Court of Audit criticism:

Many EU projects in Austria financed twice

According to a report by the European Court of Auditors, the risk of EU funds flowing twice into one and the same measure is increasing. This leads to "double funding" - with a high risk of wasting taxpayers' money. This also applies to Austria, which was scrutinized more closely.

According to the Court of Auditors, "unprecedented sums" are available in Austria as part of the Corona Recovery Fund.

The danger arises because money from the recovery fund is not distributed according to actual costs, as is usual in other EU programs, but according to the achievement of defined targets.

The actual costs could be submitted twice
The EUR 648 billion coronavirus 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 for the same measure could then be submitted twice in Brussels.

Austrian infrastructure projects in the sights
As a concrete example, the ECA cites the Austrian measure "Construction of new railroad lines and electrification of regional railroads" as part of the Corona Recovery and Resilience Facility (ARF) in its report. The "milestone" due for the funds in 2025 includes the commissioning of the entire Koralmbahn, although the ARF only covers around 9 percent of the project costs. Work on the Koralm line was also financed as part of a CEF-funded project, as stated in the Austrian development plan.

The ACA warns that the description of the above-mentioned 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 will be reported and thus financed for both the CEF and the ARF.

ECA: emphasizes Austria wants to clear up ambiguities
In Austria - as in other selected Member States - the national management and control system to protect against double funding and four specific ARF measures were examined. However, the ECA emphasizes that "Austria is proactively seeking to clear up ambiguities with the Commission on issues of double funding".

"The risk of EU funds being misused and taxpayers' money being wasted in the event of double funding is high. Nevertheless, the existing protection mechanisms are inadequate," criticized Annemie Turtelboom, the member of the Court of Auditors responsible for the audit, at a press conference on Monday. "The ARF financing model should bring simplification. However, simplification should not mean that the EU's financial interests are less well protected."

The risk of EU funds being misused and taxpayers' money being wasted in the event of double funding is high. Nevertheless, the existing protection mechanisms are inadequate.

Annemie Turtelboom, Mitglied des EU-Rechnungshofs

"System is not ideal"
According to the ECA, the many administrative levels of the EU countries make coordination and supervision very difficult. At the same time, self-declarations by the recipients of funds serve as the basis for checks for double funding. "This system is not ideal," says auditor Turtelboom. Checks are mainly carried out manually, which makes broad-based monitoring impossible. As funding from the recovery fund is linked to the achievement of targets at national level, the EU Commission does not receive any details on local expenditure.

"Cost-neutral" initiatives as a further problem
According to the report, "cost-neutral" initiatives are another problem: Here, there are "no checks at all for double funding, as the Commission considers them risk-free", criticizes Turtelboom. The report mentions a potential case of an Austrian reform that is priced into the recovery plan with "zero", but is associated with considerable costs. The auditors recommend that the Commission strengthen controls on zero-cost measures. In addition, the definition of "double funding" should take this into account.

This is now being demanded of EU member states
The report also recommends greater coordination between funding programs and instruments as well as interoperable IT systems for data evaluation. The control requirements for systems relating to double funding should be "clarified and strengthened".

Shortly after the Court of Auditors completed this audit report, the first two potential cases of double funding with ARF funds were identified, according to the EU Commission. In view of their findings, the auditors see the fact that only two cases were identified as an indication that "the detection of double funding was more due to chance and that the existing instruments were neither suitable nor effective".