robust concept of EU value added to be used to identify opportunities for adding value in the EU budget, evaluating the performance of spending programmes and assessing the risks to EU finances of financial instruments and guarantees.

The concept should also provide a more comprehensive and accurate notion of the costs, benefits and net balances of EU membership, say the auditors. The auditors propose that the European Commission should analyse both the financial and the non-financial advantages of EU membership.

The auditors want to improve the EU budget’s responsiveness to changing circumstances by making it more flexible and introducing a system of reserves to cover long-term spending and unforeseen events.

They also propose that the Commission should publish a medium-to-long term financial plan for the EU budget to complement the proposal for the next multiannual financial framework. It should include the expected outstanding commitments, prefinancing and contingent liabilities, a payment forecast, an analysis of the economic and financial context and a risk assessment. The main elements of the plan should be updated annually.

The ECA wants to see more emphasis on performance, by aligning EU financial planning with strategic priorities, defining the key results to be achieved, reducing the number of spending programmes, objectives and indicators and making reporting more streamlined and accessible.

The auditors call for full democratic oversight of all EU finances, saying the same principles of accountability and transparency should apply to bodies inside the EU budget, such as the European Commission, and those outside such as the European Central Bank and the European Investment Bank (EIB).

Finally, the auditors say they should be able to audit all EU bodies and also bodies created outside the EU legal order which implement EU policies. This would include the European Defence Agency, the proposed European Monetary Fund, the European Stability Mechanism and the EIB’s non-EU Budget-related operations.

During the second quarter of 2018, the EU auditors also plan to present their views on the Commission’s proposal for the next multiannual financial framework, on the future of the Common Agricultural Policy, on simplifying cohesion policy and on simplifying research and innovation programmes.

Report by Pat Sweet

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