On 8 July 2024, the European Court of Auditors published its Overview of the Assurance Framework and the Key Factors Contributing to Errors in 2014-2020 Cohesion Spending, (Review 3, 2024)
The main findings of the ECA concerning compliance with State aid rules can be summarised in the following two tables.
1) Most frequent errors [2018-22] (% of all errors) and authority identifying them
| Type of error | ECA | Commission | National audit authorities |
| Ineligible expenditure | 63 | 34 | 47 |
| Public procurement | 8 | 37 | 18 |
| State aid | 10 | 6 | 2 |
| Missing information | 5 | 18 | 22 |
“Audit authorities tend to rely too much on beneficiaries’ self-declarations when verifying eligibility criteria and other requirements, such as […] applicants’ SME status, […], adherence to the de minimis ceiling for State aid, the absence of double funding”. [p. 31]
“EU State aid rules are based on the premise that State aid should only be allowed where it subsidises activities which would not have taken place otherwise. This “incentive effect” is automatically assumed for schemes under the General Block Exemption Regulation if works start after the date of the application for funding. […] We also found that the country’s national rules were not consistent with EU rules where incentive effects were concerned.” [p. 39]
“Nine member states account for 76 % of cohesion policy spending: Poland, Italy, Spain, Portugal, Hungary, Czechia, Romania, Greece, Germany. These member states account for 91 % of our estimated level of error.” [p. 40]
2) Root causes of errors
| Who [who caused the error] | How [how the error occurred] | Why [why the error was undetected] |
| Beneficiaries | -Non-compliance with the rules [perhaps deliberately]
-Inadequate knowledge |
-Inadequate knowledge
-Weak administrative procedures & lack of sufficient checks
|
| National managing authorities | -Inadequate knowledge
-Standard procedures -Inadequate verification |
|
| National audit authorities | -Insufficient audits |
Conclusions
First, the rate of errors with respect to State aid is relatively low, but the ECA and the Commission identify many more errors than national authorities.
Second, national authorities could have prevented many of the errors.
Third, administrative diligence enables detection and prevention of errors.
Fourth, the ECA found an inverse relationship between the size of expenditure and errors. This implies that “experience counts”. Authorities processing more applications committed relatively fewer errors.
Background report:
European Court of Auditors, More efforts needed to raise awareness of and enforce compliance with State aid rules in cohesion, (Special Report 24/2016).
https://www.eca.europa.eu/en/publications/SR16_24
See also:
European Court of Auditors, An overview of the assurance framework and the key factors contributing to errors in 2014-2020 cohesion spending, (Review 3, 2024).
swww.eca.europa.eu/ECAPublications/RV-2024-03/RV-2024-03_EN.pdf
