The European Court of Auditors (ECA) has signed off the 2018 accounts of all 41 EU agencies as reliable and confirmed the positive results reported in previous years. In this year’s annual report, published last week, the auditors also gave all agencies an unqualified or clean audit opinion as regards their income and spending – except for the European Asylum Support Office (EASO).
The EU agencies are separate legal entities set up to carry out specific technical, scientific or managerial tasks to support the EU institutions. The executive agencies are located at the seats of the European Commission in Brussels and Luxembourg but the majority of agencies are decentralised and located in the Member States.
The number of agencies has increased over the years and, in 2019, stands at 43, including two currently being created and not covered in the audit report: the European Public Prosecutor Office and the European Labour Authority. In 2018, the total budget of all agencies amounted to €4,2 billion. They are mainly funded by the EU budget and to some extent by fees.
The two agencies located in London have already been relocated because of Brexit. The European Banking Authority (EBA) was moved to Paris and the European Medicines Agency (EMA) to Amsterdam.
“European agencies are a vital piece of EU architecture and our audit is an annual health check of their financial management,” said Rimantas Sadzius, the ECA Member responsible for the report.
“For 2018, we are giving all agencies except one a clean bill of health. In most agencies, however, improvements are still needed and we call for action to address weaknesses in financial management, mainly in the area of public procurement.”
According to the auditors, public procurement remains one of the most error-prone areas in the agencies’ financial management. The auditors identified various weaknesses, including use of inappropriate award criteria, acceptance of abnormally low bids and use of negotiation instead of more competitive procedures.
Asked by The Brussels Times if contracts resulting from irregular procurement are cancelled and if payments already paid out are recovered, Sadzius replied that it depends on the circumstances and that such contracts can be allowed to run to complete the works.
The auditors also remarked on the excessive dependency on contractors, consultants and temporary workers in the EU agencies. Some agencies use them to compensate for shortages of their own statutory employees but the auditors warned against the risk of conflict of interests.
Problems in EASO
In principle the agencies are supposed to be covered by the same internal control framework – including internal audit and legal controls – as the departments (directorates-general) of the Commission. However, these controls were missing in the European Asylum Support Office, which explains the shortcomings found in the office.
The office, with a budget of €98 million and 207 persons in permanent staff, manages the operations related to the refugee crisis in a decentralised environment, with several regional offices in mainly Italy and Greece. In the previous annual report, EASO was the only agency which received an adverse opinion.
This time it had improved and received a qualified opinion but the auditors again found irregularities in a major procurement in 2018, “which shows that the corrective actions have still not taken full effect”. Payments made in 2018 under irregular contracts from previous years amounted to €3.4 million or 4 % of the total payments in that year.
In addition, EASO’s staffing situation, not least its vacant managerial posts in administration, raises particular concern. In 2018, out of the approximately 569 experts deployed in Greece, some 243 (43 %) were interim workers. “As from the end of 2017, the human resources situation at the office had deteriorated exponentially,” says the report.
A source in the European Commission told The Brussels Times that the Commission is “pleased with the progress EASO’s new management team has made so far, and stands ready to continuing working closely with EASO to support the implementation of the Action Plan”. So far, the agency has completed 79 % of the 61 actions in its Governance Action Plan.
The Brussels Times