The European Court of Auditors has released a report indicating a concerning lack of transparency and accountability related to the €7 billion in funding provided to non-governmental organizations (NGOs) by the European Union from 2021 to 2023. The findings suggest that issues surrounding the funding of NGOs extend beyond previously acknowledged problems, raising questions about the integrity of the funding process.

Laima Andrikienė, who led the audit, pointed out that EU funding for NGOs is plagued by opacity, with insufficient disclosure of advocacy and lobbying activities funded by the EU. The report asserts that there are inadequate mechanisms in place to ensure that funded organizations align with EU values, which poses a potential reputational risk to the institution.

The findings come amid ongoing debates in Brussels over the role of EU funding for NGOs, particularly with accusations from progressive political allies against centre-right politicians, alleging the use of authoritarian strategies to silence dissenting voices.

Specific allegations include the misuse of NGOs to bypass legislative processes through undisclosed contracts awarded to environmental groups within the LIFE programme.

The audit did present evidence of notable abuses, specifically citing two cases where funding from the LIFE programme subsidized advocacy work directed at policymakers.

In addition, the report identified instances of misleading classifications of organizations, including a large research institute listed as an NGO despite being composed entirely of government representatives and another NGO that pursued commercial activities.

Greens MEP Daniel Freund acknowledged the auditors’ concerns over the allocation of EU funds but indicated that the issue of transparency is not confined solely to NGOs.

He advocated for a broader reassessment of the general suspicions surrounding the role of NGOs in EU policymaking.

The audit underscores significant financial implications, particularly as it reveals that the funding allocated to NGOs constitutes approximately 4% of the EU budget.

This includes funds directed towards regional development and various domestic policies, emphasizing the scale of financial resources involved.

Despite the substantial overall funding, Andrikienė advised caution when interpreting these figures, noting the absence of reliable oversight regarding the total money disbursed to NGOs.

To combat these transparency concerns, the European Commission has stated intentions to clarify the definition of an NGO and to provide annual financial disclosures related to EU expenditures on such organizations.

Changes are expected to improve scrutiny over compliance with EU values, moving from self-reporting by NGOs to active verification practices by the Commission.

The report also highlights that, while some progress has been made since previous audits, the information regarding EU funding to NGOs remains fragmented, impeding effective analysis of funding allocations and the overall impact of these organizations on EU policy development.

This information is particularly difficult to assess in light of varied definitions of NGOs across member states, with the EU's refined definition introduced in 2024 characterizing NGOs as independent, non-profit entities.

The auditors noted that the current self-certification process allows for insufficient verification of NGO statuses, which can lead to misclassification and complicates transparency efforts within the EU’s financial systems.

The report reflects increasing political pressure from the European Parliament for heightened accountability regarding EU financial dealings with NGOs, given their essential role in facilitating citizen engagement in democratic processes.