Fighting fraud in EU spending: action needed

Summary:

Protecting the EU’s financial interests against fraud is a key responsibility of the European Commission. The Commission ‘s own Directorates-General, Executive agencies and Anti-Fraud Office (OLAF) work with a large number of other organisations, including authorities in the Member States and the future European Public Prosecutor’s Office (EPPO). In this audit we assessed whether the Commission is properly managing the risk of fraudulent activities to the detriment of the EU budget.

We found that the Commission lacks comprehensive and comparable data on the detected fraud level in EU spending. Moreover, it has so far not carried out any assessment of undetected fraud, nor detailed analysis of what causes economic actors to engage in fraudulent activities. This reduces the practical value and effectiveness of the Commission’s strategic plans for protecting the EU’s financial interests against fraud. The current system, whereby OLAF’s administrative investigation of suspected fraud is followed by a criminal investigation at national level, takes up much time in a considerable number of cases and thus it decreases the chances to achieve prosecution. In addition, OLAF’s final reports often do not provide sufficient information to initiate the recovery of unduly disbursed funds. Fewer than half of OLAF investigations have led to prosecution of suspected fraudsters and resulted in recovery of less than a third of unduly paid EU money.

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Commentary and Analysis

OCCRP: News, 14/01/2019: Report: Billions in EU funds Lost to Fraud https://www.occrp.org/en/daily/9110-report-billions-in-eu-funds-lost-to-fraud

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News

Bloomberg, 10/01/2019: European Watchdog Faults EU Fraud Investigations https://www.bloomberg.com/news/articles/2019-01-10/european-watchdog-faults-eu-for-ineffective-fraud-investigations

Politico, 10/01/2019: In EU, it’s watchdog vs. watchdog https://www.politico.eu/article/eu-auditors-take-aim-at-anti-fraud-watchdog-olaf-european-commission-eu-spending/

France24, 10/01/2019: EU urged to 'step up' fight against spending fraud https://www.france24.com/en/20190110-eu-urged-step-fight-against-spending-fraud

EurActiv, 11/01/2019: Auditors’ anti-fraud policy recommendations are old news, Oettinger says https://www.euractiv.com/section/economy-jobs/news/auditors-anti-fraud-policy-recommendations-are-old-news-oettinger-says/

Deutsche Welle, 11/01/2019: Romania's EU presidency overshadowed by corruption cases https://p.dw.com/p/3BLnQ

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Official

ECA: Press Release, 10/01/2019: Anti-fraud policy needs to be reformed to improve the fight against fraud affecting the EU budget, say EU auditors https://www.eca.europa.eu/lists/ecadocuments/insr19_01/insr_fraud_risks_en.pdf

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