Anti-fraud policy needs to be reformed to improve the fight against fraud affecting the EU budget

The EU must step up its fight against fraud and the European Commission should ensure leadership and reconsider the role and responsibilities of its anti-fraud office (OLAF), as the current fraud investigation system has inherent weaknesses, according to a new report from the European Court of Auditors. Currently, the Commission lacks comprehensive information on the scale, nature and causes of fraud. This hinders the effective prevention of fraud against the EU budget, say the auditors.

Fraud is a hidden and complex phenomenon and protecting the EU’s financial interest against fraud requires comprehensive and systematic efforts. This is a key responsibility of the European Commission. The auditors assessed whether the Commission is properly managing the risk of fraudulent activities that are detrimental to the EU budget. In particular, they looked at the information available on the scale, nature and causes of fraud in EU spending. They examined whether the Commission’s strategic risk management framework is effective and whether OLAF’s administrative investigations lead to prosecution and recovery.

The auditors found that lacks comprehensive and comparable data on levels of detected fraud in EU spending. Moreover, it has not so far carried out any assessment of undetected fraud, nor detailed analysis of what causes economic actors to engage in fraudulent activities. This lack of knowledge reduces the practical value and effectiveness of the Commission’s plans to protect the EU’s financial interests against fraud, say the auditors.

“The perception among seven out of ten EU citizens is that fraud against EU budget happens rather frequently, even if the situation might be different. Unfortunately, anti-fraud activities to date are still insufficient”, said Juhan Parts, the Member of the European Court of Auditors responsible for the report. “It is time for real action: the Commission should set up an effective system to prevent, detect and deter fraudsters. A reform of OLAF will be the litmus test for the Commission’s commitment to fighting fraud.”