EU too slow in getting back misspent funds, Court of Auditors warns

The European Commission is too slow when it comes to retrieving misspent EU funds, the EU Court of Auditors said in a new report published on Tuesday (7 May), noting that it takes particularly long timeframes for money that goes into third countries.

The EU body in charge of scrutinising the bloc’s finances published an assessment on irregularities in EU spending from 2014 to 2022, following similar reports on earlier periods.

During the assessed period, irregularities were seen for €14 billion from EU funds, which includes cases of fraud as well as other cases where the use of money turned out not to be in line with EU rules.

In 2022, misspent funds accounted for 4.2% of the whole EU budget.

Most of this – €10.7 billion – affects funds under so-called “shared management”, which means that potential losses are covered by national share of the money rather than the EU budget, such as under the EU cohesion policy that aims to lift up poorer regions within the EU.

“This means that the EU budget is protected as soon as irregular expenditure has been detected and withdrawn,” the auditors noted, as “member states correct irregular expenditure by withdrawing it from certified expenditure immediately after it has been detected”.

However, in parts where the Commission is responsible, including money that goes to third countries, it needs to do better to retrieve money that has been misspent, the auditors said, pointing out that it takes up to 23 months to issue requests for repayment in case of misspent money.

Jorg Kristijan Petrovic, vice president of the Slovenian Court of Audit and member of the European Court of Auditors, warned that “failure to recover money would be detrimental to EU citizens’ trust”.

Thus, “no effort should be spared to recover misspent EU money without delay,” he said in a statement.

Retrieving funds takes particularly long in cases where money goes to countries outside of the EU, the auditors noted, like in programmes organised by the European Commission’s department for International Partnerships (DG INTPA) and Neighbourhood and Enlargement (DG NEAR).

For those programmes, repayment orders can take between 18 and 23 months, partly because the DGs hire private audit firms to carry out the verification of expenditure, but subsequently add an additional “adversarial” period to discuss the findings with the funded entities, before issuing a repayment request.

The report cites a case of an undisclosed “local NGO in Africa” where, four years after the completion of the project, the beneficiary – who coordinated the payment to some smaller NGOs – was unable to present the necessary documentation on how the money was spent.

Recouping the funds proved impossible, however, because “some of the NGOs no longer existed and the others could not repay the amount requested by the Commission,” leading to the repayment being ultimately waived.

Nevertheless, most recovery orders are ultimately settled without a loss for the EU budget, with between 75% to 90% of repayments being made, despite the detected cases of long delays.

In response to the ECA’s statements, the Commission said it “shares ECA’s views that there is still room to recover irregular expenditure more diligently and effectively,” and committed to review its strategies for control and audits by June 2026.

[Edited by Zoran Radosavljevic/ Anna Brunetti]

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