In its Special Report No. 26/2023, published on 24 October 2023, the European Court of Auditors (ECA) criticised that the monitoring system of the Recovery and Resilience Facility (RRF) is insufficient for measuring the overall performance of the recovery fund, i.e. not allowing to answer the question as to how well an EU-funded action has met its objectives and provides value for money. Measuring overall performance should, however, be a fundamental element to ensure accountability towards citizens given that the recovery fund itself claims to be performance-based. The report sees weaknesses in the two main building blocks of the monitoring system: (1) milestones and targets for tracking member states’ progress on reforms and investments; and (2) 14 predefined common indicators for monitoring success in achieving the RRF’s objectives.

First, milestones and targets are only steps in implementation (e.g., adopting a law, selecting projects, or signing contracts) and largely focus on what the projects finance (e.g., the number of people attending training, the number of square metres renovated, or the number of electric vehicles purchased), but they are unsuitable to measuring results (e.g. the number of people employed, savings in energy consumption, and a reduction in CO2 emissions). Second, the vast majority of common indicators do not measure results either, and they will often not provide enough information on how projects on the ground contribute to the RRF’s general objectives. Reasons for this are that some reforms and investments could not be linked to any indicator, such as major structural reforms (economic, labour market and judicial reforms) or investments in infrastructure and public transport, or common indicators do not fully cover the RRF’s objectives, e.g., lacking indicators for the rule of law, the financial sector or taxation.

Looking at data quality and reporting obligations, the auditors see remaining risks to data reliability, especially at final recipient level. The recovery and resilience scoreboard, by means of which the Commission ensures reporting on the implementation of the RRF, is user-friendly but is affected by data quality issues and lacks transparency in certain respects, according to the ECA.

The ECA recommends, inter alia, that the Commission ensures a comprehensive performance monitoring and evaluation framework, improves data quality, and takes care of more informative and consistent reporting.