The risk that EU money will flow to the same measure twice is increasing, according to a report by the European Court of Auditors. This results in “double funding” – with a high risk of wasting taxpayers’ money. This also applies to Austria, which was further investigated.
According to the Court of Audit, there are “unprecedented amounts” available in Austria as part of the Corona recovery fund.
The danger arises because money from the recovery fund is not distributed on the basis of actual costs, as is usual in other EU programs, but on the basis of achieving certain goals.
The actual costs could be submitted twice
The €648 billion Corona Fund, the so-called cohesion policy funds and the Connecting Europe Facility (CEF) promote measures in similar areas such as transport and energy infrastructure. The actual costs could then be submitted twice in Brussels for the same measure.
Austrian infrastructure projects in sight
As a concrete example, the ERH mentions in its report the Austrian measure “Construction of new railway lines and electrification of regional railways” as part of the Corona recovery fund (Reconstruction and Resilience Facility, ARF). The “phase target” for the money to be paid by 2025 includes putting the entire Koralmbahn into service, although the ARF will only cover about 9 percent of the project costs. As part of a CEF-funded project, work on the Koralm Route was also financed, as stated in the Austrian Development Plan.
The Court warns that the description of the above milestone is not specific enough to rule out overlaps with the CEF-funded project. There is a risk that the result of the same work is reported and therefore funded for both the CEF and the ARF.
ERH: emphasizes that Austria wants to clarify any ambiguities
In Austria – as in other selected Member States – the national management and control system to protect against double financing and four specific ARF measures were examined. However, the ECA emphasizes that “Austria is proactively seeking to clarify any ambiguities with the Commission on issues of double financing”.
“The risk of EU funds being misused and taxpayers’ money wasted is high when there is double financing. Nevertheless, the existing protection mechanisms are inadequate,” criticized Annemie Turtelboom, the member of the Court of Auditors responsible for the audit, during a press conference on Monday. “The ARF financing model should provide simplification. “But simplification should not mean that the EU’s financial interests are less well protected.”
“System is not ideal”
According to the Court of Auditors, the many levels of government in EU countries make coordination and supervision very difficult. At the same time, the self-declarations of the financing recipients served as a basis for checking double financing. “This system is not ideal,” says auditor Turtelboom. Checks are mainly carried out manually, making large-scale checks impossible. Because support to the development fund is linked to achieving objectives at national level, the European Commission does not receive details about local expenditure.
“Cost-neutral” initiatives pose another problem
Another problem, according to the report, is ‘cost-neutral’ initiatives: there is ‘no control at all on double financing because the Commission considers them risk-free’, Turtelboom criticizes. The report mentions a possible case of an Austrian reform that is priced at ‘zero’ in the recovery plan, but which comes with significant costs. The auditors recommend that the Commission strengthen controls on zero-cost measures. Furthermore, this should be taken into account in the definition of “double financing”.
This is now being demanded by the EU member states
The report also recommends greater coordination between funding programs and instruments, as well as interoperable IT systems for data analytics. The control requirements for the systems regarding double financing should be “clarified and strengthened”.
Shortly after the Court finalized this audit report, the first two possible cases of double financing with ARF funds were identified, according to the European Commission. In light of their findings, the auditors consider the fact that only two cases have been identified as an indication that “the detection of double financing is more likely to be a matter of chance and that existing tools are neither appropriate nor effective”.
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
