Auditing Cohesion Funds: Why is the Error Rate so High, and what does this Mean for the Legitimacy of Multi-level Governance?

This paper examines the high rate of error in cohesion policy. It looks historically and the evolution of the European Court of Auditors’ own audits of cohesion policy (formerly regional policy) since the beginning of the Structural Funds in 1975 and the introduction of the Cohesion Fund in 1992. Over time it traces the evolution of the error rate, looking close up at incidences of irregular spending and fraud. Acknowledging that shared management implies that implementation is largely in the hands of the member states, the paper questions what this means for the legitimacy of multi-level governance. The paper analyses the annual reports (financial and compliance audit) and special reports (performance audit) of the Court to question what steps might be taken in both Commission/member state programming and national/regional/local public administrations to help reduce the error rate, and in turn, improve financial accountability and policy performance in the EU.