The European Court of Auditors has been the EU’s external auditor since its establishment in October 1977. The ECA is based solely in Luxembourg. From the beginning, the ECA’s aim has always been to improve the way the Union’s finances are managed and contribute to public accountability regarding the raising and spending of the EU budget through assurance and advice.
The need for external control of the EU’s finances
The European Court of Auditors came into being at a time when the European Community (the forerunner to the EU) was seeking to become more democratically accountable to its citizens. Two key developments were the extension of the European Parliament’s powers in the area of budgetary control and the full financing of the European Community’s budget from its own resources. The Community became aware that it also needed a truly independent external auditor to help the Parliament and the Council ensure democratic control of its finances. Since the founding of the Community in 1958, this task had been performed by a small audit board which, as became increasingly apparent, did not have the necessary powers or resources to ensure the adequate audit of the rapidly-expanding budget.
ECA becomes the EU “financial conscience”
The main impetus for setting up the European Court of Auditors came from Heinrich Aigner, the chairman of the European Parliament’s Committee on Budgetary Control, who since 1973 had strongly argued the case for a Community-level external audit body. The ECA was established by the Treaty of Brussels of 22 July 1975 and started work in October 1977, with its headquarters in Luxembourg. Hans Kutscher, the President of the European Court of Justice, hailed it at the time as the Community’s financial conscience.
ECA becomes an EU institution
The ECA took its place as a fully-fledged European institution on 1 November 1993 with the entry into force of the Maastricht Treaty. Being given equal status with the Commission, Council and Parliament enhanced its independence and authority. The Maastricht Treaty also introduced what has since become a hallmark product of the ECA — the annual statement of assurance on the reliability of the EU accounts and the legality and regularity of the transactions underlying them.
ECA extends its audit mandate
The ECA’s role was further strengthened in 1999 with the entry into force of the Treaty of Amsterdam, which reaffirmed its independence and extended its audit powers to more policy areas. The treaty emphasised the ECA’s role in the fight against fraud and allowed it to apply to the Court of Justice in order to protect its prerogatives from infringement by the other EU institutions.
ECA starts cooperating more closely with Member States
The 2003 Treaty of Nice confirmed the principle that the ECA would be composed of one Member from each Member State and highlighted the importance of the institution’s cooperation with national audit bodies.
The Treaty of Lisbon, which came into force on 1 December 2009, again affirmed the Court’s mandate and status as an EU institution. Equally of interest to the ECA, the treaty introduced changes to the way EU funds are managed and scrutinised by strengthening the budgetary powers of the European Parliament and emphasising the Member States’ responsibility for implementing the budget.
ECA develops to meet the needs of the growing EU
The structure of the ECA has also developed as the EU has evolved. From nine Members and 120 staff in 1977, it now has 28 Members – in five chambers – and nearly 900 professional and administrative staff from all Member States. As an audit body of equal stature to the national supreme audit institutions (SAIs) operating in the Member States and beyond the borders of the EU, the ECA strives to be at the forefront of developments in public-sector audit, working with other SAIs to establish professional standards and good practices.
Since its establishment in 1977, the ECA has sought to contribute to improving EU financial management by producing high quality products that reflect EU developments and the changing needs of its stakeholders. Over this time the EU has welcomed new Member States, received new responsibilities, expanded its budget, and established new bodies at European level — all of which are taken into account in the ECA's work and reflected in its output.
As a result, the ECA’s publications have increased considerably from the two opinions issued in its first year of operation. The product range now includes annual reports, statements of assurance, specific annual reports, special reports, opinions and position papers. In recent years, the ECA has given greater priority to auditing the results of implementing EU policies and providing advice on how performance can be improved.