On 30 October 2019, the European Court of Auditors (ECA) published its Work Programme for the year 2020, listing all the upcoming priorities, main challenges and key concerns for the EU’s finances. The 2020 Work Programme covers a wide range of areas and related problems the EU is currently facing, among them: the sustainable use of natural resources, migration, growth and inclusion, the single market, security and global development, and lastly, the need for an efficient and accountable EU – together they constitute the most salient issues for the EU. Examining all these areas should allow the ECA to establish whether the EU is delivering results as expected. But what is the role of ECA within the EU? How does it impact the EU’s budget and EU Member States’ finances? And why is publishing a yearly Work Programme so crucial?
European Court of Auditors (ECA): role, impact and spending areas
Created with the 1975 Budgetary Treaty and formally established in 1977, the European Court of Auditors was founded to improve the financial management of the EU and audit the EU’s finances. As the EU’s independent external auditor, its role consists of assessing the performance and added value of EU spending and regulatory action. ECA’s auditors therefore ensure that the EU and its Member States deliver the aimed financial results and meet their policy objectives listed in the yearly work programme, always seeking efficiency and accountability in the EU action. They are also responsible for guaranteeing that EU funds are raised, spent and faithfully accounted for, according to the current EU rules and regulations.
By committing to the goals listed in the published work programmes, the ECA promotes transparency and accountability while it warns the EU of potential risks and pays attention to both the successes and failures of the EU’s policy objectives. The European Commission, the European Parliament (EP), the Council and the Member States later employ these results of the ECA’s audit work to steer EU budgetary management and control. These results also represent an essential basis for the procedure of annual discharge, during which the EP evaluates whether the Commission has implemented satisfactorily the previous year’s annual budget. Within this context, ECA’s work programmes and special reports influence substantially the EP’s agenda and its focus: by setting the audit tasks and the resources allocated to them, the European Parliament and European Commission can act with foresight and arrange scrutiny activities in line with ECA’s objectives.
The challenges of COVID-19: adjusting and reformulating audit priorities
Nevertheless, the EU Member States are currently facing an exceptional challenge to public health and its infrastructures, as well as to their economy and finances, owing to the COVID-19 pandemic. For this reason, the ECA is currently trying to mitigate the effects of this health crisis on ECA’s employers and staff and take precautionary measures. Concurrently, it keeps providing an effective public audit service in the EU and delivering audit reports, reviews and opinions in line with the schedule.
Due to these extraordinary circumstances, the ECA President Klaus-Heiner Lehne recalls that now it is more crucial than ever that all European institutions build on previous efforts and attempts to further enhance the EU’s financial management and ensure that the Union still delivers on its commitments.
For the year 2020, EU auditors are placing their focus on the concept of ‘sustainability’. For this reason, throughout 2020, they will address climate change consequences, with special reports on pesticide use, plastic waste and biodiversity preservation. The ECA’s audit priorities for 2020 also include the area “Financing and administering the EU accountably and efficiently”, which includes evaluations of the EU’s response to a wide set of projects, such as China’s Belt and Road Initiative, as well as the assessment of other initiatives, such as the European Investment Advisory Hub. In this regard, the 2020 Work Programme expects to produce 41 reports, whose topics are selected in light of a reliable risk assessment related to EU spending and finances.
Special Report 11/2020: energy efficiency in buildings not sufficiently driven by cost-effectiveness rationale
Due to the challenge of mitigating climate change, in 2012 the Energy Efficiency Directive 2012/27/EU implemented as a target for 2020 a saving of 20% of the EU Member States’ energy consumption and of 32.5% by 2030. In order to achieve these targets, enhancing the energy efficiency in buildings (in particular residential ones) represents an essential step, as buildings consume the greatest share of energy, followed by transport and industry sectors.
However, the latest assessment of progress made by Member States toward energy efficiency targets has shown that the EU’s 2020 target is very unlikely to be met, due to the recent rise in EU energy consumption since 2014. While Cohesion Policy programmes for 2014-2020 have been allocated around 14 billion Euros from the EU and additionally Member States budgeted 5.4 billion Euros to improve the energy efficiency of buildings, this budget was at the end allocated to projects on a first-come-first-served basis, thereby overlooking and rarely prioritizing projects with higher energy savings at a lower cost.
Special Report 11/2020 concludes that a greater focus on cost-effectiveness is necessary, as a lack of comparative assessment of projects’ feasibility and merits, and of thresholds for cost-benefit calculation, still holds during the energy audit. Suggestions such as improving the planning, selection and monitoring of the investments to improve this cost-effectiveness rationale have been advanced.
The ECA will continue to provide EU citizens and policymakers with special reports on key issues for the future of the EU, highlighting what works well in these areas, and what does not.
By Costanza Marcellino, a research master student at FASoS.