Debate: Presentation of the Court of Auditors' annual report
Date: WEDNESDAY, 19 OCTOBER 2022
Speaker: Tony Murphy
Language: EN

From the contributions, it’s obvious that the Recovery and Resilience Facility (RRF) is an item of concern for many of you. As I said in my introductory speech, it’s a particular challenge and one which is highly topical at the moment and will continue to be a challenge for us all going forward. I would like to just reemphasise that what we say in our opinion is that the assessment of the Commission, namely that the reforms in Spain have been met and the payment can be made legally and regularly on that basis, is the limit of the opinion. We are not saying that EU national financial rules are respected. In this case, however, because there’s no investment – it’s reforms in any case – so it’s very difficult for us to audit anything in that regard, because there are no associated costs. I would look at the RRF in terms of being a work in progress, particularly in terms of how the protection of the financial interests of the EU will be protected. I also see some need for a clarification in the responsibility and roles of the different players, due to the novelty of this delivery mechanism. There’s also a need for us all – both us and the Commission – to ascertain, on that basis, if there are any accountability gaps. The second issue that was mentioned most frequently was the error rate. The Commissioner has said that the error rate is just a snapshot, in a way. It’s just at a particular point in time. Nonetheless, it’s consistently around 2.5—3%. These are errors that are repeatedly happening. The Commissioner mentioned the control systems in the Member States. If we look at the cohesion chapter, we see that, in the work of the other authorities there, we find a lot of errors that have not been detected by the authorities. Therefore, we can’t rely on the work that the other authorities complete in terms of relying on the error rate. The problem for us is that this error rate, which is reported by the other authorities, is subsequently used by the Commission for their error rates. This might explain to Mr Lenaers from earlier why there is a difference between the Commission’s error rate and our rate. It is because we still maintain that those reported from national authorities are underestimated and are then subsequently incorporated into the Commission’s error rate. However, it’s also important to note that the 3% increase is probably in line with the trends normally towards the end of a programming period. Also, the fact that we have a higher proportion of high-risk expenditure – as someone mentioned that the error rate for high risk expenses is 4.7% – obviously has an impact on the overall error rate going up from 2.7 to 3%.  Someone, Madam Winzig, also mentioned in that context simplification. As a Court, we have consistently promoting the use of simplified cost options. Some Member States have used them more than others, but we are constantly behind that, because we see that as a way of avoiding complex cost reimbursements, which –we acknowledge all the time – contribute to errors systematically. Mr Kuhs also referred to the adverse opinion. The adverse opinion is because of the pervasive nature of these errors. There are over 63% of our other population has an error rate of 4.7%, and that is why we are well above the 2% materiality threshold. I think Mr Van Overtveldt also mentioned something about these new instruments, and it’s very important that we do look at flexibility of new instruments, but in a way that mitigates risk to an acceptable level and ensures accountability. Mr Chastel also mentioned data mining, which obviously from our perspective will be very beneficial and lead to efficiency gains. However, it obviously depends on the availability of data in the auditees, including the Commission. In terms of climate objectives, it was mentioned that maybe we should report more often than at the end of the seven-year period. We have a number of audits in the climate sphere, which are carried out by mainly by our chamber one. One is actually due to be published next year on climate targets specifically, and obviously part of our effort is also green tagging. A specific percentage of expenditure is supposed to be green, which obviously will be subject to audit. Finally, I would just like to take this opportunity to thank the staff of the European Court of Auditors for still, despite the difficult working conditions pre— and post—pandemic, delivering more or less the full work programme at a very high quality, despite all the challenges that we have encountered.  Lastly, I would just like to welcome Mr Christoforou to the Court. He starts with us on the 1 November 2022, and we look forward to engagement in a different capacity. Thank you very much.