Debate: Presentation of the Court of Auditors' annual report
Date: WEDNESDAY, 18 OCTOBER 2023
Speaker: Johannes Hahn
Language: EN

Facing these unprecedented circumstances, it is even more important to direct funds to where they can make the greatest difference. In view of all this, 2022 was again an exceptional year for the implementation of the budget. Like in previous years, the Court has provided a clean opinion on the EU’s accounts for 2022, concluding that our figures are complete and reliable, transparently reporting on assets and liabilities, including from the new borrowing activities – which have been a major development and success of the Union’s financial system over the last two years. The Union’s accounts indeed disclose in particular all the information about liabilities and contingent liabilities. Concerning the repayment of debt under Next Generation EU, a plan was established at the time of the adoption of the pandemic recovery plan which ensures coverage of all borrowing in future budgets after 2028. Member States unanimously agreed to make available supplementary amounts to pay all the amounts owed. The Commission also transparently reports on the level of outstanding commitments – also known as  Like for the Union accounts, the Court has concluded that the revenue for 2022 is free from material error like in previous years. However, the Court has maintained its adverse opinion on the legality and regularity of expenditure under the Multiannual Financial Framework and has provided a qualified opinion on expenditure under the Recovery and Resilience Facility for 2022. Let me, however, recall that the error rate reported by the court is not a measurement of fraud or waste. The vast majority of errors are linked to ineligible costs, projects or beneficiaries. This is essentially due to a wrong understanding and application of the rules by beneficiaries, and that is why simplification of rules remains key to prevent errors from occurring. The Commission’s own assessment shows that the situation has remained overall stable over the last years. This does not mean that there are no errors and deficiencies in some programmes, but we are able to identify and report these deficiencies transparently and keep taking corrective measures hand in hand with national authorities. While we acknowledge that improvements are still needed and agree with the Court on the vast majority of the errors identified, we don’t necessarily have the same assessment of the extent and depth of the issues as reflected in the Court’s estimated level of error. We consider that a large number of national authorities are very well functioning, and we are working with the others to address the weaknesses identified. Also, in some specific cases, under cohesion policy and under the Recovery and Resilience Facility, we don’t entirely share the Court’s assessment. The Commission builds its assurance following a bottom-up approach. We work with and rely on the work of national authorities while keeping a supervisory role and taking action whenever necessary. This enables us to know where the weaknesses are and to target our actions accordingly. Since the funding programmes are multiannual, the Commission and Member States also deploy substantial efforts to perform controls after payment. These efforts are reflected in the estimated risk at the closure of the programmes, which we calculate at 0.9 % in 2022, fully in line with previous years’ levels and well below the 2 % materiality threshold. To conclude, as indicated before, the Court’s report rightly points to a number of remaining challenges. We will continue taking actions, notably to simplify rules, enhance our control systems and support beneficiaries, national authorities and other partners in the day-to-day management of European funds. So I am looking forward to a continued constructive cooperation in the 2022 discharge process with the Court, Parliament and Council, and let’s see that we get a very good result on this.