Ireland has yet to draw down any of the €1bn entitlement from the EU's huge Covid recovery fund, according to the European Court of Auditors (ECA).

The overall fund, worth €724bn, was agreed by EU leaders in July 2020 as a response to the impact of the Covid pandemic on European economies.

Under the so-called Recovery and Resilience Facility (RRF) billions of euro would be disbursed to member states to help them recover from the immediate impact of the pandemic, but also to equip countries to meet climate and digitalisation goals.

In order to qualify for a mix of loans and grants, member states were required to set out specific reforms and investment projects.

Ireland’s plan involved 16 investment measures and nine reforms which would trigger €989m in grants.

Some 42% of the plan was due to support climate-related investments and 32% would be spent on the digital transition.

The plan was approved by member states in 2021.

Ireland among a number of countries

The European Court of Auditors today said that Ireland was among a number of countries which had yet to draw down either the 13pc of pre-financing that was available, or any of the main tranche of funds.

In a report on the operation of the RRF, the ECA also found that there were shortcomings in how the European Commission verified information from member states on whether RRF-funded projects complied with EU and national rules.

Under the rules, RRF money is provided to member states after the European Commission is certain that capitals have fulfilled objectives agreed upfront in their national recovery plans through meeting milestones and targets.

According to ECA president Tony Murphy, however, compliance with EU and national rules such as those on procurement, state aid and eligibility is not a pre-condition for payment, unlike for other EU funding programmes such as the seven year budget.

"Citizens will only trust new ways of EU funding if they can be sure that their money is being spent properly," Mr Murphy said.

"Currently, there is a gap in terms of the assurance the Commission can provide for the EU's main pandemic recovery fund and a lack of accountability at EU level," he said.

Most of the Covid fund, which is made up of €385.8bn in loans and €338bn in grants, was raised through the European Commission borrowing on the capital markets. The funds will need to be repaid by 2058.

The report warns that non-compliance with EU and national rules in the spending of RRF funds constituted a "serious risk" to the EU’s financial interests.