The European Court of Auditors (ECA; French: Cour des comptes européenne) is the supreme audit institution of the European Union (EU). It was established in 1975 in Luxembourg and is one of the seven EU institutions. The Court comprises one member from each EU member state (currently ) supported by approximately 800 civil servants.
History
The ECA was created by the 1975 Budgetary Treaty and was formally established on 18 October 1977, holding its first session a week later. At that time the ECA was not a formal institution; it was an external body designed to audit the finances of the European Communities. It replaced two separate audit bodies, one which dealt with the finances of the European Economic Community and Euratom, and one which dealt with the European Coal and Steel Community.
The ECA did not have a defined legal status until the Treaty of Maastricht when it was made the fifth institution, the first new institution since the founding of the Community. By becoming an institution it gained some new powers, such as the ability to bring actions before the European Court of Justice (ECJ). At first its audit power related only to the European Community pillar of the European Union (EU), but under the Treaty of Amsterdam it gained the full power to audit the finances of the whole of the EU.
Functions
Despite its name, the ECA has no jurisdictional functions. It is rather a professional external investigatory audit agency. The primary role of the ECA is to externally check if the budget of the European Union has been implemented correctly and that EU funds have been spent legally and with sound management. In doing so, the ECA checks the paperwork of all persons handling any income or expenditure of the Union and carries out spot checks. The ECA is bound to report any problems in its reports for the attention of the EU's Member States and institutions, these reports include its general and specific annual reports, as well as special reports on its performance audits. The ECA 's decision is the basis for the European Commission decisions; for example, when the ECA found problems in the management of EU funds in the regions of England, the Commission suspended funds to those regions and is prepared to fine those who do not return to acceptable standards.
In this role, the ECA has to remain independent yet remain in touch with the other institutions; for example, a key role is the presentation of the ECA's annual report to the European Parliament. It is based on this report that the Parliament makes its decision on whether or not to sign off the European Commission's handling of the budget for that year. The Parliament notably refused to do this in 1984 and 1999, the latter case forced the resignation of the Santer Commission. The ECA, if satisfied, also sends assurances to the Council and Parliament that the taxpayers' money is being properly used, and the ECA must be consulted before the adoption of any legislation with financial implications, but its opinion is never binding.
Organisation
The ECA is composed of one member from each EU Member State, each of whom is appointed unanimously by the Council of the European Union for a renewable term of six years. They are not all replaced every six years, however, as their terms do not coincide (four of the original members began with reduced terms of four years for this reason). Members are chosen from people who have served in national audit bodies, who are qualified for the office and whose independence is beyond doubt. While serving in the Court, members cannot engage in any other professional activities.
As the body is independent, its members are free to decide their own organisation and rules of procedure, although these must be ratified by the Council of the European Union. Since the Treaty of Nice, the ECA can set up "chambers" (with only a few Members each) to adopt certain types of reports or opinions.