For summer 2015, our Just the Facts series will focus on the European Union’s institutions and agencies. This week we take a look at the European Court of Auditors

History
Located in Luxembourg, the European Court of Auditors (ECA) was established in 1977. The ECA began as an informal institution designed to audit the finances of the European Communities. It was given Treaty status by the Maastricht Treaty (1993) when it was made the fifth official institution of the EU. As an official institution, the ECA was given the power to bring claims against EU institutions and other Member States before the European Court of Justice.

Membership & Presidency
The ECA consists of 28 members, with one representative from each Member State. These appointments are made by the Council of Europe after consultation with the European Parliament. Each member is elected for a renewable term of six years. A president is appointed from the members for a renewable three year term. The current president of the ECA is Vitor Caldeira, a Portuguese national. He joined the ECA in 2000 and was first elected President in 2008.

During his first term (2008 – 2011), he oversaw a reform of the Courts structure and decision making process by introducing a chamber system. During his second term (2011-2014) Mr. Caldeira led the EU’s auditors through their toughest time to date, when the ECA opinions on pending financial legislation and auditing took on even greater importance because of the financial crisis. Throughout his third term (2014-2017) he aims to help solidify the EU’s financial recovery by providing an increased number of annual and special auditing reports in 2015, to ensure the maximum efficiency for the budgets of the various EU institutions.

What does the ECA do?
Despite the name, the ECA has no judicial functions. It is more like a professional external investigatory audit agency for the EU. The Court must be an independent body from the institutions that it audits. Therefore, it is free to choose what it will audit, how the auditing will take place, and how & when the auditors will present their findings. The ECA performs a number of key functions in relation to the EU’s budget;

• Auditing Service – To check that EU funds are correctly raised and spent by Member States and EU Institutions in order to promote cost effectiveness.
• Watchdog Function – The ECA performs spot checks on any individual, institution or Member State receiving EU funds. The ECA reports suspected cases of fraud or corruption to the European Antifraud Office.
• Annual Reports on the European Parliament and the European Council – These reports are to be considered by the European Parliament when it gives its opinion on the Commission’s proposed annual budget.
• Expert Opinions – The ECA provides the EU policymakers with financial advice for creating budgets

What are the ECA’s Audits?
The ECA carries out three main types of auditing

• Financial Audits – checking that the EU accounts are correct to ensure and present an accurate financial position for the year.
• Compliance Audits – Checking that financial transactions follow EU rules.
• Performance Audits – checking that the EU funds achieve its goals with the fewest possible resources and in the most economical manner.

Cooperation with National Audit Institutions & Overall Impact
Up to 80% of the EU’s budget management is shared with the Member States. Along with the Commission, the ECA work with the Member States to ensure that EU funds are spent correctly and in accordance with EU rules. In this respect the ECA has a supervisory role. External independent experts consider the quality of ECA reports as good and the EU Institutions find the reports helpful. This is represented by the high level of acceptance by the Commission of the ECA reports, as the follow up reports indicate their positive impacts. The Challenge for the ECA in coming years is to help improve its accountability towards public funds for citizens.

Irish Representation at the ECA
Kevin Cardiff is Ireland’s representative to the ECA. He began working for the Irish Government in 1984 with the Department of Public Service. In 1987 he moved to the Department of Finance where he worked for 23 years before moving to Luxembourg. Before he left his post at the Irish government he had been Head of the Taxation and Financial Services division with the Ministry of Finance.

Within the ECA he is a member of the fifth and final chamber of the Court. Whereas the first four chambers are charged with responsibility for the audit of the individually specific areas of EU expenditure, the final chamber, Coordination, Evaluation, Assurance and Development Chamber (CEAD) is responsible for coordination across all areas.

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