Many people think that the EU budget is full of fraud, or that it’s wasted on things that have little to no impact on people’s everyday lives, only on the rich. While there are certainty issues in all budgets at some point, mechanisms exist to ensure that the EU budget is free from fraud and is spent in a way that has an added value on the citizens of Europe.
The European Court of Auditors main job is to produce a yearly report on how the EU budget was spent the year before. It checks if the money was raised and spent correctly, and if the EU’s accounts are accurate and reliable. Since 2007, the Court has continued to conclude that the EU accounts and accurate and reliable. They have refused to say the same (or ‘sign off’) for potential errors. This doesn’t mean that there was fraud necessarily, or that the money was misspent, however. It also evaluates whether the money was used effectively and efficiently – it had an impact on the lives of European citizens using no more money than needed. On the basis of all this, the European Parliament decides whether or not to grant the discharge (approval) of the yearly budget. This is an important way of ensuring oversight of how EU money is spent.
The European Anti-Fraud Office (OLAF) is tasked with investigating fraud against the EU budget, generally when they are tipped off by other actors. For example, there are current investigations into the potential misuse of EU funds by certain MEPs in the European Parliament. It also coordinates these investigations with national authorities for the most effective results.
Another key misconception is that the EU overspends or spends most of its budget on administration, which isn’t close to reality. For the Multiannual Financial Framework (or EU budget) from 2014-2020, approximately 6% of the spending is on administration. Also, the EU budget is generally only a tiny fraction of the money member states spend, approximately accounting for about 1% of the EU’s collective gross national incomes.
Both the Court of Auditors and the OLAF exist to ensure EU money is spent correctly, and is free from fraud. With the proposed introduction of the European Public Prosecutor’s Office in the next few years, another mechanism will exist to fight fraud against the EU budget. Both these institutions ensure that the EU budget generally isn’t wasted and is generally free from fraud. As well as that, the EU budget is a small amount of the member states expenditure, and a much smaller proportion than most people think is spent on administration.