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Accountability and Public Policy Audit in the European Union

Final Report Summary - APPLAUD (Accountability and Public Policy Audit in the European Union)

• Summary description of the project objectives

The project’s first objective was to study the origins of financial accountability of the EU budget in the context of the Audit Board (1959-1977). I wanted to: a) ascertain who came together, when and how; b) examine how the notion of accountability emerged and its influence on the early audit of institutional and policy expenditure c) trace how institutional values such as collegiality, independence and professionalism developed; d) understand how internal structures were created and tasks allocated; e) identify the beginnings of inter-institutional conflict and distrust; f) understand the events and process that led to the establishment of the European Court of Auditors.

The project’s second objective was to study the further institutionalisation of the audit function in the context of the European Court of Auditors (1977-2013), its mechanisms, structure and processes. I wanted to: a) explore the process of transition from one institution to another; b) identify the institutional politics shaping and/or constraining the work of the Court of Auditors, including relations with national audit bodies and other EU institutions; c) examine the internal restructuring of the Court’s activities and the link with identities; d) continue to trace the evolution of values and norms inside the Court and their link to both audit practice and notions of accountability; e) explore the recent process of internal reform and pressures for further Treaty change.

• Description of the work performed since the beginning of the project

To meet the first objective, I looked into the Court’s and EU’s historical archives. Documents analysed included minutes of the Board’s meetings, annual reports of the Court’s predecessor (the Audit Board), annual reports on the EU budget, and internal working documents. To meet the second objective, I conducted elite interviews with officials, including Court Members, auditors and administrative staff. I spent the two years working as part of a team of researchers at the Centre d’Etudes Européennes of Science Po. Prof. Renaud Dehousse and the Centre’s staff were extremely cooperative and supportive. I attended many research seminars and engaged with the cohort of PhD students. The first year was spent largely based at Sciences Po gathering documents from various institutions and archives, while the second half of the second year (period 4) was spent conducting interviews at the European Court of Auditors in Luxembourg. I now have a collection of 20 files of primary documents and have conducted 57 semi-structured interviews (over 100 hours) with all types/levels of staff of the European Court of Auditors (yet to be interpreted). Considerable data from the interviews will be analysed in future research articles. My diary for the entire period of the project can be read here: https://paulstephensonacademic.wordpress.com/diary/

• Main results

a) Presentation of research at 10 workshops/conferences (Netherlands, UK, Ireland, Poland, France, Canada, Spain) including audiences at the European Political Research Consortium (ECPR), Council of European Studies (CES) and University Association for Contemporary European Studies (UACES).

b) 4 research articles in international peer-reviewed articles (two published; one accepted for publication, one pending second peer review), two of which in high-ranking journals in field of law and public administration. The JEPP article puts forward a new framework for analyzing early institutional processes for researchers using archives.
• European Journal of Risk Regulation (# 3 in European Law (Washington & Lee School of Law Journal Ranking; # 5 in Administrative Law (Washington & Lee School of Law Journal Ranking)
• Journal of European Public Policy (impact factor 1.21; five year impact 1.91)

c) 6 lectures/tutorials on financial accountability, audit and evaluation in the EU given to four groups of master students of European Public policy and administration.

d) Creation of research network EUFINACCO (Financial Accountability in the European Union) which has in 12 months attracted 20 members from 9 EU member states (UK, NL, DE, PORT, HU, LUX, POL, IRL, ES) and 2 non-EU member states (US, Lebanon). Scholars are working on a broad range of topics related to financial accountability, in addition to audit: corruption, absorption, new tools of economic governance, public prosecution, ethics, committee scrutiny, policy analysis. See https://eufinacco.wordpress.com/

e) Network subsequently awarded status of Collaborative Research Network (CRN) by UACES and a small grant of 5,000 euro to organise workshops in period Spring 2015-Spring 2018. See http://www.uaces.org/networks/2015a.php

f) Close contacts and trust established between the researcher and officials in the European Court of Auditors and European Parliament Research Service, as well as with researchers in Bilbao and Berlin (two other network coordinators). Established reputation among academic community as expert on the European Court of Auditors.

• Main conclusions

A general conclusion is that audit practice in the EU has resulted from an amalgam of national approaches to audit, each distinct in terms of the culture, philosophy and disciplinary approach to external financial control. This process of institutionalizing audit and financial control in the multi-level EU is very much a work in progress, despite sixty years of audit governance.

The Court of Auditors has only in the last decade begun to assert itself externally, with a greater focus on promoting its outputs and findings to other institutional stakeholders. For almost 40 years it has reported to a single parliamentary committee in the European Parliament (Budgetary Control) but is now seeking to establish direct relations with sectoral committees in order to maximise the impact of its work, which should help improve financial accountability.

Recent years have seen transformations in the architecture of accountability with the creation of the Anti-Fraud Office, and with current talk of the creation of a European Public Prosecutor. There is a tension between the growing institutional complexity of actors and the increasing risk and complexity of new policy areas, and thus the degree to which they can practically be audited.

The Court of Auditors itself is undergoing internal reforms to enable it to be faster, more flexible and timely in the publication of its audit findings. It is also taking on higher risk topics. The emergence of new tools of financial and economic governance (Juncker Plan, increased role of the European Investment Bank, etc.) raises serious questions regarding financial accountability, since the Court only has a mandate to audit the EU budget. There is great uncertainty as to the future role and mandate of the EU’s external auditor, and the implications for the European taxpayer.

• Potential impacts

Individual research will impact future academic research on the most desirable accountability mechanisms in the EU, and feed into the debate on reforming the European Court of Auditors (ECA). Research output is communicated directly to practitioners in the European Parliament and Court of Auditors. It will be used in the classroom to engage future researchers and encourage them to dig deeper into issues related to budgetary politics in the EU. It is hoped that the newly established network will grow and in time become a portal/repository for teaching material related to the EU budget and accountability issues, as well as an observatory that houses and discusses the most recent research in the field. As the international research network is consolidated in the period 2015-2018, with further academic deliverables, we will consider applying for a large grant within Horizon2020 or other funding streams.

• Relevant links

Researcher website: https://paulstephensonacademic.wordpress.com/
Diary of Marie Curie project: https://paulstephensonacademic.wordpress.com/diary/
New research network website: https://eufinacco.wordpress.com/about-us/
Researcher twitter: @PaulJStephenson – Research network twitter: @eufinacco
Researcher contact details: Department of Political Science, Faculty of Arts and Social Sciences, Maastricht University, Grote Gracht 90-92, PO Box 616, 6200 MD Maastricht, The Netherlands
Researcher email: p.stephenson@maastrichtuniversity.nl