Each EU institution and the Member States scrutinise the EU budget. The European Court of Auditors and the European Parliament perform detailed checks at various levels. Each year, Parliament scrutinises the implementation of the budget with a view to granting discharge to the Commission, the other EU institutions and the decentralised EU agencies.

Legal basis

  • Articles 287, 317, 318, 319, 322 and 325 of the Treaty on the Functioning of the European Union (TFEU);
  • Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014 and (EU) No 283/2014 and Decision No 541/2014/EU, and repealing Regulation (EU, Euratom) No 966/2012 (see in particular Title II, Chapter 7, on the principle of sound financial management and performance, and Title XIV, on external audit and the discharge);
  • Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources, Part III;
  • Rules of Procedure of the European Parliament, Title II, Chapter 6, Rules 99, 100 and 104; Title V, Chapter 2, Rule 134; Annex V.


Ensuring the legality, accuracy and sound financial management of budget operations and financial control systems, as well as the sound financial management of the EU budget (economy, efficiency and effectiveness), and, with regard to the role of the European Court of Auditors and the European Parliament, ensuring that these objectives are achieved (performance criteria).


A. Control at national level

Initial control of revenue and expenditure is carried out to a large extent by national authorities. They have kept their powers, particularly on traditional own resources (1.4.1), an area in which they can carry out the procedures required to collect and verify the amounts concerned. Budgetary control is also exercised by combating irregularities and fraud (1.4.6). The operational expenditure of instruments falling under shared management, such as the European Regional Development Fund, the European Social Fund (which together make up the Structural Funds), as well as the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) is also scrutinised in the first instance by the Member State authorities.

B. Control at EU level

1. Internal

In each institution, control is exercised by authorising officers and accountants and then by the institution’s internal auditor.

2. External: by the European Court of Auditors (1.3.12)

External control is carried out by national audit institutions and by the European Court of Auditors (ECA), which submits detailed reports each year to the budgetary authority in accordance with Article 287 of the TFEU, i.e.:

  • The ‘statement of assurance as to the reliability of accounts and the legality and regularity of the underlying transactions’ (known as the DAS);
  • The annual report on the implementation of the general budget, including the budgets of all the institutions and satellite bodies;
  • Specific annual reports on the EU agencies and bodies;
  • Special reports on specific issues (performance and compliance audits);
  • Opinions (on new or amended laws that have a significant impact on EU financial management);
  • Reviews that cover policies and management topics, analyse areas or issues not yet audited or establish a factual basis on certain topics;
  • In a two-year pilot project, the ECA published a report on the overall performance of the EU budget for the 2019 and 2020 discharge procedures respectively.

The ECA also regularly draws up reports on borrowing and lending operations and the European Development Fund (EDF), which has been integrated into the EU budget with the 2021-2027 MFF.

3. Control at political level: by the European Parliament

Within the European Parliament, the Committee on Budgetary Control is responsible for preparing Parliament’s position and in particular for:

  • Scrutinising implementation of the EU budget and of the EDF (up to and including 2020);
  • Preparing the decisions on discharge, including the internal discharge procedure;
  • Closing, presenting and auditing the accounts and balance sheets of the EU, its institutions and any bodies financed by it;
  • Scrutinising the financial activities of the European Investment Bank (1.3.15);
  • Monitoring the cost-effectiveness of the various forms of EU funding in connection with the implementation of EU policies;
  • Appointing members of the ECA, considering its reports;
  • Looking into fraud and irregularities in connection with implementation of the EU budget, adopting measures to prevent fraud and irregularities and bring prosecutions in such cases, and protecting the EU’s financial interests in general.

The discharge procedure

Once a year, on a recommendation from the Council, Parliament grants discharge to the Commission in respect of the implementation of the budget for the year n-2, after having examined the activity reports of the Commission’s DGs, the Commission’s annual management and performance report, the evaluation report (Article 318 of the TFEU), the ECA’s annual report and the replies from the Commission and the other institutions to Parliament’s questions (Article 319 of the TFEU). The Committee on Budgetary Control prepares Parliament’s stance on the ECA’s special reports, often in the form of working papers to guide the general rapporteur on the discharge. The Commission and the other institutions are required to act on the observations made by Parliament in its discharge resolutions (Article 319(3) of the TFEU and Article 262 of the Financial Regulation). Parliament also grants discharge annually to the other institutions and to the decentralised agencies. Parliament’s discharge decision and resolution concerning the implementation of the EU general budget, Section I — European Parliament, are addressed to the President of Parliament.

As a general rule, Parliament considers the discharge reports at a part-session before 15 May (Article 260 of the Financial Regulation). Thus, other than in exceptional circumstances, the votes on granting discharge are taken at the May part-session or, in the event of a postponement, at the October part-session. If a proposal to grant discharge is not carried by a majority, or if Parliament decides to postpone its discharge decision, Parliament informs the institutions or agencies concerned of the reasons. The latter are required to act without delay to remove the obstacles to a discharge decision. The Committee on Budgetary Control then submits a fresh report, within six months, containing a fresh proposal to grant or refuse discharge.

Role of the European Parliament

A. Development of powers

From 1958 to 1970, Parliament was kept informed of decisions on discharge given by the Council to the Commission in respect of its implementation of the budget. In 1971, it secured the power to grant discharge together with the Council. Since 1 June 1977, when the Treaty of 22 July 1975 entered into force, it alone has the power to grant discharge, once the Council has given its recommendation. Through its committees responsible, Parliament also holds hearings of Commissioners-designate, and the Committee on Budgetary Control holds hearings for Members-designate of the ECA, the candidates shortlisted for the post of Director-General of OLAF and the members of the OLAF Supervisory Committee. These posts cannot be filled until the hearings have been held. It should be noted, lastly, that the Director-General of OLAF is appointed by the Commission, after consulting Parliament and the Council, and that the members of the OLAF Supervisory Committee are appointed by common accord by Parliament, the Council and the Commission.

B. Use of the discharge

Parliament may decide to postpone discharge where it is dissatisfied with particular aspects of the Commission’s management of the budget. Refusing to grant discharge can be regarded as tantamount to requiring the Commission to resign. This threat was put into effect in December 1998: following a vote in plenary to reject the discharge motion, a group of five independent experts was established, which reported on accusations of fraud, mismanagement and nepotism against the Commission. The Commissioners then resigned en bloc on 16 March 1999.

With regard to the implementation of the EU general budget by the Commission, Parliament introduced two new features during the discharge procedures for 2011 and 2012: verification of the lawfulness and regularity of expenditure, which go hand in hand with a performance evaluation (Article 318 of the TFEU); an evaluation report on the EUʼs finances based on the results achieved, and the provision stipulating that a discharge decision may be ‘counterbalancedʼ by reservations concerning particular policy areas. In the discharge procedure for 2019, for the first time in four years the ECA had to issue an adverse opinion on the legality and regularity of the expenditure underlying the accounts. However, in its first report on the overall performance of the EU budget, the ECA found that satisfactory procedures were in place. Parliament upheld the ECA’s suggestion that the Commission’s information quality should be further improved, and emphasised that result and impact indicators are better suited for performance measurement than input and output indicators.

Although the Treaty refers only to discharge for the Commission, for reasons of transparency and democratic oversight Parliament also grants separate discharge to the other institutions and bodies and to each agency or similar entity (discharge provisions for the decentralised agencies and public-private partnerships are set out in their Founding Regulations). At its April 2009 part-session, in the context of the discharge procedure for 2007, Parliament postponed the discharge to the Council of Ministers, because the latter refused to provide Parliament with relevant information. Since then, discharge to the Council has been postponed and refused. During the 2019 discharge procedure, Parliament also examined shortcomings in the European Border and Coast Guard Agency’s (Frontex) budgetary and finance management, and found the agency’s explanations insufficient. Parliament decided to postpone Frontex’s discharge from spring 2021 to 21 October 2021, when the plenary voted in favour of granting the agency discharge, but put EUR 90 million – or around 12% of the agency’s total budget – under reserve. These funds can only be released if Frontex fulfils certain conditions, namely recruiting 20 missing fundamental rights monitors and three deputy executive directors who must be sufficiently qualified to fill these positions as well as setting up a mechanism for reporting serious incidents on the EU’s external borders and a functioning fundamental rights monitoring system. During the subsequent discharge procedure (for the 2020 budget) Parliament postponed its decision on Frontex’s accounts because it felt that Frontex had not met the conditions Parliament had set in October 2021. Additionally, the agency still had to address the findings of an EU Anti-Fraud Office (OLAF) investigation into harassment, misconduct and migrant pushbacks, and to report on its progress to Parliament.

As stated above, the Commission, the other institutions and the decentralised agencies must report on the action taken on the observations made by Parliament in discharge resolutions. Member States must inform the Commission of the measures they have taken in response to Parliament’s observations, and the Commission must take them into account in its own follow-up report (Article 262 of the Financial Regulation).

C. Other instruments

Parliament’s specialised committees also help to ensure that EU funds are spent efficiently in the best interests of the EU taxpayer. The members of the Committee on Budgetary Control have, on a number of occasions, held discussions with representatives of the equivalent committees in Member State parliaments, with national audit authorities and with representatives of customs agencies. On-the-spot inquiries have also been carried out by individual members to ascertain the facts underlying particular problems.

The Treaty of Lisbon bolsters the control arrangements, focusing on the results achieved by EU programmes and requires the Commission, as part of the annual discharge procedure, to submit to Parliament and the Council, taking account of the recommendations they have made, a comprehensive evaluation report.

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


Diána Haase