It’s that time of the year again; the leaves are falling from the trees, bonfire wood is soon to be gathered, and the annual pantomime where the European Union takes collective leave of its senses and gives us a rare moment of frankness and honesty. I refer, of course, to the Court of Auditors report – which, for the 22nd year in a row, has issued an ‘adverse opinion on the regularity and legality of the payments’ underlying the EU accounts. An adverse opinion is rare in accountancy, and is issued only in serious cases where there has been a substantial departure from generally accepted accounting principles. British euro-apologist politicians love to find new and inventive ways of denying that this means the EU’s accounts haven’t been signed off.
The European Union has tried many things: it’s tried to explain this anomaly away. It’s tried making excuses, it’s tried blaming the member states for making the mistakes (Seriously? They think all 28 countries in the EU simultaneously all make the same mistakes, as do various countries across the world in receipt of EU funds, but it’s never the Commission’s fault?), and it’s recently tried appointing people with horribly federalist pro-EU views to the Court of Auditors. It hasn’t worked; the Auditors still embarrass the European Union on an annual basis.
In the 320-page report, the Court of Auditors blasted various examples of EU waste and mismanagement. But the Court of Auditor’s findings only told a small part of the true scale of EU wastefulness, because only a small sample of all expenditure is scrutinised by the Court. There are undoubtedly many similar examples which will simply never be found.
The error rate is 3.8%, almost double the 2% threshold which is the maximum considered acceptable by the Court of Auditors, affecting a whopping €5.4 billion of EU spending.
There are various examples of waste which are utterly bizarre. A €4,000 mountain bike, a €10,000 donation to a local church and a €3,500 panoramic spyglass were claimed for in Italy as part of an €80,000 spending spree on unnecessary items for a project (see page 238). A youth club in Azerbaijan was given €16,500 but the Court of Auditors was unable to actually trace the youth club, leading to fears that the money had disappeared altogether (see page 260). A €250,000 euro grant for cloud computing services (page 149) was used to pay staff for hours they didn’t work, and give them bonuses that they weren’t entitled to. In Italy nearly €100,000 was awarded for building dry stone walls which the Court says had no link to any EU objectives (see page 240).
Then there are more structural issues. According to the Commission only 58% of the expenditure declared for the European Regional Development Fund (ERDF), Cohesion Fund (CF) and European Social Fund (ESF) operational programmes (OP) were “free of a material level of error” (see page 188). The Court of Auditors points out that many objectives for EU funding aren’t properly set out. For example (p107): ‘To secure investment for climate related issues’ is not specific as it does not indicate the volume of investment to be secured, and it is not time-bound as there is no deadline to achieve it.
Some projects (see page 108) were designed to achieve results but were defined by the amount of money put in:
“Indicators presented as result indicators but were instead input-oriented, for example in DG AGRI [agriculture] ‘Total investment in renewable energy production’ — This indicator measures the activity directly realised by the intervention instead of focusing on the increase in renewable energy resulting from the investment.”
The whole thing is a mess, though sometimes you have to look at the footnotes to spot it. When EU funding has been wrongly awarded to a British company, they fine the British government and require us to repay the money. Fair enough, but then they use all fines collected from all governments to increase the EU budget. Therefore, EU membership ends up actually costing us more in practice than we think. I knew that already from my time on the Budget Committee, but most people would have to read footnote 12 on page 53 very clearly to spot it. I read the report very carefully!
There are many, many more examples from the report that I could give. Remember, though, that the Court of Auditors only actually looks at a small sample of all payments made by the European Union – and that their report highlights only a few of the examples of waste (and in some cases fraud) that they find. We’re merely scratching the surface of it all. After all, there’s a lot to look at: the report comments (page 53) that last year the Commission spent more money than in any other year in history. Quite. That’s part of the problem.
It’s a pity that all this hasn’t been picked up by the media more than it has; I suppose they think Brexit has already been won. All I can do as a UKIP MEP is to highlight it, to send out the press releases, to put out the pictures and gifs on Twitter and Facebook. And, of course, to write articles like this one.
If you want some bedtime reading, or if you simply want to check for yourself that what I’m saying is true, you can read the whole thing for yourself here The page numbers cited above are the document’s page numbers, not the numbers you’ll see on your pdf reader.