Originally posted by Troll
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https://fullfact.org/economy/did-aud...ign-eu-budget/
As in previous years, we've woken up to stories about the European Union failing to get a clean bill of health for its accounts.
As ever, the truth is nuanced. The European Court of Auditors (ECA), an EU body set up to examine the accounts of the Union, signed off on the 2014 accounts as reliable—something it's done for every set of figures since 2007. But it did find that payments made were materially affected by error.
It might sound counterintuitive that accounts can be signed off on as reliable while there are irregular payments being made. But the two can comfortably go hand in hand.
When the ECA signs off on the accounts, it's saying that they were prepared according to international standards, and present a "true and fair" view of the EU's finances.
The ECA is also asked whether the EU received income and made payments in line with the relevant rules and regulations. While income passed with flying colours, spending didn't.
The EU budget contained €142.5 billion of spending in 2014. In every area of the budget (apart from administration), and overall, enough spending fell outside of the proper procedures to pass the 2% ‘materiality threshold'—the point at which the auditors view these ‘errors' as significant.
Overall, 4.4% of the EU's spending didn't follow the rules and accordingly shouldn't have been paid out.
This can cover quite a wide range of situations and isn't synonymous with waste or fraud, according to the ECA.
For instance, one way to run afoul of the rules is to award an EU-funded contract directly without holding a proper bidding process. While generally this is a bad idea, it's not always the case that another firm would have been able to put in a lower bid.
Other issues are recipients of funding claiming costs that aren't eligible under the rules, and farmers over-stating how much land they have.
The ECA said that 22 of 1,200 transactions it inspected during the audit might have been fraudulent, and referred them for further investigation.
The Times' "€133.6 billion" figure appears to be for total spending on things other than administration. While it's correct that spending in that €133.6 billion was "materially affected by error", it's not the case that the entire block of spending was "irregular or possibly illegal"; it just means that some of the spending within that total didn't follow the rules. The same could be said of the entire €142.5 billion EU budget.
As ever, the truth is nuanced. The European Court of Auditors (ECA), an EU body set up to examine the accounts of the Union, signed off on the 2014 accounts as reliable—something it's done for every set of figures since 2007. But it did find that payments made were materially affected by error.
It might sound counterintuitive that accounts can be signed off on as reliable while there are irregular payments being made. But the two can comfortably go hand in hand.
When the ECA signs off on the accounts, it's saying that they were prepared according to international standards, and present a "true and fair" view of the EU's finances.
The ECA is also asked whether the EU received income and made payments in line with the relevant rules and regulations. While income passed with flying colours, spending didn't.
The EU budget contained €142.5 billion of spending in 2014. In every area of the budget (apart from administration), and overall, enough spending fell outside of the proper procedures to pass the 2% ‘materiality threshold'—the point at which the auditors view these ‘errors' as significant.
Overall, 4.4% of the EU's spending didn't follow the rules and accordingly shouldn't have been paid out.
This can cover quite a wide range of situations and isn't synonymous with waste or fraud, according to the ECA.
For instance, one way to run afoul of the rules is to award an EU-funded contract directly without holding a proper bidding process. While generally this is a bad idea, it's not always the case that another firm would have been able to put in a lower bid.
Other issues are recipients of funding claiming costs that aren't eligible under the rules, and farmers over-stating how much land they have.
The ECA said that 22 of 1,200 transactions it inspected during the audit might have been fraudulent, and referred them for further investigation.
The Times' "€133.6 billion" figure appears to be for total spending on things other than administration. While it's correct that spending in that €133.6 billion was "materially affected by error", it's not the case that the entire block of spending was "irregular or possibly illegal"; it just means that some of the spending within that total didn't follow the rules. The same could be said of the entire €142.5 billion EU budget.
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