The European Court of Auditors: Description and Function

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  • 0:02 EU Court of Auditors
  • 0:37 History
  • 2:05 Organization
  • 4:23 Lesson Summary
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Lesson Transcript
Instructor: Christopher Sailus

Chris has an M.A. in history and taught university and high school history.

In this lesson, we explore the history and functions of the European Court of Auditors, the EU's premier independent financial watchdog organization since the 1970s.

EU Court of Auditors

No one seems to like tax day. It gets even worse for some people, when after spending hours compiling and filing their financial information with the IRS, they get a big, scary envelope telling them they're going to be audited. This annoying and potentially costly procedure is usually worse than filing the taxes in the first place!

For businesses and individuals who accept or use EU money, they not only have to worry about their nation's version of the IRS snooping through their financial history but they can also be audited by the European Court of Auditors, the EU organization which audits finances in the EU and monitors the spending of public funds.

History

The European Court of Auditors (or ECA) was set up in 1975 and began working in October 1977. It was created to fill a need: with the European Community (the forerunner to the EU) growing larger and more integrated, EC countries realized EC institutions needed to be transparent and democratic if they were to gain the support of the citizens in member states. To do this, the EC countries created the ECA and made it an audit board completely independent of other EU institutions, with a mandate to monitor EC spending of public funds. The ECA replaced a smaller audit board which had limited powers and too few staff to cope with the expanding EC budget.

In 1993, the ECA was made an official organization of the European Union as part of the Maastricht Treaty. Despite this official change, the ECA maintained its independence and viability as a financial watchdog organization. The ECA began making annual reports on EU spending in the previous year.

The ECA's power was also expanded in the 1990s, as it was granted wider power to audit EU institutions, companies, and persons, along with the ability to petition the European Court of Justice to prosecute cases of fraud. The ECA reached its current manifestation in 2003. In that year, the Treaty of Nice created a close partnership between the ECA and member states, adding an equal number of board members from each member state to direct and lead the ECA.

Organization

In order to ensure that its oversight is impartial, the ECA is completely independent of other EU institutions. There are 28 members of the ECA at any one time - one member for each EU member state. These members are appointed to six-year terms by the European Council. Once the ECA convenes, it elects one of the members to act as President of the Court. Members may serve more than one six-year term.

It would be impossible for these 28 men and women to audit all EU institutions and EU businesses on their own. Therefore, these 28 members also direct an enormous support staff of about 800 people. This staff performs most of the day-to-day auditing done by the ECA, as well as translating important ECA documents into the various languages of the ECA.

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