Report: EU auditors find errors in direct farm payments

The European Court of Auditors (ECA) has published its annual report for 2022, where it undertook an audit of EU budget spending and payments to member states.

A close look was taken at many aspects of the EU budget in 2022, which totalled €196 billion including direct payments to farmers.

Tony Murphy, president of ECA said: “Based on our representative sample of 760 transactions, we saw an increase in the overall level of irregularities, rising to 4.2% in 2022 from 3% in 2021 (2.7% in 2020).

“Given the widespread occurrence of the errors identified, we have maintained an adverse opinion for the fourth consecutive year.”

The audit also revealed that Ireland’s spending of €1.579 billion of Common Agricultural Policy (CAP) funds, which contained four transactions audited by the auditors, revealed a total of three errors.

Direct payments

In the 88 direct payment transactions tested, auditors found six minor quantifiable errors, which resulted from farmers overstating the eligible area of ​​agricultural land.

The ECA also found one major quantifiable error, where the declared agricultural activity had not taken place.

Area highlighted in blue that did not contain lemon trees. Source: ECA

A farmer in Italy received direct aid for maintaining a permanent crop, lemon trees, but aerial photos did not show lines of trees like those on adjacent agricultural parcels.

A visit from the auditors confirmed that the declared area did not have any lemon trees on it and had not been maintained in an agricultural state for several years.

The national authorities did not identify this error.

Audit on natural resource spending

A total of €58.1 billion was allocated by the EU for natural resources in the 2022 budget.

This spending area covers the CAP, the common fisheries policy, and part of EU spending on the environment and climate action.

Agriculture and rural development account for 97% of EU spending on ‘natural resources and environment’ and are implemented through CAP.

A breakdown of the €58.3 billion EU budget spending by fund. Source: ECA

A total of 218 transactions were examined by the auditors, of which there were 46 (21%) errors.

Of the 218 transactions examined, 46 (21%) contained errors, which the auditors determined that the level of error in the funding for natural resources was at 2.2%.

The auditors noted that the number of small over-declarations of area, for both direct payments and rural development measures, increased from four errors in 2021 to 16 errors in 2022.

The main source of the estimated level of error was the provision of inaccurate information on areas or animals.

The member state authorities and the commission had applied corrective measures that reduced the estimated level of error for natural resource spending by 0.9%.

Estimated level of error. Source: ECA

In 19 cases of quantifiable errors, the member state authorities and the commission
had sufficient information to prevent, or to detect and correct, the error before accepting the

The ECA report stated: “Had the member state authorities and the commission made proper use of all the information at their disposal, the estimated level of error for this chapter would have been 1.3% points lower.”

Errors in EU payments

The audit analyzed 56 EU rural development payments based on areas or animal numbers declared by farmers, including payments for meeting specific agri-environment climate commitments, compensation payments for organic farming, and payments to farmers in areas with natural constraints.

15 of these payments contained errors, nine of which were related to over-declaration of eligible areas.

52 rural development payments to investment projects, such as investments in physical
assets, farm and business development, and risk management were found to have eight errors, resulting from beneficiaries having declared expenditure or activities that did not meet the eligibility conditions.

Of the 14 market measure transactions tested, two cases were found in which paying agencies had reimbursed ineligible costs.

There were two errors found out of the eight transactions in maritime, fisheries, the environment and climate action areas.

There were also errors found in funding for investment projects, including the provision of start-up aid for young farmers to a beneficiary in France, who had been the head of an agricultural holding for over 10 years.

The ECA audit on spending on climate action examined whether the commission
had reported relevant and reliable climate spending information for 2014-2020.

The audit found that the commission had overestimated such spending by at least €72 billion,
mostly due to overestimation of the contribution of agricultural funding, but also of
infrastructure and cohesion funding.


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