European and national parliaments will need to work more closely together in their scrutiny of public spending, to ensure EU money gets to the right people at the right time, and is spent on the right things, writes Vitor Caldeira.
Vitor Caldeira is president of the European Court of Auditors.
In November each year, the European Court of Auditors, as independent guardian of the EU’s finances, publishes its annual report. This year, our report comes at an interesting time. The EU has just come to the end of one seven-year cycle of public spending and is about to embark on another. So it is appropriate to reflect on how to make best use of our taxpayers’ money over the coming years to achieve Europe’s goals.
Europe’s citizens have a right to know three things about how their money is being spent: what it is being spent on, whether it is being spent properly, and whether it is delivering value. It is the European Commission’s job to provide information on the reliability of the EU’s accounts, the regularity of the financial operations and the results achieved. In turn, the Court of Auditors provides an independent assessment of how well those three tasks are being performed. This work helps the European Parliament meet its democratic responsibility for the oversight of spending.
Going forward, the European Institutions and the Member States have set themselves common objectives, including sound management of public finances which delivers results to citizens. But actually making it all happen is going to need much greater public accountability for the results achieved by EU spending; and that in turn will require a major change of mind-set by Europe’s politicians and its public officials.
To be sure, there needs to be a greater focus on results in meeting EU spending objectives and in financial management. However, there is no consistent view of what those objectives actually are at EU and national level. What is more, in the European Court of Auditor’s view, a number of opportunities have been missed in recent years by EU policy-makers to clarify objectives, simplify programmes and schemes, link payments more closely to results, make internal control systems more results-oriented, and enhance monitoring and evaluation arrangements.
If Europe’s citizens are to be convinced of the need for EU-level programmes they need to see the added-value they bring. For example, that in supporting the building or renovation of a seaport, they are not just paying for warehouses and docks but expect them to be used: for ships to berth, for cargo to be transferred to road and rail and for long-term jobs to be created both locally and elsewhere in Europe.
European and national parliaments will need to work more closely together in their scrutiny of public spending to meet EU objectives in areas such as agriculture, employment and research. It will need more systematic monitoring and evaluation of whether EU policy is actually having a positive impact on our citizens’ lives. It will also require future audits to place a greater emphasis on policy effectiveness
There are already rules in place to ensure the money gets to the right people at the right time, and is spent on the right things. However, rules only work when they are respected and, as our annual reports repeatedly highlight, EU spending rules are not always followed. The European Commission sometimes gets money back when they find it has been mis-spent by member states, albeit often many years later. But member states just pass the bill on to their national taxpayers. Surely, prevention is better than cure?
Achieving more effective management of the EU’s finances will not be straightforward. It is a problem which can be solved only through a partnership between EU and national authorities. The European Court of Auditors is very much part of this solution. We will offer guidance on the design and implementation of the new accountability arrangements and we will provide evidence and assurance of how financial managers have performed.
Strong public audit, adherence to the rules and a focus on value for money will put the interests of EU citizens at the heart of EU financial management.