Be it the transportation of cattle and poultry on European roads, the ECB’s supervision of European bank risks, defence spending, growth and jobs, climate change, transition to a green and sustainable economy or the quest for more digital schools, the European Court of Auditors (ECA), in simple terms, the European Union’s independent external examiner, has had its say and continues examining revenue and spending across all schemes in EU member states financed by the EU Budget. The Baltic Times Magazine spoke with Tony Murphy, the new president of the ECA.
Please tell our readers what the European Court of Auditors (ECA) does, what is its mission?
The ECA is one of seven EU institutions, and we are based in Luxemburg. Being the European Union’s independent external auditor means that we are responsible for auditing EU finances and policy. In this context we are often referred to as the “guardian of EU finances” or the “EU’s spending watchdog”.
We annually carry out financial and compliance audits of the EU budget, with spending totalling €181.5 billion in 2021. Through this exercise we provide opinions on whether the revenue and expenditure that make up the EU accounts are reliable, and whether transactions underlying them are calculated correctly and comply with the legal and regulatory framework.
We also produce performance audits. This part of our work entails assessing whether the objectives of selected EU policies and programmes have been met, whether results have been achieved effectively and efficiently, and whether EU action has added value. Our performance audits cover a wide range of topics ranging from, energy security and sustainable food production to artificial intelligence and batteries.
Our work helps the other EU institutions and the member states to better manage and supervise the use of EU funds. Our work is particularly important to the European Parliament when deciding whether the EU’s accounts for the previous year are accurate and the funds were properly spent.
Through this work, our mission is to enhance citizens’ trust by improving accountability and transparency across EU action and to effectively respond to current and future challenges that the EU is facing.
You became the President of the ECA in September 2022, what are your priorities for your term in office?
On 20 September I was elected President of the ECA and officially took up my duties on 1 October 2022. My two main priorities as President are to further improve the efficiency of our organisation and engagement with our staff.
In terms of efficiency, I believe that in the current volatile economic climate we live in, coupled with the series of crises we are currently facing, it is important that we all try to do more with less. In the ECA, while our workload increases as the EU budget increases, it’s important that we look inward at our own processes and methodology to see if we can do things more efficiently. I believe there is huge potential for such efficiency gains through increased use of IT tools and data in our audits.
In terms of staff engagement, I strongly believe that our staff are our most important asset. As for most organisations, our success depends on their contributions through their knowledge, abilities and experience. We have all faced extraordinary circumstances and challenges in recent years and I thank our staff for their cooperation, flexibility and perseverance in that time. So, I intend to engage with them to make the ECA a more inclusive workplace, and to create an environment that allows them to meet their personal goals and aspirations.
It is important to note that as President, I am elected by the Members of the ECA as the “first among equals”. While the ECA is led by the President, the Members act together as a College and take decisions collectively. The ECA strategy 2021- 2025 sets our collective priorities and goals over these five years. Our three main goals are to:
- Improve accountability, transparency and audit arrangements across all types of EU action;
- Target our audits on the areas and topics where we can add most value and
- Provide strong audit assurance, in a challenging and changing environment.
What, in your opinion, are the most important tasks the ECA is undertaking this year?
We draw up our work programme with current and future challenges in mind. While we are still recovering from the effects of the global pandemic we are confronted with massive energy, security and migration crises caused by Russia's war of aggression against Ukraine.
These events have a considerable impact on the lives of the citizens of the European Union, its economic standing and global relations. The EU’s response comes in the form of legislative initiatives and the funding of targeted EU programs. Therefore, in planning our tasks we must be reactive to these initiatives and with this in mind, we focus our work programme on strategic priorities or other important areas.
In terms of the global pandemic, the ‘Recovery and Resilience Facility’ (RRF) is the centrepiece of the EU’s response to repair the social and economic damage it caused to member states’ economies. Under the ‘NextGenerationEU’ (NGEU) priority area, we will assess the RRF contribution to the digital transformation and the green transition, amongst others.
The EU aims to be at the forefront of the fight against global climate change. As such, ‘Climate change, the environment and natural resources’ represents another strategic priority area for the ECA. Over the next two years we plan to carry out 21 audits covering a wide array of topics, among them energy security, pollution, climate-related actions and sustainable food production. This year already, we published a special report on the Energy Union and we will soon publish a special report on climate targets.
Security and migration are also covered by our audit work under the strategic priority area ‘Resilience to threats to the Union’s security, and respect for the European values of freedom, democracy and the rule of law’. Some examples of audits we plan to publish this year will cover areas such as military mobility, aid for refugees and rule of law.
While it is fair to say that all tasks that the ECA undertakes are important, I believe that those focusing on the issues that impact EU citizens everyday lives are most important to them.
Taking into account the challenging times we live in, what reforms do EU institutions need to undertake in order to be more effective?
As technology advances and develops there is a need for EU institutions to react accordingly. As a consequence of the global pandemic, we adapted our working methods to use more digital tools, such as remote access to our systems and video conferencing with our auditees in the EU institutions and member states.
What is very clear is that digitalisation must be embraced as it has the potential to make not only the management, but also the auditing of EU funds more efficient. For example, access to IT systems can speed up the process of collecting and analysing the evidence stored therein. It is therefore important, that the Commission and other bodies implementing the EU budget address the challenges that they face in digitalisation efforts. Reducing technical and organizational barriers to the interoperability of their IT systems and data is one of the key challenges in this regard.
Another area where we see room for improvement is in the area of simplification of rules. Through our annual financial and compliance audits we continue to find a high number of errors which reflects that EU funds are not spent in line with the rules. This is often due to complex rules and eligibility requirements which also place an undue administrative burden on the bodies and beneficiaries that manage and receive the funds. Therefore, there is a need for further simplification in how EU funds are disbursed, which we have been advocating for a number of years and will continue to do so.