As happens within various member states of the European Union, taxpaying citizens often pause to ask themselves about the relevance, or lack of it, of national audit offices who are often referred to institutionally on a global level as supreme audit institutions (SAIs).
The same way that a national audit office can never be expected to assume the executive role and responsibility of any national government or authority, on the other hand, through its reports, conclusions, recommendations and suggested way forward, it can put its auditees on the spot and enhance public perception and awareness of certain shortcomings, endemic or not.
The summer months are ideal for some reflective thinking on the way forward for trans-European institutions like the European Court of Auditors (ECA) too. Primarily as to whether the disruptive times that we are living through have enhanced its relevance or dented it.
The impact of the pandemic on the EU and member states has been substantial, disruptive and highly asymmetric, particularly given that its timing, extent and exact nature, and the response to it, have varied greatly across the EU, also regionally and sometimes even locally, concerning public health, economic activity, labour, education and public finances.
Given that the EU has only limited power to act in most areas severely affected by the pandemic, partly because competence for public health is not exclusive to the EU, and partly because there was little preparedness or initial consensus among member states on a common response, these challenges posed a complexity of hurdles to overcome. As the court’s president stated: “The COVID-19 pandemic caused a multidimensional crisis that has affected nearly all area of public and private life, and that its consequences on the way we live and work in the future will be significant.”
The SAIs of the member states and the ECA have quickly undertaken many audit and monitoring activities. In addition to the 48 audits completed in 2020, more than 200 other audit activities are still going on or planned for the coming months.
Our findings made it clear that the EU’s oversight framework proved to be fragmented and poorly coordinated
Although not directly COVID- related, two very recent particular audits highlight the importance for stronger trans- European cooperation.
The first that comes to mind is an audit that found that EU funding for cross-border regions needs far better focus. This in spite of the fact that the so-called INTERREG programme is a long-standing instrument of EU cohesion policy, aimed at encouraging economic growth in border areas.
In the coming months, we also intend to focus on regional cooperation along the EU’s external borders – something that has become increasingly more topical, given the new hurdles to overcome.
Once back from the summer holidays, one of our top priorities will be that of publishing our findings about arguably the most sensitive and controversial of all migration dossiers: that linked to the effectiveness, or lack of it, of EU readmission policies to third countries within the context of its migrant returns policy. Something that has been identified as a key challenge in the recent proposed Migration and Asylum Pact that is still seeking across-the-board member- state support within the union.
Both the external borders audit and the one on cooperation with third countries on readmission will be and will remain the focal point of my team’s and my personal endeavours.
If our findings can be ignored by auditees only at their peril, the same applies for the court’s recent special report that found that EU efforts to fight money laundering in the banking sector have proved to be fragmented and implemented insufficiently.
Even more so that this fragmentation has unfortunately prevailed over the years in spite of the fact that the value of suspicious transactions within Europe is estimated to be in the hundreds of billions of euros.
The mind boggles when our findings made it clear that the EU’s oversight framework proved to be so fragmented and poorly coordinated, and thus failed to ensure a coherent approach and a level playing field.
Our finding, based on recent data that showed that over 75 per cent of suspicious transactions reported in the EU came from credit institutions in more than half of the member states, justifies our call for coherence in implementation as well as the use of regulations in preference to directives wherever possible.
Many were shocked by our revelation that the European Banking Authority has only made one positive finding of a breach of EU law related to money laundering and terrorist financing since 2010, and has not carried out a related investigation on its own initiative. Things cannot be done any more on an ad hoc basis or other knee- jerk considerations.
Once the summer period draws to an end, institutions like ours will soon find that their responsibilities, challenges and relevance have all been enhanced further.
Leo Brincat, member, European Court of Auditors