European Court of Auditors

European Court of Auditors

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The Court of Auditors is the fifth institution
Institutions of the European Union
The European Union is governed by seven institutions. Article 13 of Treaty on European Union lists them in the following order: the European Parliament, the European Council, the Council of the European Union, the European Commission, the Court of Justice of the European Union, the European...

 of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 (EU). It was established in 1975 in Luxembourg
Luxembourg (city)
The city of Luxembourg , also known as Luxembourg City , is a commune with city status, and the capital of the Grand Duchy of Luxembourg. It is located at the confluence of the Alzette and Pétrusse Rivers in southern Luxembourg...

 to audit
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...

 the accounts of EU institutions. The Court is composed of one member from each EU member state and its current president (as of 2008) is Vítor Manuel da Silva Caldeira
Vítor Manuel da Silva Caldeira
Vítor Manuel da Silva Caldeira is the President of the European Court of Auditors. He was born in Campo Maior, PortugalHe has a degree in Law from the University of Lisbon and a postgraduate degree in European Studies from the European Institute of the Faculty of Law at that university.He was an...



The Court of Auditors was created by the 1975 Budgetary Treaty and was formally established on 18 October 1977, holding its first session a week later. At that time the Court was not a formal institution, it was an external body designed to audit the finances of the European Communities
European Communities
The European Communities were three international organisations that were governed by the same set of institutions...

. It replaced two separate audit bodies, one which dealt with the finances of the European Economic Community
European Economic Community
The European Economic Community The European Economic Community (EEC) The European Economic Community (EEC) (also known as the Common Market in the English-speaking world, renamed the European Community (EC) in 1993The information in this article primarily covers the EEC's time as an independent...

 and Euratom and one which dealt with the European Coal and Steel Community
European Coal and Steel Community
The European Coal and Steel Community was a six-nation international organisation serving to unify Western Europe during the Cold War and create the foundation for the modern-day developments of the European Union...


The Court did not have a defined legal status until the Treaty of Maastricht when it was made the fifth institution, the first new institution since the founding of the Community. By becoming an institution it gained some new powers, such as the ability to bring actions before the European Court of Justice
European Court of Justice
The Court can sit in plenary session, as a Grand Chamber of 13 judges, or in chambers of three or five judges. Plenary sitting are now very rare, and the court mostly sits in chambers of three or five judges...

 (ECJ). However its audit power related only to the European Community pillar
Three pillars of the European Union
Between 1993 and 2009, the European Union legally consisted of three pillars. This structure was introduced with the Treaty of Maastricht on 1 November 1993, and was eventually abandoned on 1 December 2009 with the entry into force of the Treaty of Lisbon, when the EU obtained a consolidated legal...

 of the EU, but under the Treaty of Amsterdam it gained the full power to audit finances of the whole of the EU.


Despite its name, the Court has no judicial functions. It is rather a professional external investigatory audit agency. The primary role of the court is to externally check if the budget of the European Union has been implemented correctly, in that EU funds have been spent legally and with sound management. In doing so, the court checks the paperwork of all persons handling any income or expenditure of the Union and carries out spot checks. The court is bound to report any problems in the Court's reports for the attention of other states and institutions, these reports include its general annual report as well as specific and special reports on certain bodies and issues. The Court's decision is the basis for the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

 decisions, for example: when the Court found problems in the management of EU funds in the regions of England
Regions of England
In England, the region is the highest tier of sub-national division used by central Government. Between 1994 and 2011, the nine regions had an administrative role in the implementation of UK Government policy, and as the areas covered by elected bodies...

, the Commission suspended funds to those regions and prepared to fine those who did not come back up to acceptable standards.

In this role the Court has to remain independent yet remain in touch with the other institutions, for example a key role is the presentation of the Court's annual report to the European Parliament
European Parliament
The European Parliament is the directly elected parliamentary institution of the European Union . Together with the Council of the European Union and the Commission, it exercises the legislative function of the EU and it has been described as one of the most powerful legislatures in the world...

. It is based on this report that the Parliament makes its decision on whether or not to sign off the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

's handling of the budget for that year. The Parliament notably refused to do this in 1984 and 1999, the latter case forced the resignation of the Santer Commission. The Court, if satisfied, also sends assurances to the Council and Parliament that the taxpayers money is being properly used and the Court must be consulted before the adoption of any legislation with financial implications but the opinion is never binding.


The Court is composed of one member from each EU state who are appointed by the Council of the European Union
Council of the European Union
The Council of the European Union is the institution in the legislature of the European Union representing the executives of member states, the other legislative body being the European Parliament. The Council is composed of twenty-seven national ministers...

 for a renewable term of six years. They are not all replaced every six years, however, as their terms do not coincide (four of the original members began with reduced terms of four years for this reason). Members are chosen from people who have served in national audit bodies, who are qualified for the office and whose independence is beyond doubt. While serving in the Court, members cannot engage in any other professional activities. As the body is independent, its members are free to decide their own organisation and rules of procedure, although these must be ratified by the Council of the European Union
Council of the European Union
The Council of the European Union is the institution in the legislature of the European Union representing the executives of member states, the other legislative body being the European Parliament. The Council is composed of twenty-seven national ministers...

. Since the Treaty of Nice, the Court can set up "chambers" (with only a few Members each) to adopt certain types of reports or opinions.

The Court is supported by a staff of approximately 800 auditors, translator
Translation is the communication of the meaning of a source-language text by means of an equivalent target-language text. Whereas interpreting undoubtedly antedates writing, translation began only after the appearance of written literature; there exist partial translations of the Sumerian Epic of...

s and administrators. Auditors are divided into auditor groups which inspect and prepare draft reports for the Court to take decisions upon. Inspections take place not only of EU institutions but any state which receives EU funds given that 90% of income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...

 and expenditure is managed by national authorities rather than the EU. Upon finding a fault the Court has no legal powers of its own and instead informs OLAF
The European Anti-fraud Office is charged by the European Union with protecting the financial interests of the European Union: Its tasks are to fight fraud affecting the EU budget, as well as corruption and any other irregular activity, including misconduct, within the European Institutions, in an...

 which is the EU's anti-fraud agency. The court is also assisted by the Secretary-General of the European Court of Auditors
Secretary-General of the European Court of Auditors
The Secretary-General is the European Court of Auditors most senior member of staff.Appointed for a renewable term of 6 years,he is responsible for the management of the Court's staffand for the administration of the Court....

, elected by the court, who draws up draft minutes and keeps archives of decisions as well as ensures the publication of reports in the Official Journal of the European Union
Official Journal of the European Union
The Official Journal of the European Union is the official gazette of record for the European Union . It is published every working day in all of the official languages of the member states. Only legal acts published in the Official Journal are binding.It was first published on 30 December 1952 as...

 along with general management and assistance to the President.


The members then elect one of their members as the President of the Court for a renewable three year term. The election takes place by a secret ballot of those members who applied for the presidency. The duties of the President (which may be delegated) are to convene and chair the meetings of the Court, ensuring that decisions are implemented and the departments (and other activities) are soundly managed. The president also represents the court and appoints a representative for it in contentious proceedings.

At present the President is Vítor Manuel da Silva Caldeira (of Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...

), elected in 2007. Previous presidents have been Sir Norman Price (1977, United Kingdom), Michael Murphy (1977, Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...

), Pierre Lelong (1981, France), Marcel Mart (1984, Luxembourg
Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...

), Aldo Angioi (1990, Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

), André Middlehoek (1992, Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

), Bernhard Friedmann (1996, Germany), Jan O. Karlsson
Jan O. Karlsson
Jan Olov Karlsson , Swedish politician, former President of the European Court of Auditors, and former Minister for Development Cooperation, Migration and Asylum Policy from 2002 and from September 11, 2003 to October 10, 2003 acting Minister for Foreign Affairs, following the murder of Anna...

 (1999, Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....

), Juan Manuel Fabra Vallés (2002, Spain) and Hubert Weber
Hubert Weber
Hubert Weber was the President of the European Court of Auditors from 2005 until January 2008. He was born in Vienna in 1939 and is a Doctor of Law of the University of Vienna....

 (2006, Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...


Declaration of Assurance

Since 1994 the Court has been required to provide a "Declaration of Assurance", essentially a certificate that an entire annual budget can be accounted for. This has proved to be a problem, as even relatively minor omissions require the Court to refuse a declaration of assurance for the entire budget, even if almost all of the budget is considered reliable.

This has led to media reports of the EU accounts being "riddled with fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...

", where issues are based on errors in paperwork even though the underlying spending was legal. The auditing system itself has drawn criticism from this perception. The Commission in particular have stated that the bar is too high, and that only 0.09% of the budget is subject to fraud. The Commission has elsewhere stated that it is important to distinguish between fraud and other irregularities. The controversial dismissal in 2003 of Marta Andreasen
Marta Andreasen
Marta Andreasen is an Argentine-born Spanish accountant, employed in January 2002 by the European Commission as Chief Accountant, and notable for raising concerns about flaws in the commission's accounting system which she felt left the commission vulnerable to potential fraud...

 for her criticism of procedures in 2002 has called into doubt the integrity of the institutions.

It is frequently claimed that annual accounts have not been certified by the external auditor since 1994. In its annual report on the implementation of the 2009 EU Budget, the Court of Auditors found that the two biggest areas of the EU budget, agriculture and regional spending, have not been signed off on and remain "materially affected by error."

Terry Wynn
Terry Wynn
Terence ‘Terry’ Wynn was a Member of the European Parliament for North West England for the Labour Party. He was a member of the European Parliament between 1989 and 1994 for Merseyside East and between 1994 and 1999 for Merseyside East and Wigan...

Member of the European Parliament
A Member of the European Parliament is a person who has been elected to the European Parliament. The name of MEPs differ in different languages, with terms such as europarliamentarian or eurodeputy being common in Romance language-speaking areas.When the European Parliament was first established,...

 who served on the Parliament's Committee on Budgetary Control
Committee on Budgetary Control
-Responsibilities of the committee:As the name suggests, the CONT is the European Parliament committee charged with producing reports relating to the European Union's Budget.-Membership: Members of the Committee -External links:*...

, reaching the position of chairman, has also backed these calls stating that it is impossible for the Commission to achieve these standards. In a report entitled 'EU Budget – Public Perception & Fact – how much does it cost, where does the money go and why is it criticised so much?', Wynn cites consensus that practice in the EU differs from that in the US. In the US, the focus is on the financial information, not on the legality and regularity of the underlying transactions, 'So, other than in Europe, the political reaction in the US to the failure to obtain a clean audit opinion is only "a big yawn"'.

By comparison, the Auditor General
Comptroller and Auditor General
Comptroller and auditor-general is the abbreviated title of a government official in a number of jurisdictions, including the UK, the Republic of Ireland, India, and China....

 for the United Kingdom stated that there were 500 separate accounts for the UK and "in the last year, I qualified 13 of the 500. If I had to operate the EU system, then, because I qualify 13 accounts, I might have to qualify the whole British central government expenditure". Despite the problems, the Barroso Commission
Barroso Commission
The Barroso Commission is the European Commission that has been in office since 22 November 2004 and is due to serve until 2014. Its president is José Manuel Barroso, who presides over 26 other commissioners...

 has stated that it aims to bring the budget within the Court's limits by the end of its mandate in 2009.

The ECA made clear in their 2010 year report, “Responsibility for the legality and regularity of spending on Cohesion Policies starts in the Member States, but the Commission bears the ultimate responsibility for the correct implementation of the budget.” And in previous reports, the ECA has noted, "Regardless of the method of implementation applied, the Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of the European Communities (Article 274 of the Treaty)."


The size of the court has also come under criticism. Based on the one member per state system its members grew from nine to twenty-seven as of 2007. Attempting to get consensus in the body has thus become more difficult leading to the number of its special reports per year shrinking from fifteen to six between 2003 and 2005 despite its staff growing by 200 over the same period. Some proposals have been for the size to be reduced to five members or just one, possibly with an advisory board with members from each member state. However, neither the European Constitution
Treaty establishing a Constitution for Europe
The Treaty establishing a Constitution for Europe , , was an unratified international treaty intended to create a consolidated constitution for the European Union...

 nor the Lisbon Treaty proposed any changes to this system despite calls to address it by former court members and MEPs.

See also

  • National Audit Office (United Kingdom)
    National Audit Office (United Kingdom)
    The National Audit Office is an independent Parliamentary body in the United Kingdom which is responsible for auditing central government departments, government agencies and non-departmental public bodies...

  • Cour des Comptes
    Cour des Comptes
    The Court of Audit is a quasi-judicial body of the French government charged with conducting financial and legislative audits of most public institutions and some private institutions, including the central Government, national public corporations, social security agencies , and public services...

  • Chamber of Accounts (Greece)
    Chamber of Accounts (Greece)
    In Greece, the Chamber of Accounts is both an administrative organ and a Supreme Administrative Court with a special jurisdiction...

  • Swedish National Audit Office
    Swedish National Audit Office
    The Swedish National Audit Office audits the activities of the Swedish government. All government agencies are required to submit copies of their annual accounts and reports to this office for review....

  • Government Accountability Office
    Government Accountability Office
    The Government Accountability Office is the audit, evaluation, and investigative arm of the United States Congress. It is located in the legislative branch of the United States government.-History:...

  • Australian National Audit Office
    Australian National Audit Office
    The Australian National Audit Office is the national auditor for the Parliament of Australia and Government of Australia. It reports directly to Parliament but is administratively located in the Portfolio of Prime Minister and Cabinet....

  • National Audit Office of the People's Republic of China
    National Audit Office of the People's Republic of China
    The National Audit Office of the People's Republic of China is the supreme audit institution in the People's Republic of China. It was established in 1983 according to the Constitution...

External links

  • European Court of Auditors page on European NAvigator
    European NAvigator
    European NAvigator was the former name of the digital library on the history of European integration and related institutions. The research project is now online at, a website dedicated to European integration studies....