On Thursday 13 September 2018 the European Court of Auditors (ECA) will publish a special report on how the European Commission and Member States tackled low absorption of EU Cohesion funds.
ABOUT THE AUDIT
The ECA examined the EU’s Cohesion policy spending during the 2007-2013 period and the action taken by Member States, with the support of the Commission, to increase the absorption of funds where problems were identified. The auditors assessed whether the Commission’s and Member States’ actions were effective in absorbing funding from the European Regional Development Fund, European Social Fund and Cohesion Fund. They carried out audit visits to four Member States: the Czech Republic, Hungary, Italy and Romania.
The report is expected to point out that Commission’s and Member States’ actions in the last years of the 2007-2013 programmes did tackle low absorption, but warn that they had insufficient focus on results. The auditors are expected to highlight risks concerning absorption for the current period and make a number of recommendations to the Commission, including on monitoring absorption and ensuring a focus on delivering results.
ABOUT THE TOPIC
The aim of Cohesion policy is to reduce development imbalances between regions in the European Union. Cohesion funds - accounting for around a third of the EU budget (i.e. €346 billion in 2007-2013, €365 billion in 2014‐2020) - are allocated in advance to Member States for a seven-year spending period and put at their disposal in annual budgetary allocations that must be used within a definite time period.
Absorption capacity refers to a Member State’s ability to efficiently and effectively spend the financial resources it has been allocated. Member States absorb funding when they receive a payment from the EU budget as co-financing towards eligible projects.
The ECA’s special reports set out the results of its audits of EU policies and programmes or management topics related to specific budgetary areas. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks to performance or compliance, the level of income or spending involved, forthcoming developments and political and public interest.