EUROSAI. Magazine N18 - 2012

> 33 < INFORMATION ON EU EUROPEAN ORGANISATION OF SUPREME AUDIT INSTITUTIONS www.eurosai.org No. 18 - 2012 On 6 November 2012 the European Court of Auditors published its annual reports on the implementation of the EU budget and the European Development Funds for the 2011 financial year. The objective of the annual reports is to provide findings and conclusions that help the European Parliament, Council and citizens to assess the quality of EU financial management, and to make useful recommendations for improvement. Central to the 2011 annual reports are the 18 th annual statements of assurance (or “DAS”) on the reliability of the EU accounts and the regularity of the transactions underlying them. Moreover, the 2011 annual report on the implementation of the EU budget includes two new chapters in order to provide more focused results on agriculture and cohesion, and it aids comparison between different areas and years by including comparative figures related to 2010 for the estimated error rates. It also brings more insight into EU performance management and measurement following the well-received introduction of this subject in the 2010 annual report. In 2011 , the EU spent € 129 . 4 billion, with around 80 % on agriculture and cohesion policies, where the task of implementing the EUbudget is shared by the Commission and EU Member States. As regards the reliability of the EU accounts , the ECA concluded that the 2011 consolidated accounts of the EU present fairly, in all material respects, the financial position of the Union as of 31 December 2011 , and the results of its operations and its cash flows for the year then ended, in accordance with the provisions of the Financial Regulation and the accounting rules adopted by the Commission’s accounting officer. As for the regularity of transactions , in the ECA’s opinion, EU revenue and commitments underlying the 2011 accounts were legal and regular in all material respects. In contrast, the ECA concluded that the examined supervisory and control systems were partially effective in ensuring the legality and regularity of payments underlying the 2011 accounts and that those payments were materially affected by error. The ECA’s estimate for the most likely error rate for payments underlying the 2011 accounts was 3 . 9 % for the EU budget as a whole, which means that the level of error remained similar to 2010 when it was 3 . 7 %. The ECA’s overall opinion on payments is supported by specific assessments of the policy groups. All individually assessed areas of EU spending were affected by material error with the exception of administrative and other expenditure ( € 9 . 8 billion) and external relations, aid and enlargement ( € 6 . 2 billion), although in the latter area the audited control systems were only partially effective and interim and final payments were affected by material error. For Agriculture: market and direct support ( € 43 . 8 billion) the estimated error rate was 2 . 9 %. Around three quarters of quantifiable errors were “accuracy” errors, with the most frequent being over-declaration by beneficiaries of land area when claiming for EU funds. The majority of errors amount individually to less than 5 % of the claim. The effectiveness of the control systems—notably the integrated administration and control system (IACS)— was adversely affected by inaccurate data in the various databases and incorrect administrative treatment of claims by the paying agencies. Rural development, environment, fisheries and health ( € 13 . 9 billion) was the most error prone area of EU spending with an estimated error rate of 7 . 7 % in 2011 . The majority of the most likely error rate concerned the eligibility of expenditure for non-area-related measures. In the area of rural development, the audit of the control systems revealed that administrative and on-the-spot Annual Report of the European Court of Auditors on the Implementation of the EU Budget concerning the 2011 Financial Year