CAP direct payments for farmers ‘free from errors’, EU Auditors say

Errors found by EU Auditors occur mainly when payments are issued to beneficiaries that did not meet eligibility conditions. [SHUTTERSTOCK]

The lion’s share of the current Common Agricultural Policy (CAP) spending is substantially unaffected by material errors, while a quarter of rural development EU aids are partially wrongly attributed, according to the latest report by the European Court of Auditors (ECA).

For the third year in a row, the ECA published a qualified opinion on the regularity of the European financial transactions, with the aim to spot if and where the EU public money already spent was affected by errors.

Such errors occur mainly when payments are issued to beneficiaries that did not meet eligibility conditions, as well as in case of non-compliance with procurement or grant award rules.

Rules must be breached somehow when errors occur but in the great majority of cases, errors alone do not constitute cases of fraud.

In 2018, the Auditors found only nine instances of suspected fraud among the 700 financial transactions audited, promptly reported to the EU Anti Fraud Office (OLAF) which started investigations in cooperation with member states authorities.

As regards EU farming, this year the ECA checked 95 direct payments under the CAP scheme, finding 77 of them unaffected by material errors. These findings led the Auditors to the conclusions that direct payments, as a whole, were free from material error.

Direct payments constitute income support for farmers and amount to approximately €293 billion for the programming period under the 2014-2020 Multiannual Financial Framework (MFF), representing the lion’s share (72%) of the current EU farm budget heading ‘natural resources’.

However,  where things need to be improved is in rural development spending areas and market measures meant to support prices, where 40 out of 156 payments audited were found affected by errors.

Most common errors involve beneficiaries who had grants as young farmers and turned out to be not that young in the end, but also firms which should receive financial support for their small business dimension that then proved to be not that small.

In general, CAP direct payments constitute the biggest area of EU expenditure on which we give assurance, a senior ECA official explained to EURACTIV.com, adding that things are getting better in this area because conditionality does not pose big problems by now.

Commission throws the ball to EU states on CAP rural development, prioritises direct payments

The European Commission has proposed to cut the budget of the post-2020 Common Agricultural Policy by approximately 5%, but has prioritised the direct payments pillar in order to ensure farmers’ income and leave smallholders unaffected.

Lessons for next CAP

In a press briefing, the ECA President Klaus-Heiner Lehne said the main messages of this year’s report are that less bureaucracy makes rules easy to understand and be applied, but also that the EU policymakers should introduce control measures that produce results.

The EU Auditors also recommended the Commission take into account the weaknesses identified in the current framework to improve indicators and the efficiency of spending for the post-2020 programming period.

Asked by EURACTIV if the new environmental conditionality in the post-2020 CAP could add more red tape and therefore increase errors in the payments, Klaus-Heiner Lehne said this depends on the nature of new rules.

“If they are too complicated, of course, they will produce errors. If they are easy to understand and easy to handle, we won’t see such an increase,” he said, adding that it is something he cannot foresee at the moment.

An ECA senior official also said he does not see how the new environmental conditionality could make fraud more likely.

Considering what the Auditors found assessing the green payments, the official said it will mainly depend on how the schemes were designed at the technical level, and particularly if the criteria set are easy to apply.

The EU Auditors reiterated once again they welcomed the shift to a performance-based model in the next CAP. “But if you want to get there, you have to be measuring the right things, and you have to do it in a way that you can measure it,” stressed a senior ECA official.

At the same time, the Auditors called on the member states to make proper use of all the information at their disposal, in order to take preventive and corrective measures to avoid material errors.

Indeed, ECA found that, in 12 cases where they reported errors, the national authorities had sufficient information to prevent, or detect and correct, the error even before declaring the expenditure to the Commission.

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[Edited by Zoran Radosavljevic]

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