The Court of Auditors rebukes the EU: “Too long to recover irregular spending.” Especially in agriculture

Brussels – The EU takes too long to recover irregular spending in member countries. Typically, more than two years after the completion of activities financed and eventually deemed ineligible. However, “between 1 and 8 per cent of the sums to be recovered is simply waived,” especially for funds for agriculture, managed in a shared manner and over which the primary responsibility lies with member states. The picture taken today (May 7) by the EU Court of Auditors nails the European Commission to its financial control responsibilities.

The Luxembourg-based Court found that “although the Commission ensures that irregular expenditures are recorded accurately and promptly, recovering such sums often takes too long.” For the  2014-2022 period, about €14 billion was reported as unduly disbursed funds. By 2022, about €993 million. Recovering them means demanding full or partial repayment of amounts paid to an implementing body or beneficiary that did not meet the requirements for EU funding. According to the Court’s estimates, it typically takes 14 to 23 months from the completion of funded activities alone to issue a claim for repayment, to which three to five months must be added before funds are recovered.

“No effort should be spared to recover misspent EU money without delay,” said Jorg Kristijan Petrovic, the Member of the Court in charge of the investigation, “The EU owes this to taxpayers, and any failure to recover money would be detrimental to EU citizens’ trust. An increasingly pressing issue: between 2021 and 2022, the rate of unduly spent funds rose from 3 to 4.2 per cent of the budget. However, the main bottleneck is that only 20 per cent of the budget is managed directly by the European Commission, while about 70 per cent is managed concurrently with member states, and 10 per cent is managed indirectly through other international organizations or non-EU countries.

Irregular spending in the agriculture sector

While under direct and indirect management, it is the Commission’s responsibility to identify and record irregular expenditure and recover funds, under shared management, the Commission delegates to the Member States the responsibility for recording and recovering irregular spending while retaining the ultimate responsibility for securing it. In these cases—mainly to recover funds in the agriculture sector—the ECA suggests reintroducing additional incentives so that member states can recover irregular expenditures in a more timely manner.

In the period between 2014 and 2022, the audit notes that “at least 75 per cent of the total amount of recovery orders has been settled but after long delays.” With regard to funds for agriculture, recovery rates vary widely among member countries: from 92 per cent in Austria to 17 per cent in Poland. From 2007 to 2022, €378 million of the European Agricultural Guarantee Fund was spent irregularly in Italy, and the country has so far recovered just over half of it, 56 per cent. However, this has been matched by a cancellation rate of 10 per cent.