Member States cannot exercise competence in areas

  Direct aids and market related expenditures (31%)
  Administration (6%)
The EU had an agreed budget of €120.7 billion for the year 2007 and €864.3 billion for the period 2007–2013,[91] representing 1.10% and 1.05% of the EU-27's GNI forecast for the respective periods. By comparison, the United Kingdom's expenditure for 2004 was estimated to be €759 billion, and France was estimated to have spent €801 billion. In 1960, the budget of the then European Economic Community was 0.03% of GDP.[92]
In the 2010 budget of €141.5 billion, the largest single expenditure item is "cohesion & competitiveness" with around 45% of the total budget.[93] Next comes "agriculture" with approximately 31% of the total.[93] "Rural development, environment and fisheries" takes up around 11%.[93] "Administration" accounts for around 6%.[93] The "EU as a global partner" and "citizenship, freedom, security and justice" bring up the rear with approximately 6% and 1% respectively.[93]
The Court of Auditors aims to ensure that the budget of the European Union has been properly accounted for. The court provides an audit report for each financial year to the Council and the European Parliament. The Parliament uses this to decide whether to approve the Commission's handling of the budget. The Court also gives opinions and proposals on financial legislation and anti-fraud actions.[94]
The Court of Auditors is legally obliged to provide the Parliament and the Council with "a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions".[95] The Court has refused to do so every year since 1993, qualifying their report of the Union's accounts every year since then.[96] In their report on 2009 the auditors found that five areas of Union expenditure, agriculture and the cohesion fund, were materially affected by error.[97] The European Commission estimated[when?] that the financial impact of irregularities was €1,863 million.[98]
Competences
EU member states retain all powers not explicitly handed to the European Union. In some areas the EU enjoys exclusive competence. These are areas in which member states have renounced any capacity to enact legislation. In other areas the EU and its member states share the competence to legislate. While both can legislate, member states can only legislate to the extent to which the EU has not. In other policy areas the EU can only co-ordinate, support and supplement member state action but cannot enact legislation with the aim of harmonising national laws.[99]
That a particular policy area falls into a certain category of competence is not necessarily indicative of what legislative procedure is used for enacting legislation within that policy area. Different legislative procedures are used within the same category of competence, and even with the same policy area.
The distribution of competences in various policy areas between Member States and the Union is divided in the following three categories:
As outlined in Part I, Title I of the consolidated Treaty on the Functioning of the European Union:       view talk edit
Exclusive competence:
"The Union has exclusive competence to make directives and conclude international agreements when provided for in a Union legislative act."
the customs union
the establishing of the competition rules necessary for the functioning of the internal market
monetary policy for the Member States whose currency is the euro
the conservation of marine biological resources under the common fisheries policy
common commercial policy
conclusion of certain international agreements
Shared competence:
"Member States cannot exercise competence in areas where the Union has done so."    "Union exercise of competence shall not result in Member States being prevented from exercising theirs in:"
the internal market
social policy, for the aspects defined in this Treaty
economic, social and territorial cohesion
agriculture and fisheries, excluding the conservation of marine biological resources
environment
consumer protection
transport
trans-European networks
energy
the area of freedom, security and justice
common safety concerns in public health matters, for the aspects defined in this Treaty
research, technological development and space
development cooperation, humanitarian aid