Fact Sheets on the European Union
European Parliament
Please fill this field

Budgetary control

This fact sheet explains what budgetary control is and why it matters in the EU. It introduces the legal framework that governs EU budgetary control and outlines how budgetary control is exercised at national, EU institutional and political levels. It explains the discharge procedure and the role of the European Parliament and presents recent examples of budgetary scrutiny and ongoing challenges.

Legal basis

Budgetary control is based on several legal documents.

  • Treaty on the Functioning of the European Union (TFEU): Articles 287, 317–319, 322 and 325 define the legal basis for the EU’s budget implementation, auditing and protection against fraud.
  • Regulation (EU, Euratom) 2024/2509, known as the Financial Regulation, sets out detailed rules for establishing, implementing and auditing the EU budget, ensuring sound financial management and transparency.
  • The Interinstitutional Agreement on budgetary discipline, cooperation and sound financial management improves cooperation between EU institutions and reinforces fiscal discipline throughout the budgetary process.
  • The Rules of Procedure of the European Parliament, especially Rules 101–102, 106, 139, and Annex V, outline its internal processes for budgetary scrutiny, discharge procedures and oversight of financial matters.

Objectives

The aim of budgetary control is to ensure that all EU spending is:

  • legal,
  • correct,
  • properly recorded,
  • managed efficiently, effectively and economically.

What is budgetary control?

Budgetary control in the European Union ensures that money from the EU budget is raised and spent legally, efficiently and effectively.

The first checks often happen at the national level, where the Member States monitor how funds are raised and spent. At EU level, each institution checks its own spending internally, while the European Court of Auditors (ECA) does an independent, external check. The ECA reviews whether the EU’s spending is legal and if it meets its goals, then reports its findings each year. The European Parliament then assesses whether the budget has been implemented correctly and in line with the rules.

These checks can also help prevent fraud and make sure that EU funding delivers real benefits for citizens.

How does budgetary control work?

A. Control at national level

National authorities in the Member States carry out the first checks on how funds are raised and spent, to a large extent. As a result, they are responsible for some aspects of budgetary control, especially for traditional own resources such as customs duties, which they raise and check on behalf of the EU. They also take the lead in detecting and addressing fraud and other irregularities involving the EU budget.

Member States also carry out the first audit on spending under shared management – funds where the European Commission delegates budget implementation tasks to national authorities in the Member States. These include funds such as the European Regional Development Fund and the European Social Fund (together known as the Structural Funds), as well as the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development.

B. Control at EU level

At EU level, there are three types of control: internal control, external control and control at the political level, or political oversight.

1. Internal control

Each EU institution monitors its own budget. Authorising officers, accountants and internal auditors perform checks to make sure that funds are handled correctly and in line with the rules.

2. External control

The ECA, supported by national audit institutions, audits the EU’s accounts and spending and submits detailed reports each year to the European Parliament and the Council of the EU (together making up the EU’s budgetary authority), in accordance with Article 287 TFEU. The ECA’s work comprises:

  • a statement of assurance on the reliability of the accounts and the legality and regularity of the underlying transactions (known as the DAS);
  • a report on the implementation of the general budget, including the budgets of all the institutions and the specialised bodies;
  • specific reports on the EU agencies and bodies;
  • special reports on performance and compliance;
  • reviews on policy areas or emerging issues.

Until 2021, the ECA also published an annual report on the overall performance of the budget. It also reports on borrowing and lending activities and on the European Development Fund, which is now integrated into the EU’s long-term spending plan, the multiannual financial framework.

3. Political oversight

The European Parliament checks how the budget has been implemented, particularly through its Committee on Budgetary Control, which:

  • reviews the implementation of the EU budget and the European Development Fund, guided by the ECA’s annual report and other products;
  • prepares discharge decisions;
  • closes, presents and audits the accounts and balance sheets of the EU, its institutions and any bodies financed by it;
  • examines the financial activities of the European Investment Bank;
  • assesses whether EU funding has been cost-effective in implementing policy;
  • adopts measures to prevent fraud and financial irregularities and to prosecute offenders; follows up on cases of fraud and irregularities;
  • interacts with the ECA, the European Anti-Fraud Office and the European Public Prosecutor;
  • is involved in approving appointments to the ECA and the European Anti-Fraud Office.

The discharge procedure

The TFEU refers only to discharge for the European Commission. However, the European Parliament also grants separate discharge to the other institutions, bodies and agencies.

The European Parliament’s Committee on Budgetary Control reviews the implementation of the budget from two years earlier (year n-2). It examines:

  • annual activity reports from the Directorates-General of the European Commission and from the other EU institutions, agencies and bodies;
  • the European Commission’s annual management and performance report;
  • an evaluation report focused on the outcomes of EU programmes, in accordance with Article 318 TFEU;
  • the ECA annual report;
  • responses from the institutions to the European Parliament’s questions, in accordance with Article 319 TFEU.

This parliamentary scrutiny ensures legality, regulatory compliance and sound financial management. On this basis, the Committee on Budgetary Control prepares its recommendation to grant or refuse discharge. The European Parliament then votes on the discharge decision, in the form of a resolution that includes observations and recommendations on the implementation of the budget.

If it is satisfied, the Committee on Budgetary Control proposes to grant discharge, in accordance with Article 266 of the Financial Regulation. Discharge is then granted, usually by mid-May, if a majority of the Members of the European Parliament votes in favour of the proposal. The European Parliament can also postpone its discharge decision to October if it is not satisfied with aspects of the management of the budget.

If discharge is refused or postponed, the European Parliament informs the institutions, bodies or agencies concerned of the reasons. They must then promptly address the obstacles to discharge (as required by Article 319(3) TFEU and Article 268 of the Financial Regulation). For discharge for the European Commission, Member States must inform the European Commission of the measures they have taken in response to the European Parliament’s observations, and the European Commission must take those measures into account in its own follow-up report.

Once the obstacles to discharge have been removed, the Committee on Budgetary Control issues a new report and a proposal, within six months, to grant or refuse discharge.

A refusal to grant discharge can send a strong message. In 1998, the European Parliament voted to refuse discharge, and a group of independent experts was set up and reported on accusations of fraud, mismanagement and nepotism in the European Commission. The expert group’s findings led to the resignation of the entire European Commission in 1999.

The European Parliament has refused to grant discharge to the Secretary-General of the Council of the EU since 2009, owing to the Council’s lack of cooperation in the discharge procedure.

Role of the European Parliament

A. Development of powers

The European Parliament’s powers in budgetary control have grown over the decades.

  • From 1958 to 1970, the European Parliament was only informed of the discharge decisions taken by the Council of the EU.
  • In 1971, it gained equal discharge power with the Council.
  • Since 1977, it alone grants discharge following the recommendation of the Council.
  • It also holds hearings for Commissioners-designate, and its Committee on Budgetary Control holds hearings for members-designate of the ECA and candidates for Director-General and the Supervisory Committee of the European Anti-Fraud Office. These posts cannot be filled until the hearings have taken place.

B. Recent discharge procedures

1. Frontex (European Border and Coast Guard Agency)

In 2021, the European Parliament postponed the discharge of Frontex’s budget owing to shortcomings in budgetary and financial management. It approved discharge later that year but withheld EUR 90 million until specific conditions were met. In 2022, it again postponed the discharge decision, citing unresolved concerns, including the negative findings of an investigation by the European Anti-Fraud Office on harassment, misconduct and migrant pushbacks. Discharge was granted for 2022 once improvements had been confirmed.

2. Other areas of focus

Recent discharge procedures have highlighted concerns over:

  • the control requirements of the Recovery and Resilience Facility (COVID-19 recovery funds) and the need to balance strong oversight with simplified procedures, especially for small and medium-sized businesses;
  • high error rates for spending programmes (especially programmes for strengthening the economic and social cohesion of the EU);
  • public procurement and transparency, including the need for information on final beneficiaries of funds, and access for non-governmental organisations to EU funding;
  • ethics and integrity in relation to the European Parliament’s own budget;

As a result of a European Anti-Fraud Office investigation, discharge to the EU Agency for Asylum (EUAA) was postponed in April 2025. Although some concerns remain, the European Parliament granted discharge to the EUAA in October 2025, after the EUAA had made some changes (for example, ending the practice of appointing interim managers, and changing staff evaluation procedures). However, future discharge decisions can be made conditional on the EUAA completing further reforms.

C. Ongoing oversight and cooperation

Institutions, bodies and agencies must follow up on the observations and recommendations that the European Parliament makes in its discharge resolutions.

The European Parliament’s specialist committees work to ensure that EU funds are spent efficiently, in the best interests of EU taxpayers.

Dialogue takes place between the European Parliament’s Committee on Budgetary Control and its counterpart in national parliaments, as well as national audit offices and customs agencies.

For more information on this topic, please see the website of the Committee on Budgetary Control.

 

Diána Haase