Health

Over €7M of suspect spending by EU asylum agency

More than a tenth of the payments made by the EUs asylum agency last year, amounting to €7.7 million, involved non-compliance with EU financial rules, according to the body that audits the finances of EU agencies.

The European Court of Auditors points to “the critical situation in the human resources” at the Malta-based European Asylum Support Office (EASO) as contributing to its budgetary malpractice — mainly relating to public procurement and recruitment.

The executive director of the agency, José Carreira, resigned following a POLITICO investigation into allegations of staff harassment, including “psychological violence,” and an investigation by the blocs anti-fraud office.

The auditors “issued an adverse opinion due to material and systematic instances of non-compliance of payments with the Offices Financial Regulation and other applicable rules and provisions, mainly related to public procurement and recruitment procedures underlying payments.”

In general, however, the Luxembourg-based Court of Auditors gave the 41 EU agencies and other bodies a clean bill of health for their 2017 accounts, according to its annual report.

The reliability of EU agencies financial accounts is “improving,” a representative of the court told reporters in Brussels Tuesday, adding that there were tensions with a few agencies during audits.

The Court of Auditors has a policy of not allowing individual auditors to be quoted by name.

But despite their overall positive assessment, in their report the auditors found weaknesses in public procurement in 14 agencies.

The court, which despite its name has no judicial function, also raises concerns about the potential impact of Brexit on the future finances of three agencies. The European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority all receive part of their funding directly from national governments. In future, that portion of their budget is likely to be smaller because of the loss of the U.K.s financial contribution.

“It is possible that the authorities revenue will decrease in future as a result of the UKs decision to leave the EU,” the report reads.

The auditors also warn that five European agencies “did not carry out a comprehensive analysis of the likely Brexit impact on their organisation, operations, and accounts.”

The report notes that due to Brexit, the European Medicines Agency plans to move to temporary premises in Amsterdam at the beginning of 2019 and the “Agencys accounts include provisions for related costs amounting to €18.6 million.”

Nevertheless, the auditors point out that “the lease agreement for the Agencys current premises in London sets a rental period until 2039 with no exit clause. The notes to the accounts disclose an amount of €489 million remaining rent until 2039, of which a maximum amount of €465 million corresponding to the lease period after the Agencys planned move to Amsterdam is disclosed as a contingent liability.”

The European Banking Authority also faces challenges due to its move but not to the same extent, due to a more flexible rental agreement: The EBAs move to Paris “is planned for the beginning of 2019 and the Authoritys accounts include provisions for related costs amounting to €6.7 million and disclose €11.2 million remaining future contractual payments as scheduled for the office in London,” the auditors write.

The auditors report that budgetary management in general among the agencies improved in 2017, with fewer instances of carryovers of budget appropriations from one year to the next.

At the same time, two agencies — Frontex and the European Union Intellectual Property Office — canceled appropriations carried over from the previous two years, which the auditors describe as an indication of “overestimation of budgetary needs.”

The court also raises concerns about weaknesses of the internal control standards at three agencies, including Frontex.

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