Recovery: The Commission and the EU Court of Auditors clash—again—over fund transparency

Brussels – A debate is heating up among EU institutions over the management of the main post-pandemic recovery instrument developed by the European Union. Just a few days after the publication of guidelines on the final phase of implementation of the Recovery and Resilience Facility (RRF), the European Court of Auditors (ECA) has released a new report raising concerns about the transparency and traceability of the fund created to support Member States following the COVID-19 crisis, within the broader framework of the Recovery Fund, which finances national recovery plans (NRRP). It is primarily the fund’s operating model that has come under scrutiny by the auditors: unlike other European financial instruments, the RRF does not determine the amount of money to be disbursed ex post, based on the costs actually incurred by Member States to carry out specific investments. On the contrary, the amount is agreed at the outset, and its disbursement is linked simply to the implementation of certain structural reforms agreed in advance with Brussels. An innovative approach that, according to the Court, leaves too many grey areas regarding where European taxpayers’ money ends up and how efficiently it is spent.

The opinion of the Court of Auditors

In the audit published today (6 May), the ECA highlights “shortcomings in the traceability and transparency of expenditure” by the RFF, noting that the level of public information remains “insufficient” given the scale of the funds involved. A critical issue which, as the Luxembourg judges point out, “had already been raised in the past by the EU Parliament, the EU Ombudsman, and the OECD (the Organisation for Economic Co-operation and Development, ed.).”

One of the key issues concerns the innovative nature of the mechanism for disbursing funds. The fact that—for the first time on such a large scale at the EU level—the resources needed to implement certain reforms and make certain investments are not disbursed based on the costs actually incurred by Member States would make it more difficult to clearly trace how these funds are used. In particular, it would be difficult to ascertain not only who benefits from the resources, but also how effectively they are being used. “Traceability and transparency are crucial to safeguarding the EU’s finances,” the judges explain, and in this regard “the picture remains incomplete.”

https://www.eunews.it/en/2025/05/06/eu-clash-between-court-of-auditors-and-commission-over-recovery-fund/ 

On the subject of traceability, the Court acknowledges that Member States generally comply with the regulatory requirements, but notes that not all of them collect data systematically: “In some cases,” the auditors explain, “information is provided only on request, leading to delays of several months and making the information less useful for reporting and analysis purposes.”

The picture regarding transparency appears even more critical. While it is true that the Commission and Member States ensure an adequate level of scrutiny regarding the achievement of targets and objectives, the Court of Auditors points out that “information on the results achieved is minimal.” Furthermore, although the RRF rules require national governments to publish a list of the 100 largest final recipients of the funds, the Court considers that “this list does not adequately reflect the overall use of the funds.”

There are two reasons for this. Firstly, more than half of these recipients are public bodies (ministries and state authorities), but these, in turn, distribute funds to individuals and businesses through public procurement contracts, without any obligation to formally account for these transactions. Secondly, none of the 10 countries analysed by the Court as a sample (Austria, Bulgaria, Estonia, France, Germany, Latvia, Malta, the Netherlands, Romania, and Spain) has ever exceeded the minimum of 100 beneficiaries.

Summarising a picture that the EU Court of Auditors still considers to be very incomplete is the ECA member responsible for the report, Ivana Maletić. What is missing is “a comprehensive overview of how RRF funds are being used,” she explained.  “Citizens have the right to know how public funds are being used, who receives them, and how much is actually being spent,” she concluded, before warning that “this lack of transparency must not be allowed to carry over into future EU budgets.”

The Commission’s response

The EU Commission’s response to the Court’s allegations was not long in coming. In a statement released today, a spokesperson for the Berlaymont building effectively rejected the ECA’s criticisms, defending the soundness of the regulatory framework governing the RRF. “The approach linking the disbursement of funds to the achievement of pre-set objectives,” the statement reads, “has proven effective, ensuring that funds are directed towards concrete results and allowing the Commission to rigorously verify the implementation of reforms” before releasing the money.

Moreover, according to the European Commission, the RRF Regulations—in recital 18—explicitly prohibit checks on the costs actually incurred by the beneficiary. Even the differences between Member States in data collection—another of the main concerns raised by the ECA—are interpreted not as a sign of poor management, but simply as a reflection of the different national administrative structures.”

“Everything is in order” seems to be the gist of the Berlaymont’s response, which also lists the “robust measures” already in place to ensure the transparency required by the ECA: “the publication of assessments of the Recovery and Resilience Plans, payment requests and progress reports; detailed analyses supporting the Commission’s payment decisions; comprehensive guidance on Member States’ reporting obligations for the top 100 recipients of funds; and ongoing dialogue with Member States to address any inconsistencies.”

On the basis of these arguments, the rejection of the three recommendations set out in the Court’s report is unequivocal.

The first—reopening the EU Financial Regulation, i.e. the “code” that sets out how EU budget funds are managed, spent, and audited—is deemed unfeasible because the new text “was adopted 18 months ago following extensive negotiations between the co-legislators” and there is no desire to reopen a political compromise that has only just been reached.

The second recommendation called for using actual cost data reported after funds have been spent as a benchmark to verify alignment with initial estimates. Here too, the Commission’s response was terse: “There is no legal basis for requesting this data.”

Finally, the third recommendation proposed, at the very least, establishing a requirement for Member States to systematically collect actual costs in future EU financial instruments based on performance criteria. While not rejecting the suggestion, the Berlaymont building sidestepped the issue on principle: it is up to the Council and Parliament to decide how to design future programmes.

Yet—between the lines of its response—the Commission leaves a small window of opportunity open. “Taking note” of the ECA’s report, the Commission describes it as a “valuable contribution” to the upcoming discussions on the EU’s next Multiannual Financial Framework (MFF) for the 2028–2034 period. A slender olive branch offered in response to the words of warning spoken in this regard by Maletić.