NKU Head Andrassy Presents Report on Efficiency in Spending EU Funds

Bratislava, 8 June (TASR) - Twenty years of membership of the European Union (EU) has brought Slovakia funds worth €25.6 billion, thus contributing to its economic growth, regional convergence and macroeconomic stability, but the efficiency of these investments has been undermined by bureaucracy, weak oversight, insufficient coordination and a low rate of fraud prevention, according to a Supreme Audit Office (NKU) report mapping out the absorption of EU funds between 2004 and 2025, which was presented by NKU head Lubomir Andrassy on Monday. According to Andrassy, Slovakia would deserve a "C grade" for its level of efficiency in drawing EU funds. "The experience of 20 years of [EU] membership confirms that the volume of allocated funds alone isn't a guarantee of success, as the key role is played by the quality of institutions, the strategic focus of investments and the stability of the regulatory environment," states the NKU report. Andrassy stressed that achieving 100-percent absorption isn't the most important objective. "Spending the money simply because it's in the budget is the worst possible approach," he said, noting that an inefficient use of funds has often been caused by time pressure and the set conditions. "The highest absorption rates combined with the greatest amount of waste rate occur where the beneficiary's co-financing requirement is zero or only 10 percent," he noted. According to the NKU, the main goal of reducing regional disparities has been met only partially, as the stimulating effect of EU funds on public investment and economic growth was gradually replaced by a trend via which EU funds crowded out domestic funding and public investments. EU funds (excluding defence spending) gradually accounted for more than half of public investments, reaching as much as 80 percent in 2015. Audits have also revealed a recurring pattern of problems, such as poor project preparation, inconsistencies in methodology, administrative errors, low-quality expert evaluations, a lack of time, public procurement failures, high staff turnover, non-existent measurable indicators, and uneven absorption. Head of the European Commission (EC) Representation in Slovakia Peter Stano said that NKU's findings are in line with what the EC has been telling its Slovak partners. "The EC's evaluations are basically the same year after year, both in terms of successful EU funds absorption and in identifying systemic shortcomings that need to be addressed," said Stano, recommending a change in the current approach so that Slovakia could succeed and fully tap the potential of generous contributions from other countries' tax-payers. The upcoming budget will most likely be the last one with Slovakia as a net beneficiary. In addition to learning from past mistakes, it's important to decentralise the management of EU funds, while transparency is also crucial, said Andrassy, highlighting the Agricultural Payment Agency as a negative example. jrg/df