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EU Auditors Get Tough On Procurement

The European Court of Auditors is taking a tough stance on public procurement, an area the group says has seen significant mishaps and shortfalls, according to reports in Supply Management released Monday (Sept. 21).

The Court has reportedly warned that failure to comply with EU public procurement rules is a “perennial and significant source of error in EU cohesion expenditure,” and has issued recommendations on how to remedy the matter.

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Reports said that among the recommendations is a plan to cease payments to EU member states if they do not fix their public procurement issues. The European Commission was also reportedly scrutinized for its role in potentially failing to ensure the enforcement of public procurement rules.

In its report, the auditors assessed more than 1,400 transactions between 2009 and 2013. That study found that about 40 percent of those deals had errors related to public procurement, reports said.

“A significant number of public procurement errors were due to unjustified direct award, misapplication of selection and award criteria and lack of equal treatment of tenderers,” the report concluded. The group also identified several causes for the errors, including the complexity of public procurement rules and a lack of infrastructure and capacity among local administrators to enforce the rules.

Officials also said that the interpretation of public procurement rules varies by jurisdiction.

Despite the significant instance of errors in public procurement, the Court of Auditors also noted that there was insufficient data to assess the issue and adequately identify reasons why mistakes were made.

This recognition also led the auditors to identify potential ways to improve the assessment of public procurement practices, including proposing the development of a database of public procurement errors and irregularities provided by member states so officials could analyze the information.

This initiative would also impose fines on member states should they fail to provide this information, reports said.

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