ECA: “Cohesion, spending controls not robust enough”

Brussels -Development and revitalization of territories through targeted policies and specific funds. In short, cohesion. An item of EU budget spending that accounts for a third of the Union’s entire multi-year budget and in the programming cycle that has just ended (2014-2020) is worth 409 billion euros. A huge figure with deficient management since, as the ECA notes, “European Commission and member state controls are not robust enough” and are still lacking “at every level.”

For the Community Executive, the audits of Luxembourg auditors represent a rejection of the system of managing funds and their use. In truth, there are improvements, but not as one would like and need. Looking at the 2007-2013 and 2014-2020 multi-year budget cycles, the ECA argues, looking at the multi-year budget cycles of 2007-2013 and 2014-2020, the overall level of error in Cohesion spending fell from 6% to 4.8%, but each year remained above the 2% threshold set in the rules, with a recent peak of 6.7% in 2022.

“The Commission and member states work hand in hand to deliver EU Cohesion policy benefits to citizens, but they must make a greater effort to ensure that spending follows the rules,” said Helga Berger, the ECA Member responsible for this review. Member responsible for this review. Indications that, on the one hand, urge the EU executive to be more decisive in monitoring the actions of member countries, and on the other hand, sound as an invitation to reforms at the national level.  

The ECA report underlines three main causes of the misuse of cohesion funds. First, inadequate administration, including inappropriate decision-making and inefficient verifications by managing authorities. Second, negligence or suspected intentional non-compliance by beneficiaries. Another reason for errors is issues with interpreting the rules. More specifically, in recent years, most of the errors found in cohesion spending have stemmed from ineligible expenditures and projects, with the second highest being the failure of fund recipients to comply with state aid and procurement rules. These have to be corrected quickly, and quickly, as “the risk of irregular spending remains high.”

This rebuke is especially valid for Italy, which receives a major contribution because of the southern issue and aid to support the south of the country. Over €62.7 billion was granted to the country in the 2014-2020 programming cycle, making Italy the second largest EU member state by European contribution after Poland (91.2 billion).

That Italy needs to retool its public administration is nothing new. Commissioner for Cohesion Elisa Ferreira, in an interview with Eunews, acknowledged the need to support local administrators in managing as efficiently and correctly as possible the mass of resources that are not easy to handle.