Auditors to keep tighter leash on EIB's spending of EU funds
The Luxembourg-based European Investment Bank (EIB) could soon come under tighter scrutiny over how it manages EU funds, after it signed an agreement to give the EU budget watchdog greater access to documents on how it uses the money.
The European Court of Auditors (ECA) – also based in the Grand Duchy - signed an agreement with the EIB and the European Commission, giving the auditors access to EIB documents, showing it how the bank spends EU money, the ECA said on Thursday.
“Given the ever-increasing role of the EIB in implementing the EU budget, the new agreement we reached is of the utmost importance”, said Mihails Kozlovs, who signed the agreement on the ECA’s behalf. “The agreement clarifies and streamlines our access to EIB documents and information so that we can properly carry out our audit mandate.”
The agreement also sets out a timeline for when the EIB needs to send the audit documents, in what format, and confidentiality rules and data protection around EIB data. However, information on the banks own funds’ activities will not be audited by the court of auditors.
The bank came into the spotlight in April last year when an internal audit report showed anti-money laundering loopholes, a Luxembourg Times investigation revealed. The report showed gaps with regards to rules to prevent money laundering and the financing of terrorism financing (AML/CFT), which were known at the bank's highest level – the finance ministers representing the very countries that put the rules in place.
The bank confirmed at the time that the audit report had identified "gaps", partly related to an "incomplete adaptation" of the bank's policies in line with the latest AML/CFT regulations.
The ECA annual report, published in October, found that the EU needs to sharpen its efforts to prevent continued spending mistakes and fraud. The report identified problems in spending on programmes from farm and fishing subsidies to scientific research, representing almost 3% of all transactions tracked last year, though these were not necessarily fraudulent.