Sound financial management
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Sound financial management

Sound financial management

The EU budget shall be implemented in accordance with sound financial management, comprising the principles of economy, efficiency and effectiveness.
Performance audit
Concept
Ref: 32.100

Principles

Article 317 of the Treaty states that "The Commission shall implement the budget...on its own responsibility...having regard to the principles of sound financial management" and that "member states shall cooperate with the Commission to ensure that the appropriations are used in accordance with the principles of sound financial management". According to Article 33 of the Financial Regulation, the concept of sound financial management comprises the principles of economy, efficiency and effectiveness.

Instructions

Auditors should identify potential risks to achieving economy, efficiency and effectiveness and thereby develop audit questions. Each concept is important and where the specific priority lies will be decided on a case-by-case basis; however, auditors are encouraged to consider effectiveness as an element of the analysis whenever possible. A performance audit is not supposed, and should not aim, to cover a simultaneous and comprehensive examination of all aspects of economy, efficiency and effectiveness. It will rather examine certain issues related to economy, efficiency or effectiveness, or to a combination thereof, based on the significant potential risks identified. In this way, the audit is less likely to run the risk of being overly ambitious. The pages defining the concepts of economy, efficiency and effectiveness include examples of risks and issues to be addressed in audits for each of them.

Related documents

Rules Art 317 TFEU
Art 33 FR
Last Modified: 04/11/2021 11:33   Tags: