Internal audit
The Commission Internal Audit Service (IAS) is part of the internal audit system for the European Commission and EU agencies. Its primary objective is to provide the European Commission and EU agencies with independent and objective assurance as to the effectiveness and efficiency of the risk management, control and governance processes. The Internal Audit Service also provides consulting services designed to add value and improve the operations of the European Commission and the agencies.
External audit
The European Court of Auditors is the EU's external auditor. It audits each year the reliability of the EU accounts, and the legality and regularity of the transactions underlying the accounts, for both revenue and expenditure. Based on the findings from this audit, it issues a reasoned opinion (clean, qualified or adverse), known as the statement of assurance. The European Court of Auditors also audits the performance of EU spending. The results of this audit work, including the statement of assurance, are published in the European Court of Auditors' annual report.
The audit on the reliability of the EU’s accounts and on the legality and regularity of the underlying transactions involves testing a random sample of transactions. This allows the European Court of Auditors to estimate an overall level of error for EU spending as a whole as well as for some specific policy areas.
Errors do not mean fraud or lost funds. When errors are detected, the money must be recovered or the amounts corrected (e.g. redirected to another project).
For the first time in 2020 (for the audit of financial year 2019), and on a pilot basis, the European Court of Auditors split its annual report on the implementation of the EU budget into two parts, published separately. The first part continues to deal with the EU accounts and the legality and regularity of revenue and expenditure, including the annual statement of assurance. The second part, also known as the annual report on the performance of the EU budget, covers the performance of spending programmes, as well as the follow-up of recommendations made in previous years' special reports.
In addition to the annual report, the European Court of Auditors also publishes special reports, where the auditors tend to focus on the performance of policies. In this context, auditors aim to answer questions such as "do the EU funds provide value for money or have spending or policy objectives been met?"
The European Court of Auditors may also provide opinions on legislative proposals or publish other descriptive or analytical documents such as reviews or background papers, which however do not stem from audit activities.
The European Court of Auditors' publications are available on the Audit reports, reviews and opinions page.
The European Court of Auditors not only audits transactions undertaken by the European Commission, but all transactions linked to the EU budget. Thus, it also performs audits on other EU institutions and bodies, as well as in the Member States.
In this context, the European Commission, the European Court of Auditors and the European Investment Bank (EIB) have signed a Tripartite Agreement in November 2021. This agreement governs the access of the European Court of Auditors to documents and information held by the EIB in order to carry out its audits of operations funded or guaranteed by the EU budget and managed by the EIB. The agreement replaces the one from 26 September 2016.