Cohesion policy: A management audit

This Policy Paper addresses a paradox in cohesion policy. Despite being one of the most evaluated EU policies, a culture of transparent, independent, and effective auditing has not emerged. The question needs to be asked why evaluations do not lead to change in outputs and the required improvements. Evidently there are (national) interests that block reforms. Yet, this does not provide a sufficient explanation as in other EU policy areas comparable difficulties existed before new structures were implemented and the issues were solved.

Competition for EU funds is increasing as new strategic priorities have emerged with enlargement on our doorstep, the war in Ukraine, and the needs to move towards sustainable growth and new energy infrastructures. To remain viable and credible, effectiveness, and legality of EU spending must be properly accounted for. Despite the many adaptations in governance, the EU added value (effectiveness) of cohesion funds (35% of the EU budget) is still hard to establish. These developments trigger further scrutiny of the effectiveness and legality of EU spending. 

Member states need to deliver reliable assurances. Independent national authorities can audit each other in teams comparable to practice in other EU policy areas. The EU Commission can use these transparent assurance reports for its annual statements. ECA produces the Annual Report on the EU’s finances to the Council and EP, and ECA writes Special Reports. In its activities it can involve national auditors to strengthen a European culture of independent auditing. For inspiration, attention should be paid to subsidiarity-based governance of monitoring and enforcement in other EU policy areas.

For the time being there seems to be little sense of urgency nor an appetite for structural reforms of cohesion funds. Few have an incentive to reform nor an appetite for strengthening independent auditing. Yet, when it comes to the assessment of national and EU added value, it is doubtful whether the current system of input and output indicators, and reports from the national authorities and from the EU Commission, offer sufficient and reliable insights.

The Author

Adriaan Schout - Clingendael Institute