European Court of Auditors issues opinions on ECF and Horizon Europe

On 12 January 2026, the European Court of Auditors (ECA) issued two opinions on the European Commission’s legislative proposals for the European Competitiveness Fund and the next Horizon Europe programme of 16 July 2025. These are the first in a series of opinions the ECA will be issuing on the proposals for the EU’s 2028-2034 budget. The Council of the EU and the European Parliament, which will ultimately agree on the budget, have asked for the auditors’ views before they themselves examine the proposals. The auditors provide independent and expert advice on the budget’s design, governance, performance framework, and financial control arrangements.

In their report, the auditors focus on the following main points:

• Investing in the EU’s competitiveness, innovation and research is an EU-wide policy priority, and potentially also has high EU added value. However, there is no common definition of this concept in EU legislation or in the ECF and Horizon Europe proposals. The ECA concludes that without such a common definition and its coherent application, it will not be possible to maximise the EU added value.
• The auditors note that both proposals contain numerous references to the EU’s cross-cutting priorities, but neither the Commission nor the Member States have comprehensive, reliable data on the use of EU funds for the related objectives, and the proposals do not address the issue.
• The ECA also sees a need to clarify further how the principle of ‘excellence’ would be applied in all four pillars of Horizon Europe, noting that it is not explicitly mentioned in pillars II and III, which together make up around 65% of the total Horizon Europe budget.
• Moreover, while the Horizon Europe proposal refers to the European Semester process, this is not the case for the draft ECF regulation. In addition, it is not clear how the European Semester targets should be achieved.
• The ECF proposal will allow funds to be reallocated quickly across policy areas, and even for additional contributions to be made by Member States or other stakeholders. This enhanced budget flexibility could have state-aid implications which need to be clarified, the auditors note. They also advise specifying minimum requirements for revolving capacity (re-using funding multiple times for guarantees, loans or equity stakes in the course of programme implementation), and setting management fees at reasonably low levels for partners (such as the European Investment Bank or other financial institutions) that implement the programme.
• The ECF notes that both proposals make efforts at simplification through a single rulebook, harmonised payment conditions, and unified data exchange. However, the ECF sees a need for clarification how the simplification efforts will benefit those carrying out EU-funded research and innovation projects. Some key elements also need to be clarified, e.g. regarding procurement, the use of financing not linked to costs, and simplified cost options.
• The auditors additionally flag some risks in terms of compliance, transparency, accountability, and the traceability of the funds spent. Research, in particular, is a high-risk spending area where errors are frequent and material. Certain innovative approaches – such as pre-commercial procurement – would require particular attention. Simplification measures such as lump-sums reduce the administrative burden, but the rules for using them should be clear. The Commission will need to ensure transparency, accountability and traceability of the funds spent.
• As funding will be managed by the Commission either directly or indirectly (e.g. through partnerships, joint undertakings, and the EIB), the ECA will have full audit rights. However, the auditors ask that their audit rights should be safeguarded in any agreements with entrusted entities, beneficiaries and third parties.
• Lastly, another novelty of the 2028-2034 proposals is that a horizontal regulation – to be examined in another ECA opinion – sets out how programme performance will be monitored, assessed and evaluated. The ECA already points out at this stage that most of the indicators set out in Annex I to the proposed performance framework relate to outputs rather than results or impacts and are thus not sufficient for evaluating performance. The auditors also note that the proposed indicators would not easily allow for the collection of beneficiary-specific data. Moreover, the ECA points out the importance of data reliability. and suggests that the Commission’s obligations to carry out an implementation report during the programme period and an ex post evaluation are codified in the regulation.

For more information:

ECA - press release

ECA Opinion 01/2026 on the ECF and Opinion 02/2026 on Horizon Europe