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Detection, response and coordination still need substantial strengthening to prevent, detect and deter fraudsters effectively.
Over 4,000 potentially fraudulent irregularities affecting the EU’s financial interests were identified between 2013 and 2017. These represented almost €1.5 billion of EU support, 72% of which concerned cohesion policy, including the European Regional Development Fund, the Cohesion Fund and the European Social Fund. Responsibility for fighting fraud in these areas lies primarily with the Member States.
The ECA assessed whether managing authorities and anti-fraud coordination services in Member States have properly met their responsibilities at each stage of the ‘anti-fraud management process’, from prevention and detection to response, including reporting on detected cases and recovery of funds unduly paid. To this end, the auditors visited seven Member States: Bulgaria, France, Hungary, Greece, Latvia, Romania and Spain.
The ECA also notes that Member States have not been responsive enough to all detected cases of fraud in EU cohesion spending and that corrective measures, when applied, have a limited deterrent effect. Reporting arrangements are also unsatisfactory. Cases are under-reported, which affects the reliability of fraud detection rates published by the EC. Additionally, suspicions of fraud are not systematically communicated to the appropriate bodies, and coordination with other anti-fraud bodies is insufficient.
While new rules for cohesion funds for 2021-2027 are being discussed, the ECA makes several recommendations on how to achieve better results. In particular, they ask Member States to:
• adopt formal strategies and policies to combat fraud against EU funds;
• make fraud risk assessment more robust by involving relevant external actors;
• improve detection measures by generalising the use of data analytics tools.