40 years of auditing the European Development Fund

IMG_20180202_155851

Last week I had the opportunity to present my MA thesis at the third EUFINACCO Workshop on Financial Accountability in the European Union with a view to the forthcoming edited volume analysing Financial Accountability (Institutions, Policy and Practice) at the University of Deusto in Bilbao.

My thesis entitled “40 years of audit of the European Development Fund: The European Court of Auditors Methods and Results”, supervised by Prof. Dr. Ana Zorio Grima from the University of Valencia, provides insights into the work of the European Court of Auditors (ECA) on one of the main EU financial instruments. 2018 brings a shift in the ECA’s strategy with its activity more oriented towards performance audit. The scope of my research is to ascertain whether the ECA’s shift in focus from financial and compliance audit towards a more performance audit-oriented approach is supported by the results of the European Development Fund (EDF) audits so far.

The research aims at determining the impact of the evolution of audit methodology since 1977 to date, on the quality and usefulness of audit results. The analysis finds that the ECA’s audit of the EDF’s internal control systems contributed to the improvement of the controls through the observations and recommendations included in the reports. This improvement has been key to assuring that EDF accounts are reliable and transactions are generally legal and regular. It has allowed the Court to shift resource allocation from financial to performance audit and to focus on gaining assurance over the efficiency, effectiveness and economy of public spending (value for money).

IMG_20180131_205216

Exploring the EDF’s policy framework, the paper includes considerations on public accountability, describes the ECA’s methodology and contains an analysis of the ECA’s financial and compliance audits of the EDF over forty years (1977-2017). The findings suggest that the ECA’s introduction of audit methodology and adoption of internationally accepted audit standards has improved the impact of audit findings and recommendations, and also contributed to the overall improvement of the audit process.

The research allows us to observe that EDF control systems have gradually improved owing to the ECA’s recommendations. It identifies audit issues that could help improve the use of resources that the ECA allocates to EDF financial and compliance audit. The paper also opens up new research paths on issues related to EDF performance audit and other ECA matters.

This research was made under the umbrella of the ECA’s 2017 postgraduate research grant programme (11th Edition). The grant gave me the opportunity to visit and consult the EU Historical Archives in Florence and the ECA’s archives and library and Luxembourg as well as to exchange ideas with auditors at the ECA involved with EDF audit. At the same time, thanks to the grant I had the pleasure of meeting previous grant holders, co-convenors of EUFINACCO, Maria Luisa Sanchez Barrueco and Paul Stephenson, who invited me to join the research network.

I’d like to thank all the participants for their comments and feedback on my thesis which will certainly improve its quality and value-added for interested parties. I am very happy to join Eufinacco and participate in any future joint projects on financial accountability and EU affairs.

Andreea Hancu Budui, University of Valencia

IMG_20180131_142717

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Website Built with WordPress.com.

Up ↑

%d bloggers like this: