EU auditors warn of double payout risk amid shifting budget model

The EU’s budget is at increasing risk of duplicating payouts, as it shifts to a system that rewards reforms rather than reimbursing costs, the European Court of Auditors said in a report published on Monday.

It’s the latest broadside from the Luxembourg-based Court in a battle for the future of Brussels’ spending pot, which is worth €1.2 trillion over seven years and due to be rejigged starting next year. 

“Double funding is a misuse of EU funds and a waste of EU taxpayers’ money. And yet, the safeguards in place are largely insufficient,” Annemie Turtelboom, who led the audit report, said in a statement. 

Auditors take particular aim at the Recovery and Resilience Facility (RRF), a €648 billion Covid-era stimulus plan that the Commission said slashes red tape by handing more powers back to national authorities. 

But, Turtelboom told reporters, “the simplification goal has not been achieved – a promise of simplification came at a cost of control,” with financial safeguards sacrificed. 

At a conference last week, the Court of Auditors President  Tony Murphy bemoaned a lack of traceability in recovery funds, whose final recipient is often hidden from the public.  

That makes it hard if not impossible to check that there isn’t duplication with other EU funding streams – such as cohesion money, or funding used to invest in transport and energy infrastructure, the Court argues.

The problem even arises in “zero-cost” cases where member states receive EU funds in exchange for reforms that don’t incur any expense, the Court said.

It pointed to Malta, which received EU RRF funds after promising to adopt a strategy on economic specialisation that it was already supposed to have done to access research funding a decade ago. 

That spells trouble for the EU’s next seven-year financial framework, which  – according to leaked documents seen by Euronews – the  Commission is planning to centralise into a single pot, something already generating controversy in the European Parliament.  

Yet the Commission doesn’t appear swayed, rejecting the majority of the auditors’ findings, and saying it’s primarily for member states to detect and prevent any duplication.

A spokesperson for the EU executive said it “does not agree” with the ECA’s view that there’s a higher risk of double funding with outcome-focused instruments like the RRF, and that asking for extra checks on zero-cost measures was “not … aligned with the letter and spirit” of the underpinning RRF legislation.

The Court “did not identify any specific instances of double funding” as part of its audit sample, the Commission spokesperson said – though Turtelboom noted an example cited in last year’s annual report, and that two more suspected cases have come to light since the audit was finalised.