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25th May 2019

EU agencies prone to financial errors

The EU's 36 regulatory agencies are prone to financial errors, as they are remote from Brussels and report only to their own managing board, audit officials said on Tuesday (3 November).

"[The number of] regulatory agencies is mushrooming. They are independent legal entities and it's up to give them discharge [sign off their accounts], just as you do with the European Commission," EU audit commissioner Siim Kallas told MEPs in the budgetary control committee.

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  • Commissioner Kallas said there are too many EU agencies (Photo: European Commission)

The meeting with the EU lawmakers was aimed at laying the groundwork for the control of last year's budget, which will start once the Court of Auditors publishes its report on EU's 2008 expenses next week.

Last year, the Court found that one of the agencies, the European Police College (Cepol), used EU money to buy personal cars, furniture and mobile phones for its staff. The European Parliament subsequently refused to sign off Cepol's accounts. Its budget has since been scaled down and an investigation by the EU anti-fraud office (Olaf) on the €22,000 in question is ongoing.

Based in a British village outside London, Cepol was established in 2005 to organise joint training sessions for European police officers. Apart from Cepol, the EU also has Europol, the police co-operation agency based in the Hague.

"Agencies are more prone to financial errors because they are new institutions, set up somewhere away from Brussels. But so far we haven't identified any serious embezzlement or fraud cases," Brian Gray, the commission's internal auditor told this website. His team of 115 auditors is mandated to carry out inspections and audits in all institutions financed by the European Commission, including the agencies.

Among its 36 agencies, which cost yearly more than €1.2 billion to run, only five are to some extent self-financing, by selling patents or claiming fees for their services. Some of the agencies, created 30 years ago, have since been duplicated by others, similar in scope.

For instance, there are two agencies dealing with education and training: the European Training Foundation, established in 1994 and based in Turin, Italy, which focuses on "improving education and training systems in EU partner countries," and the European Centre for the Development of Vocational Training, established in 1975, which does the same thing within the EU.

A review of all the EU agencies is expected by the commission's services by the end of this year. Closing down or merging existing agencies is highly unlikely to happen, however, since member states see it as a matter of national pride to host one of the bodies.

"The system of European agencies is ambiguous and confusing, due to the lack of a common framework. The delegation of powers to European agencies also raises questions about the accountability of European agencies and the legitimacy of their actions," a recent paper published by the Centre for European Policy Studies, a Brussels-based think tank says.

Auditor: EU agencies mismanaging their budgets

A report by the European Court of Auditors has found several problems in the way EU's 31 agencies manage their budgets. The findings are likely to fuel the debate about the usefulness of these bodies at times of austerity.

Anti-fraud office targets EU agencies

The EU's anti-fraud body, Olaf, has devoted "particular attention" to investigations targeting the bloc's own institutions, especially newly-created agencies prone to fraud and embezzlement, its 2009 activity report shows.

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