For the 16th year in a row, the European Court of Auditors failed to give the European Commission a clean bill of health for its expenditure. It challenged the EU to get a grip on its spending after finding “material errors” in last year’s €100 billion budget.

The way Malta manages some of the funds it gets from the EU also came under attack for not being “effective and up to standard”.

The latest scrutiny by the EU auditors focused on the payments made to Maltese farmers under the Common Agricultural Policy regime. The ECA expressed serious concern that the agency making payments to farmers in Malta at times did not meet its strict standards of accountability. It mentioned in particular instances of “insufficient audit trails, miscalculations of aid eligible to farmers and payments made before anomalies were resolved”. It also claims there were cases where “penalties were applied incorrectly”.

This is the second time this year this country has been singled out for breaching EU standards in the funds management process. In June, the European Commission suspended the payment of student funds. There could be a partial lifting of this suspension any day now.

It is of little consolation that Malta is not the only member state abusing EU funds system because other Mediterranean countries like Cyprus and Greece have had their paying agencies also classified as “not effective”.

So why does Malta need to clean up this process with urgency?

The simple answer is that if EU governments and regulating bodies like the ECA were to tolerate shoddy management of taxpayers’ funds, this would amount to encouraging “moral hazard” that could undermine the credibility of the EU. At a time when millions of European families are being subjected to painful belt-tightening measures, it is morally and politically unacceptable to mismanage the EU funds built through their hard work and intended to promote growth in different sectors of the European economy and to ensure fairness in our society.

It will be a mistake to consider criticism about the way EU funds are managed as coming only from Eurosceptics that are, undoubtedly, gaining political strength in EU countries.

Open Europe, for instance, is a pro-EU think tank with bases in London and Brussels. It promotes good governance practices in the EU and highlights where weaknesses exist and how they can be overcome. Stephen Booth, an Open Europe analyst, expressed the concern of many who read the latest ECA judgement on the EU’s expenditure in 2009 when he said: “This is a hugely embarrassing annual tradition and it remains absolutely unacceptable.”

It may be time to overhaul the agencies that administer EU funds in Malta. This could include a review of the process through which payments are made to the intended beneficiaries. The process must also be subjected to regular local external audits by non-government auditors to pre-empt any criticism by EU institutions like the ECA. This can only be achieved if the agencies are manned by professionals who are not only academically qualified but have impeccable records of independence of thought in their professional behaviour.

The risk of getting used to criticism about the way this country manages EU funds is a realistic one. It would indeed be worrying if a government should fail to be moved by comments it is ineffective in managing taxpayers’ money.