European auditors urged to improve value-for-money examinations

18 Mar 14

The European Court of Auditors has made significant progress over the past six years, but needs to improve the quality and timeliness of its performance audits, an international panel of public audit experts has concluded.

In a peer review, a panel of European Union member state auditors said the ECA had systematically followed up on the recommendation of the previous review, carried out in 2008.

The panel was led by the Bundesrechnungshof, Germany’s supreme audit institution, but also included French and Swedish public auditors.

They noted that the ECA had progressively developed its audit standards, manuals and guidelines since 2008 to comply with international professional standards. To support this, the court also now offered training on how to apply these standards and had also expanded its quality management system.

But the panel highlighted weaknesses in the way the ECA carries out performance audits, which provide a value-for-money assessment of European Commission systems, activities and programmes.

Historically, the ECA has focused more on compliance and regulatory audit, rather than performance audit.

While more efforts have been made to carry out performance audits in the past decade, these were ‘still largely influenced by the compliance audit methodology’, the panel’s review stated.

‘The peer review team believes that efforts need to be further strengthened to meet ECA’s objectives to develop sustainable capacity in conducting performance audits.’

It also noted that it takes around two years for the ECA to conduct a performance audit, something the court is aware of and taking steps to address. Simplifying the procedure and clarifying decision-making may to speed up the process, the report concluded.

EU Commission staff also told the review panel that ECA recommendations could sometimes be too vague.

‘The team’s own analysis of recommendations gives the same picture,’ the review said.

‘In developing audit recommendations, the ECA could more systematically consider whether they are convincing and how they can be implemented. The peer review team believes that the ECA would add value to the stakeholders by putting more emphasis on analysing the causes of problems, errors and weaknesses, for instance when performance is poor or varies between member states.’

Responding to the panel’s findings, ECA president Vitor Caldeira said: ‘We are very encouraged by this opinion issued by our peers.

‘It shows that we are an audit institution EU citizens can rely on, that we add value to the EU and it run better.’

In a letter to Bundesrechnungshof president Dieter Engels, Caldeira stated: ‘The court appreciates the peers’ constructive comments and recommendation which identify opportunity and challenges for us to further strengthen our performance audit practice.

‘As the peers recognise, we are undertaking as part of the court’s 2013-2017 strategy a range of initiatives designed to improve our performance audit practices with respect to the issues raised in the review. We intend to consider the conclusions and recommendations of the peer review report in these initiatives after a dialogue with our staff and stakeholders.’

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