The 2011 accounts present fairly the financial position of the European Union and the results of its operations and its cash flows for the year. Revenue and commitments were free from material error. However, payments were affected by material error, with an estimated error rate of 3.9 % for the EU budget as a whole. The level of error remained similar to 2010 when it was 3.7 %.

In 2011 the EU spent € 129.4 billion, with around 80% on agriculture and cohesion policies where the task of implementing the EU budget is shared by the Commission and EU Member States. The ECA found too many cases of EU money not hitting the target or being used sub-optimally. Member States and Commission control systems examined were only partially effective in ensuring the regularity of payments. Control systems are not realising their full potential to prevent or detect and correct errors. There needs to be a greater degree of commitment on the part of national authorities to the management and control of EU money.

The error rate estimated by the ECA for spending in rural development, environment, fisheries and health policy group (the most error prone spending area) was 7.7 %. The estimated error rate for policy group regional policy, energy and transport remained high at 6.0 %.

For many years, the ECA has called for simpler spending schemes with clearer objectives, easier to measure results and more cost-effective control arrangements. The ECA’s recommendations come at a time when legislative proposals for the better management of EU money are being discussed.

“This Annual Report’s message is consistent with previous years’, but this year it matters more than ever. With Europe’s public finances under severe pressure, there remains scope to spend EU money more efficiently and in a better targeted manner”, said Vítor Caldeira, ECA President. “Member States must agree on better rules for how EU money is spent, and Member States and the Commission must enforce them properly. In this way, the EU budget could be used more efficiently and effectively to deliver greater added value for citizens.”

Comparison between 2010 and 2011 estimated most likely error rates for EU spending areas