EU auditors lambast Malta agriculture paying agency

An inspection by the European Court of Auditors last year found the paying agency which dishes out millions of euros in aid to farmers was not up to standard and was classified as “not effective”.

The ECA highlighted serious concerns with the standards of the agency after finding examples of insufficient audit trails, miscalculations of aid eligible to farmers and payments made before anomalies were solved. The audit team also found there were some penalties applied incorrectly.

The information was revealed in a report on how the EU and its member states spent the €120 billion budget allocated for 2009.

In one particular case involving Malta, the ECA pointed out that an incorrect calculation led to an overpayment of 69 per cent. When the EU Executive was questioned, the Commission admitted the problems, adding in this case the overpayment “affects a total of 519 farmers or an area of 203 hectares”.

The news comes after the European Commission suspended student funds in June following a fiasco at EUPA, the Malta agency responsible for handling EU money intended for education.

Malta’s agency responsible for agricultural funds was not the only one in the EU found to be ineffective.

Eight spot checks last year, led the ECA to also classify as “not effective” the agencies of Cyprus and Greece. Latvia’s agency was the only one totally cleared by the ECA and those of Italy, Spain, Lithuania and Slovakia were classified as “partially effective”.

In general, the ECA report found a raft of spending errors in the majority of member states and, in particular, in the agriculture sector.

ECA president Victor Manuel de Silva Caldeira said only two of seven policy areas were found to have kept within official spending rules. Accounting and control systems were found to be only “partially effective” in preventing and detecting overstated and ineligible costs.

Although the ECA said the 2009 EU’s accounts were “free from material misstatements”, it found payments underlying the accounts in agriculture, cohesion, research, external aid and education to be “materially affected by error”. These five policy areas comprise 92 per cent of all EU expenditure. A “material breach” occurs in cases where the total value of breach is greater than two per cent of expenditure.

The report highlighted one case in which municipal land in an unnamed member state, widely held to be Bulgaria, was artificially declared to be eligible for EU agricultural payments. Payment of some €30,000 was “not justified” because the state company in question carried out no agricultural activity.