The Commission has published a Communication on the protection of the European Union Budget covering the situation to end 2012. The communication highlights how the Commission protects the EU budget from undue or irregular expenditure via two main methods: preventive actions and correction mechanisms. The financial corrections as the main corrective measure are applied to ensure that EU funds are used properly and for the purposes for which they were given.
When Commission manages the EU funds together with Member States (i.e. Agriculture and Cohesion policy which accounts for around 80% of the annual EU Budget), the Member States are primarily responsible for the implementation of EU programmes, as well as for the prevention, detection and correction of errors and irregularities. Under such shared management all financial corrections and recoveries have an impact on national budgets regardless of their method of implementation.
Under other policies (e.g. research and innovation, environment, education, culture), where the Commission is directly responsible for the management of EU funds (approximately for 20% of the annual EU budget), the Commission puts in place preventive actions and takes corrective actions when necessary to ensure the recovery of money to the EU budget.
In the conclusion of this communication the Commission demonstrates that the preventive and corrective measures in place ensure that expenditure incurred in breach of law is excluded from EU funding.
Documents: Protection of the European Union Budget to end 2012 - Communication from the Commission to the European Parliament