The European Commission’s management of EU spending under the 2011 budget was approved by the Budgetary Control Committee on Monday. However, MEPs also urged EU member states to take more responsibility for managing EU funds spent on their territory.
The committee approved the 2011 spending for which the Commission was responsible, after it replied satisfactorily to MEPs’ questions about spending on rural development and regional policy, which are managed largely by member states, and research, which is managed by the Commission itself.
But spending by member states’ administrations under the “shared management” regime – accounting for 80% of the EU budget – had not improved, noted MEPs.
“More than 60% of the errors in regional policies should have been detected by national control systems. These funds are poorly managed and it is unfair to blame the Commission for that, just because on paper it remains formally responsible”, said the MEP steering the Commission’s budget “discharge” (approval) through Parliament, Jens Geier.
Overall, accounting error rates were particularly high in rural development (7.7%) and regional policy (6%), increasing the overall error rate from 3.7% in 2010 to 3.9% in 2011.
However, “These errors do not necessarily mean loss of funds or fraud, rather procedural or implementation mistakes”, said Mr Geier, pointing out that EU member states could reduce error rates substantially by improving spending controls at national level.
As in previous years, MEPs advocated improving national accountability by introducing national declarations, to be signed by member states’ national finance ministers, accepting responsibility for the management of EU funds by their national authorities and agencies.
The committee also called for an end to the practice of financing projects that are physically completed before applying for funding, as they can hardly be checked.
Many errors are due to overly complicated rules that member states themselves impose on top of the EU procedures, especially in public procurement (a practice known as “gold plating”) noted the committee. To put an end to this practice, it recommended simplifying rules wherever possible.
To stimulate peer pressure among member states to improve their financial management, MEPs urged the Commission to issue a country-by-country list, publicly showing the financial corrections and recoveries collected and what has been done to improve management and control systems.
The Committee also approved 2011 spending by the European Development Fund and administrative spending by the European Parliament.
The committee will vote on discharges for other EU institutions, agencies and joint undertakings on 19 March. Parliament as whole will vote on all the committee’s discharge recommendations at the April plenary session in Strasbourg.
The European Parliament is the sole discharge authority vetting spending of the EU annual budget and the European Development Fund. At the end of a budget year it may grant, postpone or refuse a discharge, which is required for the formal closure of institutional accounts.