According to a new report from the European Court of Auditors, EU Member States’ efforts to combat fraud on cohesion expenditure remain insufficient, with more than 4,000 potentially fraudulent irregularities affecting the EU’s financial interests identified between 2013 and 2017.
These represented almost €1.5bn of EU support, 72% of which concerned cohesion policy which is aimed at reducing economic and social disparities between members states, including the Cohesion Fund and the European Social Fund.
“Cohesion policy represents one third of the EU budget but accounts for nearly 40 percent of all reported fraud cases and almost three-quarters of the total financial amounts involved in these cases,” said Henri Grethen, the member of the European Court of Auditors responsible for the report.
“Member states, however, generally conclude that their existing anti-fraud measures are good enough. We consider this conclusion too optimistic.”
The auditors assessed the performance of national authorities in the “anti-fraud management process” – ranging from prevention and detection to response – and visited Bulgaria, France, Hungary, Greece, Latvia, Romania and Spain.
While authorities in these countries had improved their assessment of the risk of fraud and fraud prevention measures, the auditors said, their analysis was often “insufficiently thorough” and they generally had no specific anti-fraud policy.
The information procedures are also unsatisfactory, in the opinion of the auditors. “Not enough is reported in the cases, which affects the reliability of the fraud detection rates published by the European Commission,” they explain. Suspicions of fraud are not systematically reported to the competent bodies and coordination with other anti-fraud services is insufficient.
The European Court of Auditors has recommended that member states adopt formal strategies and policies to combat fraud against EU funds, strengthen their fraud risk assessment, and improve the way they use data analytics to battle corruption.
“Detection, response and coordination must be significantly strengthened to prevent and detect fraud and effectively deter fraudsters,” warns the audit body.