Changes from report parliamentary committee draft to plenary report

Added55. Underlines the importance of preventive and precautionary measures in combating VAT fraud; encourages the exploration of innovative approaches, such as risk-based sampling and statistical extrapolation of control results to wider transaction populations, in full respect of legal safeguards and proportionality;

Added56. Welcomes the proposals for new own resources presented by the Commission, including as part of the package of proposals for the next MFF, which should at the very least be able to cover the expenses related to the interest and repayment of loans under the RRF in order to ensure that such expenses do not limit Union funds available for regular Union spending programmes; recognises, that other revenue sources might also be considered should the existing proposals not materialise without compromising fiscal responsibility; considers that the revenue potential of a digital service tax and a financial transaction tax should be explored as possible solutions;

Recommendations:

Change 44

Changed47.57. Calls on the CommissionCommission, in particularparticular, to:

Change 45

Changed(i) intensifytake itsthe actionsnecessary steps to ensuresupport the fastesttimely possibleand effective implementation of the customs reform,reform , including the establishment and initial operation of the EU Customs Authority and the development, implementation, and maintenance of the EU Customs Data Hub;

(ii) intensify cooperation on customs with other countries outside the Union in order to facilitate trade and increase the fight against cross-border tax and customs fraud;

Change 46

Changed(iii) addressintensify efforts to improve the collection of the Union’s existing revenue sources, including those from e-commerce by addressing the remaining weaknesses identified by the Court especially those which concern long-outstanding issues concerning VAT reservations and open points concerning traditional own resources (TOR);

(iv) continue work towards the introduction of additional new own resources;

Change 47

Added(v) continue to address the major custom gap challenges that the rapid growth of e-commerce poses to customs authorities; provide adequate human, technical and financial resources;

Single market, Innovation and Digital

58. Notes that the budget for the programmes under MFF heading 1 ‘Single Market, Innovation and Digital’ was EUR 25,9 billion (13,5 % of the Union budget) distributed as follows: EUR 14,9 billion (57,6 %) for Research, EUR 4,1 billion (15,9 %) for Transport, Energy and Digital, EUR 3,1 billion (11,9 %) for the InvestEU Programme, EUR 2,3 billion (8,8 %) for Space, and EUR 1,5 billion (5,8 %) for other areas;

Change 48

Changed49.59. Notes that the Court has examined 127 transactions covering the full range of spending under this MFF heading; notes with concern that 32 (25 %) of the 127 transactions that the Court examined contained errors; regrets that, based on the 28 quantifiable errors the Court found, and additional errors detected in MFF heading 1 transactions implemented by EUUnion agencies, joint undertakings and the European Institute of Innovation and Technology, the Court estimates that the level of error in spending on ‘Single Market, Innovation and Digital’ in 2024 was material at 3,2 %; further notes that the Commission estimates the risk at payment as 1,6 % for this heading, which is in the lower half of the range of the Court’s estimate;

60. Notes the categorisation of errors by the Court, with ineligible direct personnel costs accounting for 76 % of errors, ineligible other direct costs (VAT, travel, equipment) accounting for 18 %, ineligible subcontracting accounting for 4 % and ineligible indirect costs for 2 %;

Change 49

Changed51.61. Notes with concern the Court’s observation that research and innovationcontinues expenditureto isbe mosta affectedhigh-risk byspending error,area, particularly in the area of personnel costs; notes that the Court found quantifiable errors relating to 26 of the 99 research and innovation transactions it sampled; recognises that the way funds are disbursed has an impact on the risk of error and the complex rules associated with reimbursement-based funding generally used in the area of research; underlines, in this regard, the need to simplify rules governing Union research and innovation programmes with a view to reducing the risk of errors while facilitating access of beneficiaries, notably SMEs, to Union funding;

Change 50

Added62. Observes that the Court has also identified several issues in Connecting Europe Facility (CEF) projects, including the reporting of indirect costs, discrepancies between declared and actual payments and non-compliant procurement procedures, and calls for strict compliance with cost eligibility rules and sound financial management by all partners; furthermore, emphasises the need to take these issues into account in the context of the upcoming CEF Regulation (2028–2034), in order to improve transparency in the implementation of CEF projects and to reinforce their EU added value;

63. Welcomes that for its 2024 Annual Report, the Court also assessed the performance information on MFF heading 1 which was presented in the programme performance statements of the 2023 annual management and performance report prepared by the Commission; appreciates the Court’s overall conclusion that the design of performance indicators improved compared to the 2014-2020 programming period, including the balance of different types of indicators (input, output, result and impact) in the case of Horizon Europe, the EU Space Programme, and InvestEU; notes with concern that the 2021-2027 Connecting Europe Facility (CEF) legislation does not include result or impact indicators;

Change 51

Changed53.64. Is concerned that the Court detectedidentified gaps in the traceability of reported results, particularly for Horizon 2020; considersunderlines itthe essentialimportance toof verifyverifying and ensureensuring the traceability and reliability of data used to establish performance indicators; notes with concern that, owing to the introduction and increasing use of simplified cost options and deliveryfinancing models based on financing not linked to costs, weaknesses in the traceability and reliability of performance data canmust adverselybe affectaddressed to protect the Union financial interests;

Change 52

Changed54.65. Notes with concern the Court’s finding that the Commission could not provide project-level information for InvestEU, as it is implemented through indirect management, complemented by monitoring visits; regrets the Commission’s reply that InvestEU implementing partners are neither required by the guarantee agreements nor by the InvestEU Regulation to report key performance indicators (KPIs) at project level; considers that project-level data should be the basis for enhanced performance reporting for financial instruments implemented under indirect management, such as InvestEU; stresses that the European Investment Bank (EIB), as the main implementing partner of InvestEU, must be held to the highest standards of transparency and accountability;

66. Is concerned that the Court found that, in general, progress in achieving targets for KPIs was lower than assessed by the Commission; notes that MFF 2021-2027 programmes are mostly on track to achieve targets, while 2014-2020 programmes had only partially met their objectives; notes with concern the Court’s conclusion that less than half of the performance indicators of Horizon 2020 and of CEF 2014-2020 show that results have been achieved or are on track; notes that for InvestEU, 50 % of the indicators presented in the programme performance statements did not have a target; acknowledges the Commission’s reply that, owing to the market- and demand-driven nature of financial instruments such as InvestEU, the performance of such programmes depends on their take-up by the market, which limits the Commission’s ability to establish predefined milestones and targets;

Change 53

Changed56.67. Recalls the importance of Union research and innovation (R&I) funding programmes for the scientific, societal, economic and technological development of the Union, adequately addressing emerging priorities and challenges, reducing inequalities, achieving the green and digital transitions and decreasing the Union’s energy dependency on Russia; underlines that in order to enhance the Union’s competitivenesscompetitiveness, technological leadership and strategic autonomy and to close the innovation gap,gap with global competitors, increased funding for R&I is needed,needed and a stronger and more targeted investment effort in research and innovation, combined with reduced administrative burden for applicants and better mobilisation of private capital, is essential, also with a view to addressing the Draghi report’s pertinent recommendations; recalls that the Draghi report underlines that excellence in research and innovation is fundamental to the Union’s competitiveness and that within the Union research and innovation system, including the Horizon Europe programme, there should be one selection criterion, namely, excellence; reiterates, in this regard, its position that funding for research and innovation should continue to be determined by the principle of excellence and should remain merit-based;

Change 54

Changed57.68. Notes that the ex-post evaluation of Horizon 2020 estimated that for each euro of costs linked to the programme, five euros worth of benefits would be generated for society by 2040; deeply regrets that 74 % of proposals assessed as high quality by independent experts could not be funded due to budget constraints; notes that an additional EUR 159 billion would have been needed to fund all high-quality proposals; stresses the importance of ensuring sufficient funding for Union R&I to boost the Union’s sustainable prosperity and competitiveness; highlights the importance of making full use of the Seal of Excellence and other complementary Union and national funding instruments, including those under cohesion policy, to support high-quality but unfunded research and innovation projects and to strengthen regional innovation ecosystems across the Union;

Change 55

Changed58.69. Underlines the importance of simplifying the rules and procedures governing Union R&I funding to facilitate beneficiaries’ access to funding and programme implementation; stresses that simplification measures should be designed in a way to benefit applicants and beneficiaries, including first-time applicants, SMEs and universities, while promoting smaller and more flexible consortia, modular project structures and staged participation in order to facilitate broader participation and effective inclusion across the Union; is worriedconcerned by the Court’s finding that despite the simplifications introduced under Horizon Europe to facilitate the beneficiaries’ cost reporting, the Court found no significant differences between Horizon 2020 and Horizon Europe as regards the regularity of expenditure;

70. Notes the Court finding that the Commission has implemented most of its recommendations made in previous years; nevertheless, is concerned that the tool Personnel Costs Wizard, the use of which the Court strongly encourages, especially by certain categories of beneficiaries that are more prone to committing errors, such as SMEs and new entrants, was not yet ready at the time of the Court’s audit; notes the Court’s finding that for five of the 34 Horizon Europe transactions in its 2024 sample, beneficiaries either still calculated personnel costs using the method applicable to Horizon 2020 or did not fully follow the new rules applicable to Horizon Europe; considers that the development and use of tools such as the Personnel Costs Wizard could help beneficiaries apply the correct rules for calculating personnel costs, the major source of error under MFF heading 1;

Change 56

Changed60.71. Notes that in 2024 the Commission has continued the roll out of simplified cost options such as lump sums and unit costs in Horizon Europe, with lump sum funding accounting for 27 % of the total call budget in the work programmes for 2024; recalls the Court’s clarification that when lump sum grants are given, the beneficiaries are paid a pre-defined lump sum for each completed work package, regardless of the actual costs incurred; further notes that the Commission’s target is to provide by 2027 at least 50 % of the call budget in published work programmes in the form of lump sums; is concerned, that for the reasons explained in box 5.4 of its Annual report, the Court was not able to assess whether including a specific item of equipment in the budget proposal was necessary and justified in the case of a lump sum grant it audited; calls on the Commission to ensure that future funding instruments include safeguards to avoid overcompensation for equipment that was not actually purchased although included in the lump sum budget, in line with the Court’s observations;

Change 57

Changed61.72. Acknowledges that the Horizon Europe interim evaluation found that lump sums provided real simplification for beneficiaries, as estimated savings range between 14 % and 30 % of their administrative costs; notes the findings of the Commission’s assessment of Lump Sum Funding in Horizon 2020 and Horizon Europe 2018-2024, including that beneficiaries also reported to the Commission that they would welcome more clarity on how lump sum grants would be audited; appreciates that in 2024, the Commission put in place an ex-post control strategy for Horizon Europe grants, including a methodology for ex-post technical reviews in lump sum grants; notes that the Commission has launched the first 30 Horizon Europe ex-post technical reviews in the fourth quarter of 2024; recognises, at the same time, the Court's observation that although lump sums are appropriate for clearly defined work packages, difficulties in the implementation of such schemes would arise in situations where work packages are delayed, partially completed or some of the activities stipulated in the work package are replaced;

Change 58

Changed62.73. Notes the Court’s finding that there has been a significant increase in EUUnion financial support to third parties in research, as under Horizon 2020 grants EUR 2,5 billion of such funding was provided for the whole programming period, whereas by the end of 2024, EUR 5,5 billion was provided under Horizon Europe; is concerned by the Court’s finding that for nine out of 11 transactions sampled relating to grants to third parties, the EUR 60 000 funding threshold set by Article 207 of the Financial Regulation had been exceeded without proper justification for derogation in the work programme or the call; notes that in the Commission’s view, the need for higher grant amounts is inherent to certain types of actions; is alarmed by the Court’s finding that third parties are not required to demonstrate the effectiveness of their controls to ensure the regularity of Union spending; agrees with the Court that this poses a risk to sound financial management and the protection of the Union’s financial interests;

Change 59

Changed63.74. Notes that Union research and innovation programmes, including Horizon Europe, support the development of advanced technologies for civil applications, but acknowledges that certain technologies may carry inherent dual-use risks; considers that strengthening Union defence requires enhanced support for research and innovation under Horizon Europe; highlights the significant potential of emerging technologies, particularly in areas such as artificial intelligence, cybersecurity and quantum computing, to contribute to the Union’s security and resilience; considers that civilian research and innovation programmes should therefore be appropriately supported and strategically aligned, including, where relevant, by enabling their results to be used for dual-use purposes in order to safeguard the EU’s defence capabilities; notes with concern however, the Commission’s reply that it is currently not monitoring specifically after the end of a project if the results of Union-funded R&I projects are taken forward for dual use, military or defence applications; calls on the Commission to ensure appropriate monitoring of the follow-up of Union-funded R&I projects with potential dual use, military or defence applications in line with Union requirements; underlines the importance of ensuring that Union funding is fully consistent with the Union’s values and obligations under international law; stresses at the same time the need for the Commission to strengthen the follow-up of Union-funded research results, including their transition to commercial use, in order to maximise societal impact and ensure an adequate return on investment for taxpayers;

Change 60

Removed64. Recalls that on 10 March 2022 the European Parliament decided to set up the PEGA Committee to investigate alleged infringement or maladministration in the application of Union law in relation to the use of Pegasus and equivalent spyware surveillance software and the European Parliament recommendation of 15 June 2023 to the Council and the Commission adopted following PEGA Committee’s work; expresses its profound concern about media reports alleging that Union funding has directly supported companies implicated in the development, deployment and export of spyware by entities whose technologies have been linked to unlawful surveillance of journalists, human rights defenders and political actors in the Union and in third countries; notes the Commission’s reply that the proper use of Union funds is ensured by various contractual provisions related to, for example, the obligation to respect the highest ethical standards and applicable law when implementing the action, and the obligation to ensure the respect of basic Union values and that failure to respect these obligations can result in various contractual measures, including suspension of contract or payments and contract termination; notes also the Commission’s written reply that it considers that it has put in place several measures to address the risk that spyware falls into the wrong hands and increase protection for the potential victims of spyware, including European Media Freedom Act, e-Privacy Directive, Cyber Resilience Act and Dual-use regulation and that its annual Rule of Law reports also cover developments regarding the allegations of illegal use of spyware;

Added75. Recalls that the EIB Group has been allocated 75 % (EUR 19,6 billion) of the Union budgetary guarantee under the InvestEU Regulation; recalls also the discharge authority’s recommendations in its previous reports on the control of the financial activities of the EIB; notes the accountability and audit gaps in relation to the EIB’s operations, as identified in the Contact Committee statement CC 1/2025; stresses the need to align and adapt the audit framework to the EIB’s expanded mandate; urges the Commission to actively support the granting of full audit access for the European Court of Auditors to the EIB’s activities; underlines the need for comprehensive information on the EIB’s portfolio quality and risk management practices to enable meaningful democratic oversight of its operations; calls on the Commission to engage with the EIB in order to provide reporting on its portfolio quality to the discharge authority, ensure that risk assessment profiles for large-scale investments are subject to independent review and that the EIB discloses the lessons learned from cases where significant lending has resulted in default; stresses that public confidence in the sound management of Union-backed lending depends on the highest standards of institutional integrity; urges, therefore, the Commission to require the EIB to strengthen conflict-of-interest prevention mechanisms;

Removed65. Notes the Commission’s reply to CONT that the companies in question have received a total of EUR 12,77 million from the Union budget since 2021; regrets that despite the discharge rapporteur’s repeated requests, the Commission only shared with the CONT committee partial information on the total amount of Union funding allocated to spyware or intrusive surveillance software firms, as the reply it provided is limited to information already publicly available in the Financial Transparency System (FTS), which currently only publishes information on beneficiaries and contractors under direct management and on implementing partners under indirect management; considers that based on media reports, it cannot be excluded that the companies in question might have also received Union funding from programmes under shared management and that additional spyware companies may have benefitted from Union funding; deplores the fact that the discharge authority received an incomplete reply to its request;

Added76. Underlines the strategic importance of research in the field of defence for strengthening the Union’s security and long-term resilience; emphasises that defence and security research requires close and trusted cooperation among Member States to ensure a more cost-effective and efficient use of Union taxpayers’ money, avoid unnecessary duplication and foster synergies; underlines that research activities in this domain necessarily involve highly sensitive data, technologies and information which must be subject to the highest standards of protection against external interference or malicious manipulation; stresses, in this context, the urgent need to develop a common and robust protective architecture at Union level to counter hybrid threats and safeguard critical knowledge, infrastructure and innovation ecosystems;

Added77. Recalls that on 10 March 2022 the European Parliament decided to set up the PEGA Committee to investigate alleged infringement or maladministration in the application of Union law in relation to the use of Pegasus and equivalent spyware surveillance software and the European Parliament recommendation of 15 June 2023 to the Council and the Commission adopted following PEGA Committee’s work; expresses its dissatisfaction that the Commission still has not presented enforcement measures and legislative follow-up to Parliament’s recommendations regarding the use of Pegasus and equivalent spyware; takes note of media reports alleging that Union funding may have directly supported companies implicated in the development, deployment and export of spyware by entities whose technologies have been linked to unlawful surveillance of journalists, human rights defenders and political actors in the Union and in third countries; notes the Commission’s reply that the proper use of Union funds is ensured by various contractual provisions requiring respect of the applicable law and Union values and that failure to respect these obligations can result in various contractual measures, including suspension of contract or payments and contract termination; notes also the Commission’s written reply that it considers that it has put in place several measures to address the risk that spyware falls into the wrong hands and increase protection for the potential victims of spyware, including European Media Freedom Act, e-Privacy Directive, Cyber Resilience Act and Dual-use regulation and that its annual Rule of Law reports also cover developments regarding the allegations of illegal use of spyware;

Added78. Notes the Commission’s reply to the Committee on Budgetary Control that the companies in question have received a total of EUR 12,77 million from the Union budget since 2021; regrets that the Commission only shared with the Committee on Budgetary Control partial information on the total amount of Union funding allocated to spyware or intrusive surveillance software firms, as the reply it provided is limited to information already publicly available in the Financial Transparency System (FTS), which currently only publishes information on beneficiaries and contractors under direct management and on implementing partners under indirect management; deplores the fact that the discharge authority received an incomplete reply to its request;

79. Highlights the importance of Union investments in the development of high performing, sustainable and efficiently interconnected trans-European networks in the fields of transport, energy and digital services and notes that the CEF, with EUR 4,1 billion of expenditure in 2024, is a key Union instrument in delivering these objectives;

Change 61

Changed67. Recalls that to achieve the Union’s ambition of reaching climate neutrality by 2050, the Union needs to transform its energy system;80. notesNotes the Commission’s written reply that since 2021, EUR 12,63 million was spent on renewable hydrogen production and related infrastructure from the CEF -renewablerenewable energy funding and EUR 187,21 million of CEF-TransportCEF transport funding was spent on refuelling stations; notes further that between 2021 and 2024 the Commission allocated EUR 791,13 million in grants under the Innovation Fund to e-fuel projects; underlines the importance of allocating Union funds to support solutions with potential for long-term decarbonisation and scalability and of taking an evidence-based approach to emerging solutions in order to ensure the efficient use of public resources, maximise climate impact and ensure that public resources are used efficiently; stresses that all technologies need to be assessed on their effectiveness and scalability; calls for caution in the allocation of Union funds to technologies with an uncertain or limited long-term role in the decarbonisation pathwaypathway; suchstresses asthat e-fuels,achieving inclimate orderneutrality by 2050 is of decisive importance; emphasises the need to ensure a reliable, affordable and resilient Union energy supply; notes, in this context, that scarcethe publicCommission resourcesshould arepromote prioritiseda technology-neutral approach to research and innovation; calls in particular for the support of cross-border projects to foster genuinely European solutions within the highestfield climateof impactenergy supply, ensure the cost-efficient use of Union funds, strengthen the internal market, and scalability;create EU added value; calls on the Commission to ensure that funding criteria are based on measurable emissions reduction outcomes rather than prescriptive technology preferences;

Change 62

Changed68.81. Recalls that the Digital Markets Act (DMA) aims to ensure fair and innovation-friendly digital markets in Europe, preventing any single actor from dominating it at the expense of consumers, competitors, or democratic oversight; stresses the significant negative effects that digital market dominance pose to fundamental rights and the spread of information manipulation and disinformation and the need for joint Union action in these areas; notes that during 2024, the Directorate-General for Competition (DG COMP)facedCOMP) faced serious understaffing, as reported in its Annual Activity Report (AAR) 2024; notes that DG COMP reallocated staff to units responsible for the enforcement of the DMA which created staff shortages in other departments;

Recommendations

82. Calls on the Commission to:

(i) fully address the Court’s recommendations concerning legality and regularity and performance reporting;

Change 63

Removed(ii) introduce requirements for implementing partners to provide performance reporting based on project-level data also for financial instruments implemented under indirect management, such as InvestEU;

Added(ii) secure the provision of significantly increased Union funding for research and innovation, determined by the principle of excellence and merit;

Removed(iii) conduct a review of the simplification measures introduced for Horizon Europe to assess whether they provide genuine simplification for project beneficiaries and applicants;

Added(iii) introduce binding requirements for implementing partners, including the EIB, to provide performance reporting based on project-level data also for financial instruments implemented under indirect management, such as InvestEU; demands that such reporting should rely on a balanced mix of output, result, and impact indicators;

Added(iv) conduct a review of the simplification measures introduced for Horizon Europe to assess whether they provide genuine simplification for project beneficiaries and applicants, including their impact on administrative burden, participation rates, geographical balance and ease of access for new applicants, in particular from less performing regions, and fostering synergies with other Union instruments, including cohesion policy and the Seal of Excellence;

(v) develop and encourage the use of tools, such as the Personnel Costs Wizard, that help beneficiaries apply the correct rules for calculating personnel costs;

(vi) evaluate the lessons learned from the ex-post technical reviews for lump sum grants launched in 2024 and in 2025, and report back to the discharge authority;

Change 64

Removed(vi) conduct a comprehensive review of Union funding for the development, deployment and export of spyware or intrusive surveillance software across all management modes since 2021, and share it with the discharge authority;

Added(vii) ensure that future funding instruments include safeguards to avoid overcompensation for equipment that was not actually purchased although included in the lump sum budget;

Removed(vii) ensure that Union research funding, including under Horizon Europe and through agreements with non-EU partners, does not contribute to the development of spyware or equivalent intrusive surveillance technologies in line with the Parliament’s relevant recommendations adopted on 15 June 2023;

Added(viii) review a representative sample of lump sum grants, and analyse the lessons learnt from their implementation and the methods used to establish Union financial support, before further extending the use of lump sum grants to future funding instruments;

Added(ix) conduct a comprehensive review of Union funding for the development, deployment and export of spyware or intrusive surveillance software across all management modes since 2021, and prepare an action plan to prevent the abuse of spyware in the Union, and share them with the discharge authority;

Added(x) pursue a technology-neutral approach to research and innovation, including by promoting cross-border projects, in order to support the achievement of climate neutrality by 2050 and foster a stable, resilient and affordable Union energy supply, while guaranteeing cost-effectiveness, accelerating progress towards Union climate goals and enhancing competitiveness;

Added(xi) reinforce cooperation among Member States in defence- and security-related research through Union-funded R&I programmes, while promoting synergies, ensuring the robust protection of sensitive data and protection of technologies against foreign interference and hybrid threats, and where appropriate, enabling the responsible use of research results for dual-use purposes in order to support the Union’s resilience, defence capabilities, and strategic independence;

Added(xii) ensure that Union research funding, including under Horizon Europe and through agreements with non-Union partners, is allocated in a manner consistent with Union values and does not contribute to the support of spyware or intrusive surveillance technologies, in line with the Parliament’s relevant recommendations adopted on 15 June 2023;

Cohesion, Resilience and Values

Change 65

Changed70.83. NotesUnderlines the role of Union cohesion policy in reducing economic, social and territorial disparities within the Union, as established by the Treaties, as well as for supporting the implementation of the European Pillar of Social Rights; insists on continued support for cohesion in the post-2027 MFF, following the principles of partnership and multilevel governance, and with the involvement of local and regional authorities and relevant stakeholders; notes that the budget for the programmes under MFF-Heading 2 ‘Cohesion, resilience and values’ was EUR 61,4 billion (32,1 % of the Union budget) distributed as follows: 47,7 % for the European Regional Development Fund (ERDF)ERDF and other regional operations, 16,4 % for the European Social Fund (ESF), 6,7 % for the Cohesion Fund (CF),CF, 6,6 % for Erasmus+, 2,2 % for CEF Transport, 3,6 % for EU Recovery, and 3,1 % for other schemes;

Change 66

Changed71.84. Notes that the Court has examined a sample of 223 transactions covering the full range of spending under MFF Heading 2; notes with concern that the Court’s estimated overall level of error in expenditure under this heading in 2024 is again significantly above the materiality threshold at 5,7 %; reminds that the Court’s error rate includes the errors that remained undetected by the Member States and the Commission and demonstrate that the Commission’s error rates are underestimated;

85. Notes the Court’s categorisation of errors found in cohesion expenditure, with ineligible costs accounting for 49 % of errors, serious non-compliance in public procurement and state aid rules accounting for 23 %, ineligible projects for 18 %; notes, furthermore, that ERDF and CF related expenditure account for the largest share of errors (54 %);

86. Notes that overall, the Directorate-General for Regional and Urban Policy (DG REGIO) concluded in its AAR that a material level or irregular expenditure remained in the 2024 accounts for the ERDF/CF, despite the results of the controls and corrections already applied at Member State level, and that the Directorate-General for Employment, Social Affairs and Inclusion (DG EMPL) concluded the same for the ESF/YEI and FEAD;

87. Reiterates its concerns about the Court’s conclusion in its Review 03/2024 ‘An overview of the assurance framework and the key factors contributing to errors in 2014-2020 cohesion spending’ that the Commission underestimates the level of errors it reports;