European Auditors Flag a Portugal 2020 Project for Suspected Fraud as Errors in EU Spending Rise to 3.8 Percent

The European Union's auditors have found that 3.8 percent of the money paid out of the bloc's budget in 2025 should not have been, up from 3.6 percent a year earlier. For Portugal, one of the largest per-person recipients of EU cohesion and recovery money, the annual report of the European Court of Auditors (ECA), released on 8 October, carries two messages: the recovery plan payments it checked came back with no findings, but one Portuguese company's project has been sent to the European prosecutors on suspicion of fraud.

What an error rate is, and what it is not

An "error", in the ECA's definition, is money that was not used in line with EU or national rules: an ineligible cost, a botched public tender, a missing invoice. A "quantifiable error" is an amount that should not have left the EU budget. Fraud is something else: the report defines it as an intentional act, such as false statements or documents. Most errors are mistakes or rule breaches, not theft.

The auditors tested a representative sample of 750 transactions from a €130.8 billion audit population, out of €176.3 billion of total EU budget spending in 2025. They estimate the overall level of error at 3.8 percent and say, with 95 percent confidence, that the true figure lies between 2.7 percent and 4.9 percent. That is above the 2 percent threshold the court treats as material, so it gave an adverse opinion on budget spending. The lower end of that range has stayed above 2 percent every year since 2021, the report says.

The biggest contributors were eligibility errors, breaches of procurement rules and missing supporting documents. By policy area, the ECA puts the error level at 6.6 percent for "cohesion, resilience and values", the heading that carries the regional development and social funds Portugal relies on, and 3.9 percent for "natural resources and environment", which includes farm payments.

Portugal in the sample

The court stresses that its sample is not designed to draw conclusions about individual countries, and Portugal's share was small. In cohesion spending, the auditors examined one Portuguese transaction and quantified an error in it, and the report names Portugal among the countries where it found breaches of public procurement rules. In natural resources, mostly farm payments, it tested six Portuguese transactions and quantified errors in two.

The recovery money came out better. Under the Plano de Recuperação e Resiliência (PRR, the Recovery and Resilience Plan), the EU pays countries for reaching agreed milestones and targets rather than reimbursing invoices. The ECA checked 30 of the milestones and targets behind Portugal's 2025 payments, which totalled €2,176 million, and recorded no findings of any kind against them. Across the EU, it found problems with 16 of the 420 milestones and targets it examined, affecting nine of 37 payments in nine countries. The court notes that this audit did not cover how final recipients spent the money.

One suspected fraud case from Portugal 2020

The ECA has no power to investigate fraud, but must report suspicions. In 2025 it sent 17 cases to the European Anti-Fraud Office (OLAF), down from 19 in 2024, and passed 12 of them to the Procuradoria Europeia (EPPO, the European Public Prosecutor's Office), which opened investigations in eight, according to the report.

One of those cases is Portuguese. João Leão, Portugal's member of the court, told the report's press conference that it involves a single company's €755,000 project carrying €391,000 of EU money under Portugal 2020, the 2014 to 2020 funding programme, and not the recovery plan, ECO reported. The case went to OLAF and the EPPO, and the EPPO now leads the investigation, he said. Mr Leão added that there had been no Portuguese suspicion the previous year, and that Portugal "stands out neither positively nor negatively" on fraud. Recovering ineligible Portugal 2020 spending was already a live issue: Portugal is still chasing about 400 million euros of it.

Mr Leão also commented on the Prosecutor General's decision to close the group set up to prevent fraud with EU funds, calling it "natural" because a specialised unit in the Departamento Central de Investigação e Ação Penal (DCIAP, the central criminal investigation department) will take over its work, ECO reported.

A crowded final stretch for the money

The report's budget chapter shows how much remains to be spent. By the end of 2025, Portugal had been paid or cleared €9,605 million of its €16,325 million in recovery grants, leaving €6,721 million. EU-wide, €237.5 billion of €359.9 billion in recovery grants (66 percent) had been paid, leaving up to €122.4 billion for 2026, around three times the 2025 payments. Milestones had to be met by 31 August 2026, final payment requests were due by 30 September and the European Commission must make every payment by 31 December, with unused money decommitted. Lisbon has declared its plan complete.

The slower track is the 2021 to 2027 cohesion money. Portugal had received 12.4 percent of its €23.3 billion allocation by the end of 2025, against an average of 16.6 percent; only Belgium and Spain were lower. Outstanding EU commitments, bills the budget will have to pay in future years, reached €501.1 billion at the end of 2025, the court says. Mr Leão told reporters that 2027 and 2028 would be the peak years for spending the current cohesion envelope as recovery money winds down, ECO reported.