EU auditors call for more efforts in tackling fraud in cohesion spending

BRUSSELS, May 16 — Despite improvements in recent years, the efforts of European Union (EU) member states to tackle fraud in cohesion spending remain too weak, according to a new report released by the European Court of Auditors on Thursday.

The member states’ assessments of the effectiveness of their anti-fraud measures are too optimistic, said the report. Detection, response and coordination still need substantial strengthening to prevent, detect and deter fraudsters effectively.

According to the report entitled “Tackling fraud in EU cohesion spending,” over 4,000 potentially fraudulent irregularities affecting the EU’s financial interests were identified between 2013 and 2017.

The EU support affected by these irregularities was worth almost 1.5 billion euros (1.68 billion U.S. dollars), 72 percent of which concerned cohesion policy, including the European Regional Development Fund, the Cohesion Fund and the European Social Fund. Responsibility for fighting fraud in these areas lies primarily with the member states.

The auditors assessed whether managing authorities and anti-fraud coordination services in the member states have properly met their responsibilities at each stage of the anti-fraud management process, from prevention and detection to response, including reporting on detected cases and recovering funds unduly paid. To this end, the auditors visited seven member states: Bulgaria, France, Hungary, Greece, Latvia, Romania and Spain.

“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 also pointed out the lack of significant progress towards proactive fraud detection. Moreover, the impact of prevention and detection measures often remains insufficiently monitored and evaluated.
In addition, the auditors noted that member states have not been responsive enough to all detected cases of fraud in EU cohesion spending and that corrective measures, when applied, have a limited deterrent effect.
Reporting arrangements are also unsatisfactory. Cases are underreported, which affects the reliability of fraud detection rates published by the European Commission.

Additionally, suspicions of fraud are not systematically communicated to the appropriate bodies, and coordination with other anti-fraud bodies is insufficient. – XINHUA