The EU’s income and expenditure must be in line with sound financial management. It is the task of the European Court of Auditors (ECA) to monitor this. Zacharias Kolias is the Secretary General of this institution, which was founded in 1975. The Diplomatisches Magazin spoke to him about the work and current challenges of the Court of Auditors.
DM: Mr Kolias, in what cases does the European Court of Auditors (ECA) act? Could you give us some examples?
Zacharias Kolias: The ECA was established to audit the EU’s finances. The starting point for our audit work is the EU’s budget and policies, primarily in areas relating to growth and jobs, added value, public finances, the environment and climate action. The ECA audits both revenue and spending under the EU budget.
Our goal is to improve public accountability in the EU. The results of our work are used by the European Commission, the European Parliament, the Council, and the Member States to oversee the management of the EU budget and, where necessary, make improvements. Our work provides an important basis for the annual discharge, a procedure in which the European Parliament decides, on the basis of a recommendation from the Council, whether the Commission has implemented the previous year’s budget satisfactorily. We strive to produce high-quality audit reports which are clear, relevant and timely, which are based on sound criteria and robust evidence, and which address the concerns of all interested parties and are therefore viewed as important and authoritative documents. Some of our recent special reports cover topics like the Commission’s response to fraud in the Common Agricultural Policy, the use of external consultants at the Commission, and free movement in the EU during the COVID-19 pandemic. Through our work, we contribute to ensuring that spending tax money at EU level adds value, and that the EU’s actions bring about good results for EU citizens.
DM: How much does the ECA already cooperate with national Supreme Audit Institutions (SAIs) from new EU candidate countries such as Ukraine and Moldova? If there is cooperation with them, what does it look like?
Zacharias Kolias: We cooperate with all SAIs of countries subject to the EU enlargement policy. The aim of this cooperation is to facilitate regular exchanges and promote audit methodologies and training in line with EU and international standards. Our cooperation mainly takes place via the network of the SAIs of candidate and potential candidate countries. It involves heads of SAIs’ meetings and various activities at working level. We provide expertise to most of the network’s activities, together with SIGMA (a joint EU/OECD initiative) and other EU SAIs.
Since 1999, we offer five-month internships providing auditors from potential future EU SAIs hands-on experience of auditing EU funds. We also cooperate with the SAIs of Ukraine and Moldova at INTOSAI and EUROSAI level, for example in the working groups on environmental auditing and on the audit of funds allocated to disasters and catastrophes.
After the Russian invasion, we coordinated a common position of all EU SAIs to stand up for peace and solidarity with Ukraine, and refrain from any cooperation with the SAIs of the Russian Federation and the Republic of Belarus, which was circulated to all members of INTOSAI asking them to do the same.
Since Ukraine and Moldova gained EU candidate status, we are now exploring with them how to further develop our cooperation. Just recently, we invited five auditors from the SAI of Ukraine to work with us. They have been supporting us, very successfully, since July 2022.
DM: The goal of the ECA 2021-2025 Strategy is to broaden its audit mandate to all EU institutions. Why is the ECA not yet auditing all EU institutions?
Zacharias Kolias: Our mandate is to audit EU expenditure. We do audit EU institutions and bodies insofar as they manage EU funds – including the money they spend on their own functioning. Hence, we audit the administrative expenditure of every EU institution and body financed by the EU budget. The only exception is the European Central Bank: our mandate is limited to auditing the operational efficiency of the ECB’s management. The European Investment Bank (EIB) and the European Investment Fund (EIF) are jointly owned by the EU countries. However, their money does not come from the EU budget, so our mandate does not extend to auditing them.
As the institution responsible for the management of the bulk of the EU budget, the European Commission is our main auditee.
For a number of years, we have identified numerous accountability and audit gaps in the EU’s institutional and legal framework, particularly in those areas where the EU acts through an inter-governmental approach.
We believe that ECA should be mandated to audit all EU institutions and bodies set up by the Treaties, as well as all intergovernmental structures that are of key relevance to the functioning of the EU. This would help us achieve our goal of improving accountability, transparency and audit arrangements across all types of EU action.
DM: What challenges do the current economic and financial crises (pandemic, energy crisis, inflation) within the EU pose for the work of the ECA, notably for auditing the EU’s budget?
Zacharias Kolias: Our world has become more complex, contested and competitive than before – and it is changing at an unprecedented pace. When preparing our current strategy, we considered several newly arising issues. One of our main challenges will be related to the audit of the European Union Recovery Instrument (Next Generation EU – NGEU), which is intended to support recovery in the aftermath of the COVID- 19 crisis. In line with our duties and mandate, we need to ensure that NGEU is audited comprehensively. This includes extended work for our annual report, where we provide assurance on:
- the reliability of the accounts (financial audit)
- compliance with the rules (compliance audit)
We will also prepare special reports on different aspects of performance regarding the NGEU. Apart from that, we will face challenges, like everyone else, related to soaring energy prices and high levels of inflation, and the corresponding need to adapt our budget.
Interview Cristina Cöllen