The EU’s fight against fraud suffers from weaknesses in the way its key anti-fraud bodies exchange information, according to a recent report by the European Court of Auditors (ECA). This affects the number and timeliness of investigations, the European Commission’s oversight, and its wider role in protecting the EU budget.
In the audit, the last one during 2025, ECA looked into EU’s anti-fraud architecture which is made up of four bodies. Allegations of administrative irregularities are investigated by the European Anti-Fraud Office (OLAF), which is part of the Commission. Criminal investigations which could lead to prosecutions in national courts are carried out by the European Public Prosecutor’s Office (EPPO).
EPPO is competent to investigate cases if the criminal offence involves a damage to the EU budget of € 10,000 or more. It started to operate in 2021 after some teething problems when not all Member States agreed to join it. Participation takes the form of enhanced cooperation. Hungary which has not joined the EPPO has signed a working arrangement.
OLAF and EPPO are supported by the EU Agency for Criminal Justice Cooperation (Eurojust) and the EU Agency for Law Enforcement Cooperation (Europol), as well as by national authorities.
ECA’s own cooperation with EPPO is regulated in a Memorandum of Understanding (MoU) which was signed in September 2021. Former ECA President Klaus-Heiner Lehne welcomed the establishment of EPPO in 2019 as a step in the right direction but did not specify how it would improve the effectiveness of fraud investigations, prosecutions and recoveries.
Administrative versus criminal investigations
“Effective cooperation between all those fighting fraud, from EU investigators to national police and judicial authorities, is key to keeping fraudsters at bay,” said Katarína Kaszasová, the Slovakian ECA Member leading the audit. “However, our audit revealed that the EU’s fight against fraud suffers from weaknesses in the exchange of information between its key anti-fraud bodies – EPPO and OLAF.”
The ultimate objective of criminal investigations by EPPO and administrative investigations by OLAF is to protect the EU’s financial interests, ECA underlined in the audit. This can be achieved by sanctioning convicted criminals, and taking appropriate administrative measures, such as the recovery of funds, suspending ongoing contracts or exclusions from future funding.
Between 2022 and 2024, EPPO and OLAF received a total of 27 000 fraud allegations, with a clear upward trend for EPPO in this period. Of these allegations, a third were judged to merit an investigation and were registered in EPPO’s and OLAF’s case management systems: 40 % for EPPO and 26 % for OLAF.
Most fraud allegations to EPPO are reported from law enforcement authorities in the Member States (91 %). OLAF receives most allegations from EU institutions (68 %) and private parties. OLAF assessed 162 allegations as involving a suspected crime and transferred them to EPPO. The latter is more reluctant to avail itself of OLAF’s support and transfer fewer cases for complementary investigation.
“The ongoing review of EU anti-fraud architecture is a golden opportunity to right the system’s faults in terms of information exchange and oversight,” Katarína Kaszasová added, referring to the Commission’s own review of the anti-fraud architecture. The review was launched during the audit and resulted in a white paper in July 2025.
Some improvements in EU’s antifraud architecture have already been initiated by the Commission. However, the findings in the audit indicate that the cooperation between EPPO and OLAF is still affected by inefficient and suboptimal exchange of information or even mistrust. Furthermore, the Commission’s oversight of actual recoveries to the EU budget is insufficient.
“Fraud reporting obligations vary, and they lead to duplicate reporting to OLAF and EPPO,” Katarína Kaszasová explained at a press briefing about the report. “Currently, the system fails to ensure that all allegations reach EPPO, which means they are not assessed for potential criminal conduct. EPPO’s own exchange of information with OLAF is also limited.”
It also affects the Commission’s oversight of the repayments being made. “To put it bluntly, the Commission does not know whether all the money due to the EU budget is being repaid. It lacks a mechanism to monitor if recoveries imposed by courts have taken place and if the full amount due to the EU budget has been repaid.”
What also caught ECA’s attention was a substantial gap between EU Member States’ share of the EU budget and the number of fraud cases of fraud they report. None of these gaps and variations have been analyzed by the Commission, according to ECA. The auditors did not disclose the figures by Member State and referred to EPPO’s and the Commission’s annual reports for Member States data.
Why do OLAF and EPPO not have access to each other's registers of investigations to avoid overlap or double work?
“Both bodies are independent and have different data protection regimes,” ECA Member Katarína Kaszasová replied. “EPPO has a stricter framework as result of its Regulation and the criminal procedures requirements in each member state. Our first recommendation is designed to avoid this duplication of effort.”
No actual examples of double work were found as the auditors did not have access to individual cases. “But since EU bodies and institutions have a duty to report suspicions of fraud to both bodies, it is inevitable that some cases will be investigated by both.”
To what extent do they cooperate today?
"There is cooperation between the two, within the context of their different mandates (EPPO – criminal investigations; OLAF – administrative investigations). But one of the key messages of our report is that there is scope for more cooperation in the form of more information flows, and at an earlier stage, between them.”
Do you suspect underreporting of suspected fraud by the EU Member States and/or the European institutions?
Action at Member State level was not in the scope of our audit. However, a graph in our report shows the variations in levels of member state reporting, relative to their share of EU revenue and expenditure. Our second recommendation– accepted by the Commission - is that it should analyze – and act on - these variations.”
Acceptance with reservation
In its reply, the Commission agreed with ECA that the coexistence of administrative and criminal reporting channels needs to be optimized. It accepted all recommendations, although it questioned some of the findings. The varying level of reporting by Member States depends on the area of the budget and may be explained by certain objective external factors.
EPPO also welcomed the audit report and agreed that the EU Anti-Fraud Architecture needs to be further developed, “in particular to counter more efficiently organised crime groups defrauding EU revenue”. In its reply, EPPO highlighted the importance of its independence and the difference between administrative and criminal investigations.
This independence commands that the EPPO, as any other prosecution office, maintains full control of the information associated with its operational activities, according to EPPO. The need of complementary investigations is limited.
“Administrative investigations performed in parallel to criminal investigations may result in jeopardizing the ongoing criminal investigations by tipping off suspects, increasing the risk of evidence disappearing, weakening their admissibility in Court, or even by violating fundamental rights of suspects.”
ECA recommends that a ‘central repository’ should be established for an efficient exchange of information on fraud allegations and investigations. A condition for EPPO to support this is “that it would not result in creating a systematic and comprehensive information flow from the EPPO to OLAF (or any other administrative authority) concerning cases under EPPO investigation”.
