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On 5 October 2023, the European Court of Auditors published its annual report on the financial year 2022.
Every year, the Court audits the revenue and expenditure of the EU budget. Using estimates based on sample audits, the Court determines an "error rate". This is when EU budget has not been used properly due to an incorrect calculation or irregularity, such as the charging of ineligible costs.
The estimated error rate for the expenditure of the entire 2022 budget is 4.2% and has increased by 1.2% compared to the previous year. The Court of Auditors issues an adverse opinion on the EU’s spending in 2022 as widespread problems were found.
In the budget heading "Single Market, Innovation and Digital", which includes EU research funding, the estimated error rate is 2.7%, a decrease of 1.7% compared to the previous year 2021. The audit focused almost exclusively on Horizon 2020 projects.
In this year's report, the Court paid special attention to the Commission's procedures and guidelines for project funding in the form of lump sums in the area of research. The widespread expansion of this type of funding, the Court states, was not based on a comprehensive evaluation of the previous pilot projects with lump sums, but on surveys. When evaluating the lump sum project proposals, the experts were not provided with clear benchmarks for the appropriateness of the project costs. Furthermore, there is a lack of clear specifications and guidelines for funded projects as to when the requirements for the payment of lump sums for individual work packages have been met.
Accordingly, the Court's recommendations to the Commission are to evaluate lump sum funding in principle and to question the extent to which lump sums are suitable for projects with large budgets. Furthermore, the evaluation of lump sum project applications should be improved. Clear criteria for the disbursement of funding should be communicated to the beneficiaries. The Commission would also have to define the scope of the ex-post checks to be carried out for lump sum projects, whereby risk-prone areas such as compliance with procurement regulations would also have to be checked.
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