Scandal with billions of euros spent for other purposes

Visitors receive information in front of the European Union (EU) stand during the International Agriculture and Animal Resources Exhibition. Photo: SIA KAMBOU /AFP

The watchdog also scrutinized the spending of €46.9 billion from the EU Economic Recovery Fund due to the coronavirus and issued a qualified opinion, which means that problems have been identified.

An audit of an EU-funded project in Spain to procure face masks at the start of the pandemic found that Spanish authorities used emergency laws to award the contract directly rather than through normal procurement procedures, but failed to carry out the necessary checks. The check showed that one of the contractor's administrators has a criminal record. The masks were not delivered on time until the end of April.

In Italy, a Berlin-funded cultural center was still not open to the public three years after it was renovated while equipment and furniture were being delivered. When auditors visited the building, they found only a poster highlighting unfinished construction work. The technology for the media library was delivered in 2019, but it has not yet been open sourced.

Auditors also visited sites outside the EU that received funding from Brussels. The European Commission (EC) has partnered with an international organization on a €17 million program to support vocational training. However, when auditors visited one school, they found that contracted laboratory equipment was not being used. Some items were still in storage unopened, and others were missing.

Another EU agreement with an international organization to provide healthier meals to schoolchildren in Malawi was worth €19 million, of which the EU paid €16 million. The organization rented a warehouse and contributed 33,000 euros to the project, including 4,700 euros of VAT. However, the VAT deducted is not classified as an eligible expense and should not be collected, the auditors said.

Auditors found problems with 11 of 13 pandemic recovery grants paid out in 2022. Other errors found in money linked to EU programs included 14 cases of suspected fraud. The report states that the EU has liabilities of €577 billion, assets of €455 billion and debts and risks of €344 billion, which are likely to increase as more loans and aid are sent to Ukraine.

< p>Auditors The increase in errors was blamed on the need to spend EU funds before they expired. Countries have until the end of this year to claim funds from the previous budget cycle, and coronavirus funds must be spent by 2026.

Tony Murphy, ESA president, told the website Politico: “The problem is this issue.” The thing about timing is that you can spend a lot more money in a short period of time.”

He added that this increases «the risk of either mistakes or suboptimal designs, or, in the worst case, it also means fraud.»

Frank Furedi, executive director of the Brussels think tank MCC said: «If the auditors had written such a damning report on the company, its chief executive and directors would have to resign.»