EC has insufficient anti-fraud information – ECA

The European Commission does not have sufficient information on the “scale, nature and causes of fraud in EU spending”, according to a report by the European Court of Auditors (ECA). They also said that “the current fraud investigation system has inherent weaknesses”.

In a statement following its report, the ECA explained that fraud is a complex phenomenon and that comprehensive efforts are needed to protect the EU’s financial interests. The report focused on the Commission’s capacity to manage fraudulent activities particularly detrimental to the EU Budget. Apart from looking for information regarding the nature of the problem, the ECA also looked at whether the EC’s risk management framework is effective, and whether OLAF’s investigations lead anywhere.

Juhan Parts, the Member of the ECA who ran the report, said that seven out of ten EU citizens believe that fraud detrimental to the EU budget “happens rather frequently” adding that “anti-fraud activities to date are still insufficient.” He then called for action, recommending that the Commission sets up “an effective system to prevent, detect and deter fraudsters.” Reforming OLAF shall be the first test of the Commission’s anti-fraud commitment.

The current system allowing national criminal investigation, according to the auditors, takes too much time and makes prosecution less likely. The ECA pointed out that out of the average of 17 cases a year OLAF makes recommendations on, less than half actually lead to prosecution. Additionally, although the European Public Prosecutor Office (EPPO) was seen as a step in the right direction, it still relies on national authorities and cannot urge Member States to allocate more resources to the cause.

Four recommendations by the ECA

The ECA made four final recommendations to the Commission. The first is for a “fraud reporting and measurement system” to be put in place addressing the information gaps the report found. Secondly, fraud risk-management and prevention should be indicated clearly in a Commissioner’s portfolio as well as adopting “a renewed anti-fraud strategy based on comprehensive risk analysis”.

The Commission were also asked to “intensify its fraud prevention and tools”, as well as reconsidering OLAF’s roles and responsibilities in light of the EPPO’s establishment. OLAF should be given a “strategic and oversight role” when it comes to anti-fraud action in the EU, the ECA added.