Britain's Sunday Times reported it obtained excerpts of the not-yet-published report by the Luxembourg-based European Court of Auditors, which monitors funds sent to various countries.
The report said the European Union had little control over the money spent in the West Bank and Gaza from 2008 to 2012.
European investigators said there were "significant shortcomings" in the management of funds sent to the region, the newspaper reported. The auditors complained of a lack of measures to mitigate corruption and funds not being used for their intended purposes, the report said.
On Friday, Palestinian President Mahmoud Abbas blamed the "Israeli occupation" for a difficult economic situation. Abbas said he doubted there would be funds to pay the November salaries of Palestinian Authority workers if international aid isn't received, the Ma'an news agency reported.