Oireachtas Joint and Select Committees

Wednesday, 19 January 2022

Joint Oireachtas Committee on European Union Affairs

European Court of Auditors Annual Report 2020: Discussion

Mr. Tony Murphy:

I thank the Deputy. In terms of the GNI, as I said, I do not think we can anticipate the result but I do not think we have anything to worry about as such. I would not like to fully say it but it is not likely that we will have to pay more because our figures are the ones that are higher than anyone else in terms of this particular issue. Our investigation is not just linked to globalisation. It is looking at the GNI verification process as a whole, and globalisation was a very topical issue within that process. That is why they have decided to look at that as a specific component of the GNI audit.

Effectively, what we are auditing is how EUROSTAT, which is the central statistics office for the EU, is verifying these figures. As we said, those figures are very important in that they ultimately lead to the contribution of member states to the EU budget. We are, therefore, looking at it from a more global - not globalisation - aspect.

As I said, it is particularly interesting for Ireland because of all the different articles and issues over recent years with regard to the particular aspect of the GNI calculations. To be honest with the Deputy, it is in our chamber but we have deliberately stayed away from being directly involved as the reporting member, for instance, just so there is no potential conflict of interest, let us say. It is the standard policy that we would not audit our own member state in such a situation.

The Deputy is correct. In terms of the workload, we have a lot on our plate and we will have more. The multi-annual financial framework, MFF, is already a much-increased level of expenditure. The big unknown is the RRF, however. As I pointed out earlier, the scope of our audit and how far we will be able to go, because of the way it has been set up, may not be the kind of assurance we can give it. I will probably have responsibility for the statement of assurance on the RRF as well. It looks like that is coming my way.

As I said, however, in terms of legality and regularity, because it is a payment to the member state, from a pure first level compliance point of view, if the milestone or investment target has been reached, then the payment is due. That is the condition for payment. We will be checking that and then other things like protection of the EU budget etc. will probably be done by separate compliance or systems audits. The Deputy is right, however. We still do not know exactly the scope of it. There are roughly 40 RRF payments due this year and we will have to look at a lot of them. It is not like a policy area where we get an idea or take a representative sample for a policy area. Here, there are specific member state claims that are all different with no homogeneity between them. We will have to have a broad audit coverage in that regard.

We have been approved for 20 new posts. As members are all aware, negotiating with budgetary authorities in terms of additional staff is always a difficult process. I think we may have looked for 40. I am not exactly sure of the figures. We got 20 with an option to have a review, say, at the end of a year or so to see how it develops and if we have a better idea of the work we will have to do.

In terms of errors, as we said, because of the nature of the expenditure and Cohesion, we do not really feature very much. We were not included in the sample at all. As we stated in the presentation, we had four transactions audited for agriculture and we had one error because the stock density requirements were not met. As I said, most of the Directorates General, for instance, DG REGIO and the DG for employment, have big audit units and country desks where they follow member states. We would be looking at how they classify the control systems in the member states and I would say Ireland would generally be very favourably ranked. That is what I could confirm.