EN    EN EN 
 
EN    EN  EUROPEAN COMMISSION 
Brussels, 18.11.2010 
SEC(2010)1437 final 
COMMISSION STAFF WORKING PAPER 
accompanying the REPORT FROM THE COMMISSION TO  THE EUROPEAN 
PARLIAMENT and THE COUNCIL on the follow-up to 2008 discharge – Replies to 
requests from the Council 
 
{COM(2010) 650}  
 
EN    EN TABLE OF CONTENTS 
INTRODUCTION................................................................................................................... ... 1 
COMMISSION STAFF WORKING PAPER acco mpanying the REPORT FROM THE 
COMMISSION TO THE EUROPEAN PARLIAMENT and THE COUNCIL on the follow-up to 2008 discharge – Replies to requests from the Council.......................... 2 
Introduction................................................................................................................... .... 3 
Chapter 1 - The Statement of Assuran ce (DAS) and supporting information.................. 6 
Chapter 2 - Commission inte rnal control system.............................................................. 8 
Chapter 3 - Budgetary Management............................................................................... 10 Chapter 4 - Revenue ....................................................................................................... 12 Chapter 5 - Agriculture and Natural Resources.............................................................. 13 Chapter 6 - Cohesion ...................................................................................................... 18 Chapter 7 - Research, Energy and Transport.................................................................. 22 Chapter 8 - External aid, Development and Enlargement .............................................. 25 Chapter 9 - Educati on and Citizenship ........................................................................... 27 
Chapter 10 - Economic and Financial Affairs ................................................................ 28 Chapter 11 - Administrative and other expenditure........................................................ 30 Special Report No. 8/2008 "Is cross compliance an effective policy?" ......................... 32 
Special Report No. 9/2008 "The effectiven ess of EU support in the area of freedom, 
security and justice for Bela rus, Moldova and Ukraine".................................. 33 
Special Report No. 10/2008 "EC development assistance to health  services in Sub 
Saharan Africa"................................................................................................. 34 
Special Report No. 11/2008 "The management  of the European Union support for the 
public storage operations of cereals"................................................................ 40 
Special Report No. 12/2008 "Instrument fo r Structural Policies for Pre-accession 
(ISPA), 2000-2006".......................................................................................... 41 
Special Report No. 1/2009 "Banking measures in the Mediterranean area in the context 
of the MEDA programme and the previous protocols".................................... 42 
Special Report No. 2/2009 "The European Union's Public Health Programme (2003-
2007): an effective way to improve health?".................................................... 43 
Special Report No. 3/2009 "The effectivene ss of Structural measures spending on waste 
water treatment for the 1994 1999 and 2000-2006 programme periods"......... 46 
 
EN    EN Special Report No. 4/2009 "The Commissi on's management of non-state actors' 
involvement in EC development cooperation"................................................. 48 
Special Report No. 5/2009 "The Co mmission's Treasury Management"....................... 51 
Special Report No. 6/2009 "European Uni on food aid for deprived persons: an 
assessment of the objectives, the means and the methods employed" ............. 53 
Special Report No. 7/2009 "The management  of the Galileo programme's development 
and validation phase"........................................................................................ 54 
Special Report No. 9/2009 "The efficiency a nd effectiveness of th e personnel selection 
activities carried out by the Europ ean Personnel Selection Office"................. 55 
Special Report No. 10/2009 "Information provision and promotion measures for 
agricultural products" ....................................................................................... 58 
Special Report No. 11/2009 "The sustainabi lity and the Commission's management of 
the LIFE-Nature projects" ................................................................................ 59 
Special Report No. 12/2009 "The effectiveness of the Commission's pr ojects in the area 
of Justice and Home Affairs for the Western Balkans".................................... 60 
Special Report No. 13/2009 "Delegating im plementing tasks to executive agencies: a 
successful option?" ........................................................................................... 62 
Special Report No. 14/2009 "Have the management instruments applied to the market in 
milk and milk products achieved their main objectives?"................................ 65 
European Development Funds........................................................................................ 66 Requests concerning individual agencies ....................................................................... 67 
 
EN 1   EN INTRODUCTION 
This Commission Staff Working Paper completes the Report from the Commission to the 
European Parliament and the Council on the Follow-up to 2008 Discharge {COM(2010) 
650}. It presents in deta il the answers to the 126 specific re quests made by the Council in the 
comments accompanying its Recommendations on the 2008 Discharges.1 
                                                 
1 For each specific recommendation a reference is given to the relevant Council document. The 
references for recommendations 1 to 50 are all for C ouncil document 5826/10 "Discharge to be given to 
the Commission in respect of the implementation of the budget for the financial year 2008" 
 
EN 2   EN COMMISSION STAFF WORKING PAPE R accompanying the REPORT 
FROM THE COMMISSION TO TH E EUROPEAN PARLIAMENT and 
THE COUNCIL on the follow-up to 2008 discharge – Replies to requests 
from the Council 
 
EN 3   EN Introduction 
1. (Council Doc. 5826/10 ADD 1, § 1, 2nd paragr aph, page 5, § 3, page 6, §§ 5 and 8, 
page 7 (and chapter 2, § 3, pages 13-15)) - The Council welcomes the notable 
improvements in the management and cont rol of funds, showing evidence of the 
progress made towards the principal obj ective of achieving a positive DAS. It 
acknowledges that it would be unrealistic to obtain immedi ate effects of the remedial 
actions taken by the Commission and the Member States. The Council urges all 
responsible actors to continue to improve  the financial management of EU funds. 
 The Council stresses the continuing need fo r simplification of expenditure schemes. 
It continues to encourage the Commissi on to propose clear and simple rules and 
regulations whenever possible, both at the moment of setting up new programmes 
and when revising existing regulations  and programmes. Taking note of the 
improvements already achieved and expected  through the streamlined legislation for 
the current programming period, it calls fo r further efforts in the preparation of 
programmes for the next multiannual financial framework. 
 However, the Council draws attention to th e necessity to maintain an appropriate 
balance between simplifying eligibility ru les and targeting expenditure towards 
intended objectives, while not undermini ng the level of assurance provided by 
improved controls. 
 The Council insists on the importance  of further improving the efficiency, 
effectiveness and consistency of controls, in order to pr ovide reasonable assurance of 
the sound financial management of  funds by all parties involved. 
 Moreover, the Council is of the opini on that the control burden must remain 
proportionate to the benefits derived from c ontrols undertaken at different levels. It 
asks the Commission to cooperate as closel y as possible with the Member States' 
authorities so that best use is made of all available information. 
 The Council encourages the Commission to  continue its work on the concept of 
tolerable risk of error, taking into consideration the balance between effectiveness and cost of controls, and looks forward to examining the Commission's proposals on 
this issue. 
Commission's response:
 
The Commission fully supports and is vigor ously pursuing the objectives sought by 
the Council, while recognising that simpli fying rules, targeting expenditure and 
maintaining a high level of assurance ar e sometimes conflictin g objectives that 
must be carefully balanced. The Commission has already laid the groundwork in 
its proposal for the triennial revision of  the Financial regulation, which should 
enable rules to be better adapted to the n eeds of beneficiaries, and emphasise the 
importance of the output of programmes as well as the inputs through a wider use 
of simplified costs. By the en d of 2010, the Commission will adopt a 
Communication examining possible ways forward in lightening the burden on 
small beneficiaries and assis ting large beneficiaries in achieving a high level of 
legality and regularity and sound financial management. 
 
EN 4   EN The Commission Communication on tolerable risk on error (TRE) for Research, 
energy and transport and Rural development was adopted on 26 May 2010 ("More 
or less controls?: Striking the right balance between administrative costs of control 
and the risk of error"(COM(2010)261) . The Commission will present TRE 
proposals for each major policy area: for Administrative expenditure before the 
end of 2010; for External aid, Developmen t and Enlargement in the beginning of 
2011 and progressively for the remaining se ctors, including Cohesion, later in 
2011. 
Finally, the Commission is co mmitted to continuing it s continuous effort of 
improving its internal control systems, as it has already proven  through the Action 
Plans of the past years. 
2. (Council Doc. 5826/10 ADD 1, §6, page 7) - The Commission and the Court should 
promote better coordination between them on audits in order not to duplicate audit 
efforts. Moreover, they should continue to cooperate, in fu ll respect of their 
individual competences a nd independence, towards a common understanding of the 
legislation. 
Commission's response:  
The Commission has taken the recommended  action. It works closely with the 
Member States and the Court of Auditors on the guidance it i ssues on the rules 
and procedures governing the use of Cohesi on policy funding. It routinely consults 
Member States on guidance documents through the various management and 
technical committees. The Court is invited to and does attend such meetings as 
well. On important issues or new pro cedures the Commission seeks the Court’s 
opinion specifically, as it is  doing for example on the ne w provisions for simplified 
cost options such as flat rates or on th e evaluation of the audit enquiry performed 
on 2007-2013 expenditure by the Commission.  
The Commission also organises training events for Member States to help 
disseminate guidance and spread good practi ces. An example was the “Train the 
trainers” seminar, with various specia lised workshops in June 2009 or the 
technical meeting on closure requirem ents for the 2000-2006 period in December 
2009 which was attended by representatives of winding-up bodies of all Member 
States.  
The Commission and the Court of Aud itors have put their cooperation on a 
permanent footing with so-called ”inter -institutional colloquia” at which they 
discuss questions of mutual concern su ch as audit metho dology and assessment 
and interpretation issues. Such colloquia are held on average twice a year. The 
most recent one took place on 14 January 2010. Some of the issues discussed are 
prepared by joint working groups. Such a working group deve loped a harmonised 
systems assessment methodology, which lays  down the criteria to be applied in 
arriving at opinions on the quality of sy stems in system audits. Member States' 
audit authorities have been encouraged to  apply the same me thodology. There is 
also a standing working group on interpre tation questions. This attempts to resolve 
differences of interpretation that arise in  the discussion of the audit findings 
underlying the Court’s annual report. Topics  currently being discussed include the 
provisions on simplified cost options, the results of the closur e audits for the 1994-
 
EN 5   EN 1999 period and public procurement issu es. Since 2008 the DAS findings reported 
in the Court's annual report have been discu ssed beforehand in tripartite meetings 
involving the Court, the Commis sion and the Member States. 
 
EN 6   EN Chapter 1 - The Statement of Assuran ce (DAS) and supporting information 
3. (Council Doc. 5826/10 ADD 1, §1, 1st and 2nd paragraph, page 8) - The Council 
encourages the Commission to assure th at this high quality of EU accounts is 
maintained.  
 While valuing the Commission's effo rts to improve the accounting control 
environment at the level of its Directorat es-General which have  contributed to a 
strengthening of the fina ncial reporting framework and accounting systems, the 
Council asks the Commission to take furthe r steps towards the cl osing of outstanding 
cross-cutting issues relating to interf aces between local financial management 
applications and the central accounting system , in order to minimise the risk to the 
reliability of the accounts, as well as towa rds the improvement of the quality of basic 
accounting data, notably regarding the correct  application of "cut-off" principles 
during the closure procedure. 
Commission's response:  
The quality of the accounting data is being closely followed-up within the 
Commission. The existing local financial management applications are already 
subject to a validation process with a view  to ensuring their consistency with the 
central accounting system. Also, the se rvices of the Accounting Officer are 
continuously monitoring the application of  "cut-off" principles throughout the 
Directorates General. 
4. (Council Doc. 5826/10 ADD 1, §1, 3rd paragraph, page 8) - The Commission 
should improve the completeness and accuracy  of the basic accounting data, notably 
on pre-financings and the re covery of undue payments. Furthermore, the Council 
stresses the need for a timely transfer of the assets of the EGNOS and Galileo 
programmes to the Commission's accounts. 
Commission's response:  
The Commission has continued with its accounting quality project which has 
improved the underlying accounting data us ed in preparing the 2009 accounts. 
More detailed information on the recovery of undue payments was also included in 
the 2009 accounts. The EGNOS assets were transferred to the Commission during 
2009 and have therefore been included on  the Commission's balance sheet at 
31/12/2009. The transfer of the Galileo assets is not foreseen until 2012. 
5. (Council Doc. 5826/10 ADD 1, §2, 5th paragraph, page 10) - The Commission 
should indicate in the annual accounts the vol ume of recoveries from previous years, 
including recoveries relating to funds under shared management.   
Commission's response:  
Extensive information on the recovery of undue expenses has been included in the 
2009 annual accounts. 
 
EN 7   EN 6. (Council Doc. 5826/10 ADD 1, §3,  4th paragraph, page 11) - The Court of Auditors 
and the Commission should inte nsify their coordination a nd cooperate closer with 
national authorities, with the aim of ma king best possible use of the results of 
controls and audits carried  out at national level, wh ile respecting the individual 
competences and independence. 
Commission's response:  
While fully respecting independence and national sovereignty, an enhanced 
cooperation with national authorities on  audit and control of EU funds could 
further the single audit concept and th e awareness at national level of the 
importance of sound financial manageme nt of EU funds. To promote the 
cooperation the Commission provides annual payment data to the national 
Supreme Audit Institutions (SAIs) and Fi nance Ministries and examine with these 
recipients, as well as other national audit bodies, how to further "add value" to the 
information provided and to the audit process more generally. The Commission 
furthermore encourages developing coopera tion between Commission services and 
SAI or other national audit bodies to make best use of existing audit evidence and 
resources. The Commission proposal for the triennial revision of the Financial 
Regulation also lays down strengthened  provisions on control and audit 
obligations of the Member States, as requir ed by Article 317 of the Treaty on the 
functioning of the EU, which also incl udes a proposal for an involvement of 
national audit bodies. 
 
EN 8   EN Chapter 2 - Commission internal control system 
7. (Council Doc. 5826/10 ADD 1, §2, 2nd paragraph, page 13) - The Council recalls 
the Court's suggestion to the Commission to add value to the process of annual summaries by identifying common problems, possible solutions or best practices and 
using this information in its supervisory role. 
Commission's response:
 
The Commission is taking the requeste d action. It considers that annual 
summaries can be a means for improving a ccountability in shared management if 
its guidelines are followed by Member States. 
The Commission has provided informatio n on the annual summaries in its 2009 
Report on the implementation of the Action Plan towards an integrated internal 
control framework (COM(2009)42) and in  the Annual Activity Reports of the 
Directorates General.  
The Commission revised its guidance on annual summaries and presented it to 
Member States in October and December 2009, taking into account 
recommendations of the study commissioned  by the European Parliament, such as 
emphasizing the value-added elements an d reducing redundant information. 
Finally, while significant progress has been made, the Commission considers that 
the current added value of annual summaries  is limited and that a stronger legal 
base is necessary to make fu rther progress. The triennial revision of the Financial 
Regulation in 2010 could provide an opportunity for this. 
For Agriculture the guideline regardi ng the establishment of the annual 
summaries is revised (for clarification purpos es) on an annual basis in the light of 
the experiences of the previous exerci se. Moreover, the guideline is further 
explained on the occasion of an annual co nference with the dire ctors of the paying 
agencies and the coordinating bodies. Since 2008 reporting year, Coordination 
Bodies in the Member States are requir ed, in their annual summaries, to address 
cross cutting issues. 
8. (Council Doc. 5826/10 ADD 1, §3, 5th paragraph, page 14) - The Council welcomes 
the measures taken by the Commission to pr ovide training for staff involved in 
controls for the managing and certifying au thorities of the Member States, enabling 
participants to give guidance and disseminate best practices. It believes that this work 
contributes to strengthening th e capacities of the staff at  all levels of control and 
invites the Commission to continue these efforts. 
Commission's response:  
The Commission is taking the requested action. It considers appropriate training 
for national authorities of utmost importan ce in the context of shared management 
of the structural funds. It, therefore, welcomes the positive reference of the 
Council. Since the beginning of the cu rrent programming period the Commission 
has provided regular and early training and guidance to the competent authorities 
 
EN 9   EN in the Member States. Specific training actions were also foreseen in the 
Commission Action Plan adopted in February 2008 (COM(2008)97) in that regard 
and are carried out on a regular basis. 
9. (Council Doc. 5826/10 ADD 1, §3, 9th paragraph, page 15) - The Council 
underlines the importance of ensuring that the supervisory and control systems address the risks effectively at all implement ation levels and that in this regard the 
attention is primarily directed to those e xpenditure areas where a high level of errors 
is reported. 
Commission's response:
 
The Commission agrees that increasing the effectiveness of supervisory and 
control systems at all levels is a key prereq uisite for further reducing error rates. 
The Commission has already taken determined action to improve its internal 
control systems over the last few years, notably through the Action Plan towards 
an integrated internal control framework (COM (2006) 9) and the Action Plan for 
structural actions (COM (2008) 97), whic h both have contributed to a significant 
overall strengthening of the supervisor y and control systems (see the "impact 
reports" on the action plans; COM ( 2009) 43 and COM (2010) 52, respectively). 
As a result of the action plans, Commission  services have been motivated to look 
critically at their controls and supe rvision and to engage in a process of 
continuous improvement with a view to mitig ating the risks better. This attitude is 
further reinforced by the two compulsory  annual exercises, where each service 
identifies its main risks (within the framework of the Ma nagement Plan) and 
where it justifies the reasons underlying th e financial assurance it provides (in the 
Annual Activity Report). 
The Commission will continue to drive this  improvement process, in particular in 
the expenditure areas still affected by a high  error level. In fact, in response to a 
European Parliament request, it has comm itted to increase by 20% the expenditure 
share assessed as "green" by the Court of Auditors by 2014. To reach this 
ambitious objective, Commissioners Šeme ta and Lewandowski have outlined the 
following priority actions (see their note of 2 March 2010), all of which should 
have an impact on the areas with high e rror rates; requiring annual management 
declarations of assurance from the managing bodies in Member States, 
introducing further simplification for grants by allowing simplified costs, 
providing better information on financ ial corrections and recoveries, and 
presenting concrete proposals for a tolerable level of error in all expenditure areas. 
The Commission is looking forward to a fr uitful cooperation with the Legislative 
Authority in order to achieve progress on these proposals. 
 
EN 10   EN Chapter 3 - Budgetary Management 
10. (Council Doc. 5826/10 ADD 1, 1st and 2nd paragraphs, page 16) - The Council 
notes that the implementation level of the 2008 budget is sim ilar to the spending 
rates in 2007. However, the Council expects the impact of amending budgets in the 
implementation rate to appear more clearly in order to give a more accurate picture. 
Moreover, transparency, c onsistency and comparability of the information on 
implementation and surplus should be improved by reconciling the figures 
mentioned in the different documents. Th e Council considers it appropriate to 
present all information needed to calcul ate different implementation rates throughout 
the whole budgetary procedure, from th e draft budget presented by the Commission 
to the final authorised appropriations. 
 The Council reiterates th at over-budgeting has to be avoided and insists that a 
realistic budgeting from the stage of the draft budget presented by the Commission 
onwards remains an essential element of good budgetary management. However, it shares the Court's statement that reduc ing appropriations for payments through 
amending budgets represents good financial management by adjusting to changes and reducing the budgetary surplus. 
Commission's response:
 
The Commission has taken the recommended action. 
The comparison of implementation rates calculated from initial budget and from 
the final budget per Financial Framew ork Chapter has been transparently 
presented in the Report on budgetary  and financial management 2009, pp. 23-24. 
The end-year cut of payment appropria tions in 2009 did not concern Cohesion 
contrary to previous years, which shows rea listic budgeting in this important field. 
As to the consistency and comparability of  implementation reports and the surplus, 
it has to be noted that the surplus calculation cannot be read as a report on actual 
implementation. It is an accounting exerci se with the sole obj ective of calculating 
the amount to be returned to the Me mber States (budget outturn) from 
appropriations which include all revenue and all expenditure, even third party 
appropriations. Therefore the calculat ion remains very technical requiring 
complicated explanations which the Co mmission already gives to the Budget 
authority in the context of th e relevant amending budget. 
11. (Council Doc. 5826/10 ADD 1,  4th paragraph, page 16) - The Council calls on the 
Commission to encourage Member States to transmit the remaining compliance assessment documents of the Management and Control Systems as soon as possible, as well as to pursue its efforts to achieve progress in the compliance assessment procedure. 
Commission's response:
 
The Commission is taking  the recommended action.  As of 01/10/2010, it had 
accepted compliance assessmen t reports for 98,4% of the ERDF and 99,1% of the 
 
EN 11   EN ESF programmes. It had al so accepted 99,7% of ERDF and 100% of ESF audit 
strategies. The exercise is therefore movi ng to its end and th e Commission expects 
it to be concluded before the end of 2010. 
12. (Council Doc. 5826/10 ADD 1, 5th paragraph, page 17) - The Council welcomes the 
improvement of the accuracy of Member Stat es' expenditure forecasts in the area of 
Structural Funds, notably for the 2000-2006 period. It encourages  the Commission 
and the Member States to continue thei r efforts concerning th e 2007-2013 period, in 
order to reduce the over-estimation rate. 
Commission's response:  
The Commission is taking the requested action. For 2009, the overall forecasting 
overestimation was 12% for the 2007-2013 period. The situa tion varies widely from 
one Member State to another. The 12% o verestimation is to be considered as an 
improvement as compared to the 2008 figu re (27%). The Commission will continue 
its efforts to improve Member States' expenditure forecasts. 
 
EN 12   EN Chapter 4 - Revenue 
13. (Council Doc. 5826/10 ADD 1, §1, 2nd paragraph, page 18) - Considering the 
complexity of most cases of post-clearance recovery of customs duties, as well as the 
fact that many B-accounts are often kept by local customs offices, the examinations 
regularly performed by the Commission and the guidelines issued in December 2007 
are a useful response to the need to incr ease the awareness of using these accounts 
appropriately. Therefore, the Commissi on should continue its surveillance and 
guidance activities in order to  ensure the correct establis hment and recovery of duties 
taking into due consideration this complexity. 
Commission's response:  
Then Commission will continue to verify that Member States correctly maintain 
these accounts. Any weaknesses found will be addressed with the relevant Member 
States and any necessary guidance given . Where appropriate measures will be 
taken to recover any amounts of own resources or interest due. 
14. (Council Doc. 5826/10 ADD 1, §2, 2nd paragraph, page 19) - The Commission 
should continue its pro- active approach aiming at  managing long-standing 
reservations, which should re sult in significant progress in  2009, in order to speed up 
the lifting of VAT reservations. 
Commission's response:  
By the end of 2009 twelve of the thirty four long outstanding reservations had been 
lifted and action was underway to resolve at least a further four. Action was also 
taken to reduce the overall age of the reservation population: at the end of 2009 
over 70% of the reservations  in place had been set in either 2009 itself or during 
the preceding two years. 
15. (Council Doc. 5826/10 ADD 1, §3, 1st paragraph, page 19) - The Council, 
welcoming the fact that a very considerab le number of reservations related to GNI 
data were lifted in 2008 and 2009, encourages  the Commission to continue its efforts 
to further improve the documentation of  the checks that it performs on the 
reservations. 
Commission's response:  
The Commission is taking the requested action. The Commission is continuing its 
efforts to improve the documentation of th e checks that it performs on the GNI 
reservations. 
 
EN 13   EN Chapter 5 - Agriculture and Natural Resources 
16. (Council Doc. 5826/10 ADD 1, 4th paragraph, page 20) - The Council encourages 
the Commission and the Member States to co ntinue addressing the weaknesses of the 
systems, most of which the Court assessed as  partially effective, so that the positive 
trend observed persists in the present and in future years. 
Commission's response:  
The Commission is taking  the requested action. 
The constant improvement of the IACS is confirmed by the results of the 
conformity audits which the Commission ha s carried out over the past years in all 
Member States but Luxembourg as well as by the low error rate indicated in the 
control statistics which it receives from Member States and which to a large extent 
are verified and validated by  the certification bodies. 
The Commission found that for claim year 2008 , significant deficiencies existed in 
the IACS in Bulgaria and Romania. As a result these two Member States 
established action plans in 2009 which have been closely followed by the 
Commission. Since, however, the completion of  these action plans is only foreseen 
for 2011 and there are already some delays in the implementation of the individual 
actions, the Director-General of DG AGRI  made a reservation for the IACS in 
Bulgaria and Romania in his 2009 a nnual activity report,  based on the 
reputational risk for the Commission. 
Other Member States have deficiencies of a lesser nature in their IACS which do 
not render their systems ineffective but, rather, perfectible. Also these Member 
States have taken or are taking acti on to resolve their deficiencies. 
All these deficiencies are followed up through conformity clearance procedures 
which ensure that the risk to th e EU budget is adequately covered. 
With regard to rural development supervis ory and control systems, the weaknesses 
in Bulgaria and Romania are due to the deficiencies in the IACS, for which a 
reservation is included in the Direct orate-General for Agriculture and Rural 
Development's Annual Activity Report for 2009. 
The control systems for the other six Memb er States audited by the Commission in 
2009 was found to be effective. 
However, there is scope for improve ment for the following items: 
- Respect of general guidelines set ou t in the working document regarding agri-
environment commitments and their verifia bility, which notably provides that 
several control tools need to  be used in combination. 
- Continued efforts are required to provide simple and clear eligibility criteria and 
to inform beneficiaries about their obligat ions in a clear and unequivocal manner. 
 
EN 14   EN - Application of exhaustive administrative controls, in particular as regards agri-
environmental measures. 
- Improvement of quality of control reports to permit better traceability and clear 
conclusions of the controls carried out. 
17. (Council Doc. 5826/10 ADD 1, § 1, 2nd & 3rd paragraphs, page 21) - With a view 
to addressing specific defici encies, particularly within  the SPS and SAPS schemes, 
the Council considers that close coope ration between the Commission and the 
Member States is crucial. The reliabil ity of databases and the correctness of 
administrative procedures will be enhanced mainly by providing implementing entities and beneficiaries with clear and simp le guidelines, particularly in relation to 
eligibility conditions. 
 Moreover, the Council is of the opinion that a consistent interpreta tion of the rules in 
force and a coordinated approach between  the Commission and the Court are key 
tools for improving the controls' effectiven ess and, at the same time, maximising 
their efficiency. 
Commission's response:
 
The requested action has been taken. 
The Commission is on a continuing basis cooperating with the Member States to 
improve the SPS and SAPS schemes. In relation to eligibility of areas for the 
schemes in question an extensive round of exchange of vi ews between Member 
States and the Commission se rvices has taken place during 4 meetings of the 
Management Committee for direct pay ments from December 2009 to March 2010. 
These exchanges of views based on curre nt experiences covered and clarified 
various aspects related to the rules governing eligibility of areas for payment. 
Furthermore, the documents prepared by the Commission services in this context 
gave an overview of the legislation in fo rce and provided in particular a state of 
play of the implementation in the Member  States. This covered good practices and 
showed that the scope of the elements of the implementation which in some 
Member States are more challenging is limited. Possible remedies to more 
challenging elements were also discussed. 
The Commission is in constant contact w ith both the Court and the Member States 
and, in this context, puts great emph asis on the need for a harmonised 
interpretation and application of the EU  rules regarding the management and 
control of agricultural expenditure. 
18. (Council Doc. 5826/10 ADD 1, §2, 3rd paragraph, page 22) - With respect to the 
method of calculating conformity adjustme nts, the Council asks the Commission to 
base the recoveries, to the maximum po ssible extent, on the actual amounts of the 
irregular payments subject to appropriate informati on being provided by Member 
States, reserving the applic ation of flat-rate correcti ons to exceptional cases. 
Commission's response:  
The requested action has been taken. 
 
EN 15   EN Financial corrections are determined on th e basis of the nature and gravity of the 
infringement and the financial damage  caused to the EU. The amount is 
calculated on the basis of the loss actually caused or on the basis of an 
extrapolation. Where this is not possible, flat-rates are used which take account of 
the severity of the deficiencies in the natio nal control systems in order to reflect the 
financial risk for the EU. As agricultural expenditure is implemented under shared 
management, the Member States are better placed than the Commission to assess 
and provide evidence of the real financial loss or risk for the EU budget. A more 
precise calculation of the financial loss for the EU budget ther efore requires the 
active co-operation of the Member State co ncerned at all levels of the conformity 
clearance procedure because only the Member State has all the necessary 
information to make such a calculation. This  is also reflected in the wording of the 
request itself. 
It should be noted in this context that  in December 2009, th e Commission has set 
out to Member States the conditions under which it is prepared to limit the amount 
of any financial correction to the error ra te found by the Member States in the 
transactions at final beneficiary level and reported in its control statistics for the 
aid scheme concerned. These conditions are part of a system by which Member 
States can, from 2010, reinforce the o verall framework for gaining reasonable 
assurance on the legality and regularity of transactions at the level of final 
beneficiaries. To this end, the certificatio n bodies should extend their work beyond 
the present requirements by fully reperforming, for a given expenditure 
population, a representative sample of tr ansactions which th e paying agency in 
question has checked on the spot. The work  would cover the entire handling of the 
file, from receipt of the aid application to the calculation and execution of the final 
payment. 
Since the reform of the system in 1996, a flat-rate was used in only 45% of all 
cases with a financial correction. If the last  ten conformity decisions are taken, this 
percentage drops further to 37%. This demonstrates the Commission's continuous 
effort to limit the use of flat -rates as much as possible. 
19. (Council Doc. 5826/10 ADD 1, § 3, 4th paragraph, page 22) - Further efforts still 
need to be made and simplification remains a priority. 
 Therefore, the Council welcomes the a dditional guidance that the Commission has 
been providing to Member States on how to  implement agri-environmental measures, 
but keeps on calling for concrete, streamlined and practical tools to be supplied at the 
beneficiaries' level, such as user-friendly standard forms and timetables, in order to 
improve the common interpretation of ru les, prevent errors and improve the 
effectiveness of the financial aid. 
Commission's response:  
The Commission is taking  the requested action. 
Rural development measures, and notably agri-environmental ones, are 
characterised by more demanding eligibil ity criteria compared to direct payment 
schemes. The resulting complexity is kn own and accepted as a condition to achieve 
 
EN 16   EN the overall objective of providing environm ental benefits and public goods through 
these aid schemes. 
Nevertheless, there is scope for some si mplification of the agri-environmental 
measures. The Commission has taken several measures to simplify existing rules 
and to ensure effective and efficient imple mentation of the control rules in rural 
development. In particular Commission  Regulation (EC) 1975/2006 has for the 
first time established a comprehensive an d transparent legal control framework for 
rural development. Furthermore, the Commission has established in 2007 a final 
version of a guidance note providing gu idelines and additional explanations for 
the implementation of agri-environmental measures. Best practices of 
controllability of agri-environmental measures are regularly discussed in the Rural 
Development Committee. Finally, the Commissi on has enhanced its audit activities 
in this area. 
Commission Regulation (EC) 1975/2006 will be recast during 2010 in order to 
simplify and clarify certain rules. In  addition, as part of DG AGRI 2010 annual 
audit work programme, a task force has been set up to follow up the high error 
rate reported by certain Member States in 2009 for rural development measures 
under axis 2. 
However, it should be noted that rural development programmes are implemented 
under shared management and that the Co mmunity legislation only provides the 
general legal framework. It is up to the Member States to de fine the application 
procedures and tools to be used. 
20. (Council Doc. 5826/10 ADD 1, § 4,  1st & 2nd paragraphs, page 23) - The Council 
emphasises the importance of continuing to  improve the functio ning of the control 
strategy of Environment, Fisheries,  Health and Consumer protection. 
 Thorough ex-post audits are essential for de tecting errors and to  provide a basis for 
all necessary financial corrections, but also  to determine the origin of the most 
recurrent errors in order to tailor preventive measures. 
Commission's response:  
DG ENV expects to reach its objective of mo re than 30 ex-post audit reports issued 
in 2010. On 30 June 2010 23 reports have already been issued. The ex-post 
methodology and audit plan will also be revised for 2011 in order to optimise 
controls. 
DG MARE, given the various ma nagement modes it has to  operate, has established 
a framework audit strategy for the programmes under shared management. This 
strategy reflects the overall objective to  be achieved through a specific annual 
audit plan. The audit plan fo r 2010 foresees 14 audit as signments on the effective 
functioning of the management and co ntrol systems and the quality of the 
Compliance exercise. The result of this aud it activity with the consolidation of the 
information obtained from other sources su ch as national audit reports, annual 
control reports and opinion, results from  other Structural Funds DGs on common 
authorities, are forming a solid audit en vironment for preventing and detecting 
errors. As regards the expenditure under di rect management, an annual audit plan 
 
EN 17   EN is established based on a risk analysis to adequately cover risks identified from 
previous years' audit activity. The audit pl an for 2010 foresees 7 audit assignments 
covering the four main activ ities under direct manageme nt. Audit results of 2008 
and 2009 allowed the DG to determine the origin of errors and to tackle them 
through specific actions plans with preventing and correcting measures 
implemented or being implemented. 
As for DG SANCO, in 2010 27 projects should  be audited representing more than 
20% of the concerned operational expe nditure and 5% of the number of 
transactions. These audits will be carried out partly by staff of DG SANCO and by 
an external audit company. 
In addition, whenever necessary, DG SANCO will also organise ex ante controls. 
 
EN 18   EN Chapter 6 - Cohesion 
21. (Council Doc. 5826/10 ADD 1, 1st & 3rd paragraphs of page 24) - The Council, 
being aware that again in 2008 at least 11% of the total amount reimbursed to 2000-2006 Cohesion policy projects should not have been reimbursed, urges the 
Commission and the Member States to re medy this situation without delay. The 
Council urges the Commission and the Member States to make quick adjustments as 
soon as problems become apparent, not ably following on-the-spot audits. 
Commission's response:
 
The Commission is taking the requested action. The error rate provided by the 
Court of Auditors on a yearly basis is th e result of an extrapolation based on its 
audit work conducted on a sample of transactions covering all Member States and 
all the funds under the Cohesion policy chapte r. It may not be directly translated in 
a financial amount to be reimbursed. 
The Impact Report to the 2008 Action Pl an (COM(2010)52) shows that the 
Commission has improved its supervisory role, focusing on a series of actions that 
will bring the error rate down in the mi ddle and long term. The Commission knows 
the main types and concentration of errors and it is taking action to address them. 
The Commission's supervisory work is concentrated on areas and countries which 
present the most significant weaknesses. It  is focusing its efforts on correcting 
errors from the 2000-2006 period  as soon as they arise and in any event before 
closure. For the 2007-2013 period the Co mmission has focused on preventive 
action, such as the approval of the complia nce assessments and th e national audits 
strategies of the Member States. Audit results on the implementation 2007-2013 
programmes show a clear decrease of the estimated error rate. The audit work of 
the Structural Funds DGs is outlined in the Joint Audit Strategy for structural 
actions. 
22. (Council Doc. 5826/10 ADD 1, §1, 1st paragraph, page 24) - The Council notes the 
Court's findings that a major part of the estim ated error rate is related to eligibility 
errors, such as conditions not met, failure to respect procurement rules and inclusion 
of non-reimbursable costs. The Council shar es the Court's recommendation that the 
Commission should focus the guidance given to the Member States on this most 
frequent type of errors. 
Commission's response:  
The Commission is taking the requested action. It considers appropriate training 
for national authorities of utmost importan ce in the context of shared management 
of the structural funds. Since the beginni ng of the current programming period the 
Commission has provided regular and early training and guidance to the 
competent authorities in th e Member States. Specific tr aining actions were also 
foreseen in the Commission Actio n Plan adopted in February 2008 
(COM(2008)97) in that regard and ar e carried out on a regular basis. 
23. (Council Doc. 5826/10 ADD 1, §1, 2nd paragraph, page 25) - The Council 
welcomes the fact that the Commission performs its supervisory role not only 
 
EN 19   EN through its audit activity, but also th rough programme negotiations, monitoring 
committees, meetings with managing and audi t authorities, guidance and seminars. It 
encourages the Commission to continue its e fforts. Exchange of best practices and 
spreading of information have to be deve loped or further improved, and single points 
of contact could be created to promote th e uniform interpretati on of the procedures. 
Commission's response:  
The Commission is taking the requested action. It considers appropriate training 
for national authorities of utmost importan ce in the context of shared management 
of the structural funds. Since the beginni ng of the current programming period the 
Commission has provided regular and early training and guidance to the 
competent authorities in th e Member States. Specific tr aining actions were also 
foreseen in the Commission Actio n Plan adopted in February 2008 
(COM(2008)97) in that regard and ar e carried out on a regular basis. 
24. (Council Doc. 5826/10 ADD 1, § 1, 2nd paragraph of page 25) - The Council 
encourages the Commission, in cooperati on with the Member States, to make 
concrete proposals aiming at further simplification of pro cedures, and to continue its 
efforts notably concerning simplified cost calculations. 
Commission's response:  
The Commission is taking the requested ac tion. It fully agrees and has already 
taken steps in order to translate in conc rete action this recommendation. In 2008, 
the Commission set up a Task Force at  Commission level between DG REGIO and 
DG EMPL, with the aim to id entify specific measures to  be adopted at legislative 
and non-legislative level in order to facili tate the financial flows to beneficiaries 
and simplify the implementation of interven tions, while ensuring the EU financial 
interests. This Task Force had several re flections and discussions with an Expert 
Group on Simplification, composed by national experts from managing 
authorities, certifying author ities and audit authorities  in the Member States. 
Several of the proposals disc ussed within the Task For ce and the Expert Group are 
reflected in the three modi fications of the General re gulation, the amendment of 
ESF and ERDF regulations as well as the amendment of the Commission's 
implementing regulation. For simplified co sts, which have a clear added-value in 
terms of implementation and controls, the adoption of the Commission guidelines 
on 28 January 2010 is expected to facilitate  Member States' use of these options. 
In parallel, the Commission services are providing their ex-ante assessment on 
national proposals for the calculation of indirect costs on a flat-rate basis, 
trainings and, if needed, assistance to national authorities. 
Simplification of the regulatory framew ork comes to an end but the Commission 
will pursue this objective. After the last se t of simplifying legislative measures was 
adopted by the Parliament in 2010, the Commission intends to pursue its 
simplification efforts by discussing with Member States on further simplification 
through practical working arrangements. 
25. (Council Doc. 5826/10 ADD 1, §2, 2nd paragraph, page 25) - The Council stresses 
the key role of Member States and Comm ission in improving financial management 
of EU funds under shared management and under the relevant legislation. 
 
EN 20   EN Commission's response:  
The Commission agrees to the statement of the Council and is taking the 
recommended action. Annual summaries  can be a means for improving 
accountability in shared management if it s guidelines are followed by Member 
States. The Commission revised its gui dance on annual summaries and presented 
it to Member States in October and December 2009, taking into account 
recommendations of the study commissioned  by the European Parliament, such as 
emphasizing the value-added elements and reducing redundant information. The 
triennial revision of the Financial Regu lation in 2010 – on which the Parliament 
will be involved by Co-decision procedur e - could provide an opportunity for this. 
Moreover, in accordance with the single  audit model (in which each level of 
control builds on the preceding one), article 73 of the Regulation n°1083/2006 
foresees an enhanced cooperation between the Commission and the audit 
authorities of the Member States. 
The Commission is also taking steps to provide appropriate training for national 
authorities in the context of shared manage ment of the structur al funds. Since the 
beginning of the current programming period the Commission has provided 
regular and early training and guidance to the competent au thorities in the 
Member States and will continue doing so. 
26. (Council Doc. 5826/10 ADD 1, §2, 3rd paragraph, page 26) - The Council notes that 
the system for reporting has been clarif ied and strengthened for the period 2007-2013 
and that the Commission is maintaining its efforts to improve the reporting. It urges the Member States to continue their action and encourages the Commission to 
maintain its efforts in order to obta in reliable and complete information. 
Commission's response:
 
The Commission is taking the requested action. It considers that the data on 
financial corrections for 2009 submitted by  the Member States to the Commission 
in the 1st half of 2010 are of better qualit y than in previous years. These data are 
published in the Commission's final annual accounts. In the framework of its 2008 
Action Plan the Commission has carried ou t audits of Member States' systems for 
withdrawals and recoveries in 19 Member  States. The remaining Member States 
will be audited in 2010. 
For the 2007-2013 period, there is a standar dised procedure for submission of 
recovery statements through the IT syst em SFC2007. The Commission expects that 
this reporting procedure will improve the qu ality of information at its disposal. 
Member States are also required to distin guish corrections deriving from their own 
controls and those from EU audits. 
27. (Council Doc. 5826/10 ADD 1, §3, 2nd paragraph, page 26) - The Council expects 
the Commission to maintain its efforts, in cooperation with Member States to further 
improve recovery procedures and repor ting relating to the 2000-2006 programmes. 
However, the Council recalls that the final objective is not to increase the amount of 
corrections but to maximise the correct use of the funds. 
 
EN 21   EN Commission's response:  
The Commission is taking the requested action. It considers that the data on 
financial corrections for 2009 submitted by  the Member States to the Commission 
in the 1st half of 2010 are of much bette r quality than in previous years. These 
data are published in the Commission's fi nal annual accounts. In the framework 
of its 2008 Action Plan the Commission has carried out audits of Member States' 
systems for withdrawals and recoveries in 19 Member States. The remaining 
Member States will be audited in 2010. 
 
EN 22   EN Chapter 7 - Research, Energy and Transport 
28. (Council Doc. 5826/10 ADD 1,  2nd paragraph, page 27) - The Council invites the 
Commission to pursue its efforts to reduce complexity and to ensure a rigorous and 
cost-effective application of controls, in particular aimi ng at improving the reliability 
of audit certificates, and through effective implementation of its ex-post audit 
strategy, imposing penalties where appropr iate, and making timely recoveries or 
adjustments in cases of undue reimbursement of claimed costs. 
Commission's response:  
The Commission has launched the Communication on simplifying the research 
framework programme (COM(2010)0187) to open a debate on a concrete set of 
proposals in order to reduce the complexity of rules as this is a major source of 
errors and ineligible costs claims. However , many of these proposals can only be 
implemented within the next framework programme. 
The Commission adopted on 26 May 2010 a Communication to the other 
Institutions proposing a level of tolerable ri sk of error in research of between 2% 
and 5% (COM(2010)0261). This level is esta blished taking into account the cost-
effectiveness of the controls and an accepta ble level of residual error justifiable in 
the light of these costs. 
In order to improve the quality of the au dit certificates in FP7 the Commission has 
taken remedial action. FP7 audit certi fication is based on "agreed upon 
procedures", which require the certify ing auditor to perform pre-defined 
procedures and report on that basis factua l findings. This approach should lead to 
a reduction in errors of interpretation of  the eligibility rule s by the auditors. 
The coverage of expenditure by ex-post au dits has continued to increase and the 
research DGs achieved the targeted number of audits for the year. The number of 
completed audits increased from 1 090 at  the end of 2008 to 1 911 at the end of 
2009. 
The Commission considerably increased th e recoveries of amounts due during 
2009. Nevertheless, additional efforts will be undertaken in order to improve the 
timely implementation of audit results. Th e Communication on the simplification 
of the recovery process adopted on 15 December 2009 (SEC(2009)1720) provides 
measures in that sense in partic ular for cases of extrapolation. 
The Commission took action during 2009 as regards imposing financial penalties. 
In this respect, by the en d of 2009, the Commission had imposed penalties in 34 
cases, amounting to € 514 330. 
29. (Council Doc. 5826/10 ADD 1, §2, 1st paragraph, page 28) - The Council invites the 
Commission to continue to provide s upport and guidance to beneficiaries and 
certifying auditors in  the context of FP7. 
 
EN 23   EN Commission's response:  
To further simplify the audit certif ication procedures, the Commission has 
reformed the audit certification system  under FP7 with the introduction of : 
(1) audit certification based on "agreed  upon procedures" which consist of a 
compulsory set of procedures to be used  by certifying auditors; auditors are no 
longer requested to provide an assura nce opinion but to perform a set of 
procedures in order to provide an inde pendent report on factual findings, which 
will be the basis tor the Commission to a ssess the eligibility of costs and/or the 
methodology. 
(2) optional cost calculation methodology  certification for beneficiaries with 
multiple participations in order to prevent typical methodological errors. These 
measures are expected to ensure th at, before payments are authorised, 
beneficiaries' costing methodologies better comply with the contractual provisions. 
The Commission has implemented measures to  reinforce the effe ctiveness of audit 
certificates by improving support to certi fying entities partici pating in workshops 
and training courses, beneficiaries and operational services within the 
Commission. Exhaustive Guidance Notes for Auditors and Beneficiaries on 
certificates issued by external auditors are available on CORDIS and regularly 
updated with the feedback from users. 
Finally, the Commission's information approac h is largely based on publication of 
guidance and information through CORDIS , the functioning of the "Research 
Enquiry Service" and the role of National Contact points. 
30. (Council Doc. 5826/10 ADD 1, §2, 2nd paragraph, page 28) - In the context of the 
preparation of the Eight Framework Pr ogramme for research and technological 
development (FP8), special attention shoul d also be paid to work concerning the 
simplification of the funding rules, while securing the effectiveness of control systems. 
Commission's response:
 
In particular in view of the next Rese arch framework programme, the Commission 
has recently issued two Communications "Simplifying the Implementation of the 
Research Framework Programmes" (COM(2010)0187) and "More or less 
controls? Striking the right balance between  the administrative costs of control and 
the risk of error" (COM(2010)0261). 
In the first Communication, the Commission  addresses (and open a debate on) the 
problems caused by complex eligibility an d funding rules for grant beneficiaries. 
In the later, the Commission proposes a level of tolerable risk of error in the 
research area between 2% and 5%. This level  is established taking into account the 
cost-effectiveness of controls and an acceptable level of re sidual error justifiable in 
the light of these costs. 
 
EN 24   EN Detailed discussions will take place during  the establishment of the legislative 
framework for FP8. 
31. (Council Doc. 5826/10 ADD 1, §2, 3rd paragraph, page 28) - The Council stresses 
the need to ensure sufficient coordina tion within the Comm ission, especially 
concerning the follow-up of audit results. 
Commission's response:  
The audit reports' findings (issued either  by the Commission services or by the 
Court of Auditors) are followed up by each DG. Their implementation from the 
audit report till the offsetting  in the next payment to the same beneficiary (or till 
their recovery through a recovery order)  is constantly monitored and reported. 
Moreover, in case the beneficiary is re-sel ected for audit, the respective external 
auditors prepare the audit taking into acco unt the results of previous audit reports. 
The research family DGs have regular mee tings on these issues co-ordinating 
questions of eligibility. A Wiki site wh ere audit reports from all DG's of the 
Research family are up-loaded has been established to exchange information on 
individual audit results. 
32. (Council Doc. 5826/10 ADD 1, §2, 4th paragraph, page 28) - The Council wishes to 
recall the content of its r ecommendation on the discharge for 2007 where it called for 
a more effective use of the available sanction mechanisms, which should be used as an incentive for beneficiaries to improve  the quality of their cost statements.   
Commission's response:
 
Further to the observations from the Co urt and the Council, the Commission took 
further action during 2009 and applied liquidated damages. By the end of 2009, 
the Commission had imposed penalties in 34 cases, amounting to € 514 330.  
 
EN 25   EN Chapter 8 - External aid, Development and Enlargement 
33. (Council Doc. 5826/10 ADD 1, 5th paragraph, page 29) - The Council notes with 
concern the Court's statement that audit reports and supporting documents on projects implemented by UN agencies are difficult to receive and invites the Commission to continue to improve the re lations between UN agencies and the EU 
in this respect. 
Commission's response:
 
The Commission fully supports the Court’s requests to obtain necessary supporting 
evidence from UN organisations, and this pr inciple is clearly stipulated in the 
FAFA. As soon as the Court informs it of difficulties encountered in this respect, 
the Commission does its best to ensure that its counterparts at the UN find a 
solution, and that the Cour t receives the information it needs. The adoption, in 
April 2009, of standard terms of reference for verification missions has improved 
the cooperation between UN age ncies and the EU, and has helped to ensure that 
the UN co-operates more efficiently with the Court. The Commission continues to 
work to improve the system, and it agr eed with the UN in April 2010 that 
additional information, including extracts fr om internal and external audit reports, 
could be made available on request. 
34. (Council Doc. 5826/10 ADD 1, §1, 1st paragraph, page 30) - The Council invites the 
Commission to continue adopting measures  to improve the effectiveness of the 
Commission's ex-ante control system for payments and contracts in DG AIDCO and 
DG RELEX. 
Commission's response:  
Both EuropeAid and DG RELEX will contin ue to improve their supervisory and 
control systems with regard to the Council's request and the Court's 
recommendations. 
35. (Council Doc. 5826/10 ADD 1, §1, 1st paragraph, page 30) - The Council asks the 
Commission to continue to strengthen th e support provided to the organisations 
implementing EU-funded projects and to monitor them more closely. 
Commission's response:  
The Commission is finalising a 'Financial Management Toolkit' for organisations 
implementing EU funded projects  under EuropeAid's portfolio. 
36. (Council Doc. 5826/10 ADD 1, §1, 2nd paragraph, page 30) - The Council notes the 
shortcomings relating to ex-post cont rols and weaknesses in the financial 
management and supervision of financial information of the projects in DG RELEX 
and invites the Commission to ensure that audits and ex-post controls are planned 
realistically and are followed up closely. The Council also recalls the importance of 
proper documentation and systematic analyses of the results of th e audits and ex-post 
controls. 
 
EN 26   EN Commission's response:  
The Commission already took measures in 2009 to addr ess the recommendations 
of the Court of Auditors regarding ex pos t controls in DG Relex and the Court has 
recognised progress made in 2009. DG Relex has continued with a revision of its 
ex post control working methods and is fully aware of the needs for proper 
documentation, systematic analyses of resu lts and for a follow-up of the respective 
reports. 
37. (Council Doc. 5826/10 ADD 1,  §2, 2nd paragraph, page 30) - As regards the budget 
support payments, the Council recalls the wea knesses in the proce ss of verifying the 
fulfilment of the payment conditions a nd counts on the Commission to continue 
promoting awareness of the need for a more structured and formal approach in the assessment of budget support payments and strengthening verification in this area. 
Commission's response:
 
The Commission has already taken some conc rete steps in order to improve such 
an approach and is constantly engaging in improvements of its Budget Support 
modus operandi and will continue to do so. In particular, the Commission is 
updating and improving its Guidelines on Budget Support taking particular care in 
the issues pointed by Council. 
38. (Council Doc. 5826/10 ADD 1, §3, 1st paragraph, page 31) - The Council welcomes 
the improvements in the use of external audits in DG AIDCO's internal control framework and invites the Commission to pay special attention to its risk 
management process as a complement to th e improvements already made in the audit 
methodology and other recent reforms. 
Commission's response:
 
EuropeAid's risk management methodology  has been completely checked and 
reinitialised in 2010. 
39. (Council Doc. 5826/10 ADD 1, §3, 2nd paragraph, page 31) - The Council points 
out that weaknesses persist in the a udit planning, in the audit module Common 
RELEX Information System (CRIS) and in th e monitoring of the audit results. It 
notes that the Commission has engaged itself to improve audit planning in a realistic 
way. The Council welcomes the work already done to substantially revise the audit 
methodology, making use of audit planning, and th e increase in the number of audits 
completed. It invites the Commission to pursu e its efforts and expects that the recent 
compulsory use of CRIS, together with the system created to analyse the audit 
results, contribute efficiently  to reducing the weaknesses. 
Commission's response:  
EuropeAid has in the meantime implemen ted further significant improvements to 
the audit methodology and IT tools and we lcomes the recognition of the Court of 
Auditors on the substantial progress made  in particular in relation to audit 
planning for 2010. 
 
EN 27   EN Chapter 9 - Education and Citizenship 
40. (Council Doc. 5826/10 ADD 1, 3rd paragraph, page 32) - The Council notes with 
satisfaction the measures taken by the Co mmission to simplify the rules including the 
vast introduction of lump sum paymen ts, which corresponds to the Council's 
recommendation on the discharge for 2007, a nd invites the Commission to pursue all 
possible actions of simplification. 
Commission's response:  
The Commission actively explores and imp lements possible simplification actions 
and activities. 
For instance, new electronic forms have been introduced in 2009/2010 for the 
Lifelong learning Programme with great simplification and precision 
enhancements. 
As far as the Youth in Action programme is concerned, 82% of the funds allocated 
to Youth in Action will be managed on th e basis of lumps sums and scales of unit 
cost in 2011; only a limited share of the programme will remain outside this 
funding approach, due to the very nature  of the activities concerned (more 
experimental projects, partnersh ips...). It is estimated that  all activities likely to be 
supported through lumps sums and scales of unit cost are now managed in this 
way. 
41. (Council Doc. 5826/10 ADD 1, §1, 2nd paragraph, page 33) - While welcoming the 
fact that the Commission ha s refined the control objectiv es by setting those for the 
primary controls in a specific guide cons tituting an integral part of the single 
agreement between the Commission and the national agencies and by updating the 
guidelines relating to secondary  controls for national aut horities, the Council invites 
the Commission to complete the latter  by developing the guidance further and 
making it more prescriptive as recommended by the Court. 
Commission's response:  
The Commission has taken the requested action. As a follow-up to the Court's 
recommendations, updated guidance was sent  to the National Authorities on 18 
December 2009. 
42. (Council Doc. 5826/10 ADD 1, §1, 5th paragraph, page 33) - The Council 
recommends the Commission to involve itself in a closer supervision of the annual ex post declarations process, with mo re thorough monitoring visits and direct 
verification if the cont rols described are adeq uate and fully applied. 
Commission's response:
 
In line with its Strategic Supervision Po licy, DG EAC has already reinforced the 
on-the-spot visits that fo cus on the existence and implementation of management 
procedures and checks as described by Member States. The 2010 audit plan will 
continue in this perspective. 
 
EN 28   EN Chapter 10 - Economic and Financial Affairs 
43. (Council Doc. 5826/10 ADD 1, 3rd paragraph, page 35) - The Council encourages 
the Commission to continue its approac h, more particularly for the research 
programmes, by intensifying actions aimed at  informing beneficiaries and certifying 
auditors about recurrent errors, as well as guiding their correct application of the rules governing the elig ibility of costs. 
Commission's response:
 
To further simplify the audit certif ication procedures, the Commission has 
reformed the audit certification system  under FP7 with the introduction of : 
(1) audit certification based on "agreed  upon procedures" which consist of a 
compulsory set of procedures to be used  by certifying auditors; auditors are no 
longer requested to provide an assura nce opinion but to perform a set of 
procedures in order to provide an inde pendent report on factual findings, which 
will be the basis for the Commission to asse ss the eligibility of costs and/or the 
methodology. 
(2) optional cost calculation methodology  certification for beneficiaries with 
multiple participations in order to prevent typical methodological errors. These 
measures are expected to ensure th at, before payments are authorised, 
beneficiaries' costing methodologies better comply with the contractual provisions. 
The Commission has implemented measures to  reinforce the effe ctiveness of audit 
certificates by improving support to certi fying entities partici pating in workshops 
and training courses, beneficiaries and operational services within the 
Commission. Exhaustive Guidance Notes for Auditors and Beneficiaries on 
certificates issued by external auditors are available on CORDIS and regularly 
updated with the feedback from users. Finally, the Commission's information 
approach is largely based on publication of guidance and information through 
CORDIS, the functioning of the "Researc h Enquiry Service" and the role of 
National Contact points. 
44. (Council Doc. 5826/10 ADD 1, 5th paragraph, page 35) - While noting that actions 
have been taken to improve the quality of audit certificates for FP7, it insists on the importance of this instrument as a contri bution to prevention a nd early correction of 
errors and encourages the Commission to  increase its efforts for upgrading the 
certifying auditors' know-how and activ ely monitoring their performance. 
Commission's response:
 
The Commission established in close coll aboration with the European Federation 
of Accountants FAQ and FP7 guidance no tes for the beneficiaries and auditors 
involved in the audit certification. While participating in conferences and 
workshops to raise awareness on the FP 7 certification process, the Commission 
also launched in 2007 specific pages dedicate d to audit and certification policy on 
CORDIS. These services focus notably on lessons learnt from FP6 as well as FP7 
certification policy. FP7 prospective be neficiaries and certifying auditors can 
 
EN 29   EN easily retrieve audit supporting documen ts and can get support through the 
enquiry service established to deal  with requests on FP7 issues. 
The Commission's information-approach is  largely based on  publication of 
guidance and information through CORDIS , the functioning of the "Research 
Enquiry Service" and the role of the National Contact Points. 
 
EN 30   EN Chapter 11 - Administrative and other expenditure 
45. (Council Doc. 5826/10 ADD 1, §2, 2nd paragraph, page 36) - The Council is 
concerned with the various problems identified  by the Court in the functioning of the 
new Individual Rights Information System (IRIS) used to manage staff entitlements, including the calcula tion of salaries, implemente d by the PMO. The PMO should 
take all measures necessary to remedy thes e shortcomings, in order to avoid in the 
future the problems identified by the Court. 
Commission's response:
 
The Office for Administration and Paymen t of Individual En titlements (PMO) has 
already started the tests of the redeve loped modules for the management of 
individual entitlements. The extensive test programme elaborated takes into 
account the lessons drawn from past experience. 
46. (Council Doc. 5826/10 ADD 1, §2, 3rd paragraph, page 36) - The Council urges the 
PMO to correct the weaknesses identified by  the Court in the controls implemented 
to ensure that calculations concerning th e transfer of acquired pension rights are 
performed correctly, and that reimbursements  are correctly recove red in the event of 
erroneous calculations. The PMO is requested to  reinforce its internal controls in this 
field. 
Commission's response:  
The requested action has been taken. The Office for Administration and Payment 
of Individual Entitlements (PMO) has reinfor ced its internal control procedures to 
address the identified weaknesses. 
47. (Council Doc. 5826/10 ADD 1, §2, 4th paragraph, page 37) - The Commission 
should take duly into account the remarks made by the Court of Auditors when 
assessing the workings of th e pension scheme and fund for local staff at  Commission 
delegations. 
Commission's response:  
The recommendation has been taken into consideration. The necessary 
modification of the Staff Regulation is  part of the European External Action 
Service (EEAS) package and will be decided by the legislative authority. 
48. (Council Doc. 5826/10 ADD 1, §3, 4th paragraph, page 38) - The Council recalls 
that the Court also identified weaknesses in a large number of other agencies, 
relating in particular to their procuremen t and recruitment procedures. Being aware 
that such weaknesses are most frequently  observed during the st art-up phase of new 
agencies, the Council calls on  the Commission to intensify its assistance and support 
provided to agencies and to share its e xpertise with them to a larger extent. 
 
EN 31   EN Commission's response:  
The Commission continuously provides wi de-range assistance to agencies in 
several domains and particularly on budgetary, accounting, human resources, 
financial management, general management, and procurement, be it under a legal 
requirement or on a voluntary basis. Mo reover, the agencies are encouraged to 
sign service level agreement s with the Commission serv ices for support services. 
49. (Council Doc. 5826/10 ADD 1, §3, 5th paragraph, page 38) - The Commission and 
the agencies should appl y activity-based budgeting and management systems 
wherever possible, and to extend multiannual programming concepts. 
Commission's response:  
The Commission and the executive agencie s have already fully implemented those 
management systems' concepts. 
Concerning the regulatory agencies, due to their legal acts, the Commission can 
not impose the implementation of any man agement systems. Nevertheless, this 
issue is being discussed within the inte rinstitutional working group on regulatory 
agencies that will finalise its works by the end of 2011. 
50. (Council Doc. 5826/10 ADD 1, §3, 6th paragraph, page 38) - The Commission 
should continue to take the agencies' unused appropriations into account when 
establishing the draft budget for 2011, with the aim of bringing down the agencies' 
annual surpluses. The Commission should al so carefully check, and if necessary 
revise, the agencies requests for funds and pos ts with the aim of presenting a realistic 
budget proposal corresponding to the agencies' real needs. 
Commission's response:  
The Commission has taken the recommended action. 
Agency surpluses 2009 will be recovered as assigned revenue in 2010 and have 
been taken into account when calc ulating the EU contribution for 2011. 
The draft budget 2011 has been establis hed after a carefu l examination of 
agencies' requests for funds and human re sources based on the analysis of the 
implementation in 2009 and the evolu tion of establishment plans. 
This analysis is presented in the wo rking document of the Draft Budget 2011 
"Bodies set up by the Union and having  legal personality [COM (2010) 300 – May 
2010]. 
 
EN 32   EN Special Report No. 8/2008 "Is cross compliance an effective policy?" 
51. (Council Doc. 5826/10 ADD 2, Annex 1, 4th paragraph, page 3) - The Council 
invites both the Commission and the Member States to pursue their efforts towards 
this objective, bearing in mind the cost-benef it ratio, and in this context agrees that 
the effectiveness of cross compliance could be further improved. 
Commission's response:  
The Commission has taken the requested action. 
After its introduction in the CAP, significant efforts have been made to simplify 
cross-compliance and to ease the functioni ng of the system. Three clear examples 
are the Commission Report on cross compliance in 2007, the Health Check in 
2008 and the Simplification of the CAP in 2009. Each of these simplification steps 
led to amendments in the regulation on  the implementation of the control and 
sanction system. The Health Check also le d to the netting-out of non pertinent 
requirements. Moreover, working document s have been spread in order to clarify 
and facilitate the implementation of cros s compliance in Member States, including 
in particular a guidance document on the clarification of on-farm requirements 
issued in 2009. Furthermore, later in  2010 the Commission has adopted on 30 
September 2010 a legislative proposal modi fying Regulation (EC) n° 73/2009 for 
further simplification of cross complianc e by modifying the rules applicable to 
follow-up checks. 
 
EN 33   EN Special Report No. 9/2008 "The  effectiveness of EU support in the area of freedom, 
security and justice for Belarus, Moldova and Ukraine" 
52. (Council Doc. 5826/10 ADD 2, Annex 2, 4th paragraph, page 4) - The Council calls 
upon the Commission to continue to further improve the effectiveness of EU support 
in the area of freedom, security and justice, with a special focus on coherence between the available financial instrume nts and initiatives, and on coordination 
between donors. 
Commission's response:
 
The Commission considers that this  recommendation was implemented. 
Co-operation in the area of freedom s ecurity and justice is of paramount 
importance in neighbouring countries. The Commission is paying particular 
attention to improve its effectiveness by  strengthening the links between policy 
dialogue and co-operation, by more focused programming and better 
implementation. At policy level a wide network of sub-committees has been 
established and this allows continuous policy dialogue. At programming level, the 
recently concluded mid-term review had indentified the broad scope of co-
operation, the specific objectives and the e xpected results. At implementation level 
new instruments (Comprehensive institu tion building programmes, twinning) 
allow mobilising the right type of exper tise to support co-operation in this area. 
 
EN 34   EN Special Report No. 10/2008 "EC development assistance to health services in Sub 
Saharan Africa" 
53. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 2nd paragraph, page 8) - The 
Commission is invited to cons ider increasing its aid to the health sector during the 
tenth EDF mid-term review to support its commitment to the health MDGs; 
Commission's response:  
During the ongoing 10th EDF Mid-term  review exercise, the Commission has 
given particular attention to the MDGs and to its support in this respect. It is 
considering how to best invite countries to give more attention to their record in 
terms of MDGs, starting with a reinforced  attention to policy dialogue and quality 
of policies. Through direct in crease of focal sector suppor t (where health is a focal 
sector) or through general budget support,  the Commission is working toward an 
increase of its assistance to the hea lth sector, while fu lly respecting and 
strengthening ownership by partner countri es and division of labour with other 
donors. In the health sector, such support will be guided by the policy framework 
adopted during 2010 on "the EU role in Global Health (Comm unication and Staff 
Working Documents 31/03, Council conc lusions 10/05) which commits the 
Commission and also EU Member States to enhance the strengthening of health 
systems by adhering to the aid effecti veness commitments, and committing to the 
specific targets of two thirds of EU he alth aid through national programme-based 
approach, and 50% by using country systems. 
54. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 3rd paragraph, page 8) - The 
Commission is invited to continue impr oving the predictability of its funding 
provided through various instruments to en able countries to better secure the 
resources needed for their health sectors. 
Commission's response:  
The Commission launched MDG-Contracts in  8 countries (Burkina Faso, Ghana, 
Mali, Mozambique, Rwanda, Tanzania, Uganda, Zambia) during 2009, with total 
commitments amounting to €1,8bn or 50% of all GBS programmed during EDF10. 
MDG-Contracts provide longer term (6 year), more predictable commitments of 
budget support that enable gov ernments to plan their st rategies and budgets to 
achieve the MDGs with greater certai nty about future resource inflows. 
Indicators for the monitoring of the MDG contracts are health and education 
related. 
55. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 4th paragraph, page 8) - The 
Commission is invited to take into acc ount the Aid Effectiveness principles 
enshrined in the Paris Declaration and the AAA while respecting the EU Code of 
Conduct on Complementarity and Division of Labour. 
 
EN 35   EN Commission's response:  
The Commission has been at the forefron t of the aid effectiveness agenda since 
2005 and has actively contributed with the Member States to the adoption of the 
Paris Declaration (2005) and the Accr a Agenda for Action (2008). Since 2006, the 
EC has been applying the aid effectivenes s principles to all its development 
assistance programmes with a specific em phasis on promoting division of labour 
among donors in order to reduce aid fragmentation. 
56. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 5th paragraph, page 8) - The 
Commission is invited to monitor the EU  collective increase d support to health, 
based where possible on existing mechanisms. 
Commission's response:  
Concerning specifically the EC assistance to  the health services in Sub-Saharan 
Africa, the Commission has jointly design ed the new health programmes with the 
partner countries with the main objectives of closely supporting the 
implementation of the national health po licies, promoting national ownership. The 
Commission will monitor the EU collecti ve increased support to health; in its 
effort, the Commission will depend on th e cooperation with EU Member States. 
57. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 6th paragraph, page 8) - The 
Commission is invited to review  how its assistance to the he alth sector is distributed 
to ensure it is primarily directed to its policy priority of health systems support. 
Commission's response:  
The Commission and the Member States  have committed in the recently adopted 
Communication and Council Conclusions on the EU role in global health, to a 
greater support to health sy stems, as the basis of al l its support to  health and 
development. The main approach is by applying the aid effectiveness principles to 
the health sector (with clear commitments on 2/3 of support through national 
programme based approaches and 50% using country systems), an d to refer to the 
global compact principles of the Intern ational Health Partnership (IHP). An 
evaluation which is being defined at pres ent, and a project in monitoring EC/EU 
health support, will look at this distribu tion. Through its direct support to health as 
a focal or non sector (in 33 countries),  indirect through the budget and MDG 
contracts, and through its dialogue at th e IHP, the Global Fund and GAVI, the EC 
will continue to enhance the attention to health system support; the EC continues 
to widen its health support to comprehensi ve health plans. This will also require 
additional capacity in the assessment and in -depth dialogue at country level and 
provisions are being made towards that end. 
58. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 7th paragraph, page 8) - The 
Commission is invited to ensu re that each delegation has adequate health expertise 
either in the delegation or through rely ing on the resources of other in-country 
partners (particularly the Member States),  building on further c onsultations with the 
Member States and other global pa rtners on a division of labour. 
 
EN 36   EN Commission's response:  
In March 2009 the Commission took stock of the public health expertise at its 
delegations in Sub-Saharan Africa. At that time there were 13 public health 
specialists at 11 delegations. 
1/ Of the ten delegations with health as a focal sector or with significant activities 
in the health sector nine had health e xpertise. Eleven of th e 30 delegations which 
did not have health expertise drew, where necessary, on the expertise of the 
Member States and two of them drew  on the UN agencies (WHO, Unicef). 
2/ Of the 24 delegations providing General Budgetary Support (GBS), seven of 
them under "MDG contracts", five had public health expertise. The other 
delegations draw on the expertise of the Member States (e.g. the Memorandum of 
Understanding signed in December 2009 by the Delegation and the German 
Embassy in Tanzania) or collaborate with the national offices of the World Health 
Organisation (WHO) (11 EU delegations associated the WHO in the mid-term 
review of the 10th EDF). 
The Commission, as part of its work on  implementing the Communication on the 
EU role in Global Health, will continue  working with EU Member States to 
progress on the division of labour and a sh ared use of the EU expertise in health. 
59. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 8th paragraph, page 8) - The 
Commission is invited to ma ke more use of Sector B udget Support in the health 
sector and focus its General Budget Suppor t more on improving he alth services; SBS 
should be aligned with national sector policies. 
Commission's response:  
The Sector Policy Support Programmes (S PSPs) are the tool used by the 
Commission to support implementation of a sectoral policy. As far as possible, 
Sector Budget Support (SBS) is the prefe rred means of implementing a SPSP. In 
order to maximise the impact of General Budget Support (GBS) on social sectors, 
including health systems, the Commission's aim is to strengthen  the capacity of its 
services and coordinate policy discussion s so that they can contribute more 
effectively to following up the implementatio n of these sectoral policies. It does this 
in line with the Code of Co nduct on the complementarity and division of labour in 
the field of development. As is known, the financial assistance provided by a 
Budget Support cannot be assigned to a sp ecific sector. It helps boost the tax 
revenue of the beneficiary co untry and thus its capacity to  finance activities that it 
could not otherwise have undertaken w ithout this support. The Commission 
establishes the procedures and objecti ves through dialogue and a performance 
framework. Disbursement of th e variable tranches is in pa rt linked to achievement 
of the objectives. The current updating of the "Guidelines on the Programming, 
Design and Management of General Budget Support" provides an opportunity to 
extend to sectoral policies a dialogue th at is undoubtedly too much focused on 
indicators alone. 
60. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 9th paragraph, page 9) - The 
Commission is invited to continue to use projects, especially for support to policy 
 
EN 37   EN development and capacity building, pilot interventions and assistance to poorer 
regions, while ensuring they  contribute to development of sustainable financing 
mechanisms for the whole health system. 
Commission's response:  
Projects (as approaches or mean s of implementing a SPSP ) are often used by the 
Commission to deliver its development ai d (Declaration of Paris, Accra agenda, 
International Health Partnership). 
In addition, sectoral policies and the institutional capacity of the health sector can 
be developed by specific projects, or as part of sectoral approaches supported by 
the Commission through a SPSP (S ector Policy Support Programme) and 
implemented by a project, a common fu nd or Sector Budget Support. The 
Commission will continue to use projects wh ere relevant with a specific attention 
to sustainability. 
61. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 10th paragraph, page 9) - The 
Commission is invited to seek to clarif y its comparative advantages, inter alia 
increase health-related assistance to fr agile states and post-crisis countries. 
Commission's response:  
The EC has programmed support to health in 34 Developing Countries in the 
present programming cycle: Afghanistan, Algeria, Angola, Burundi, Central 
African Republic, Chad, Congo-Brazzaville , DRC, East Timor, Ecuador, Egypt, 
Georgia, Guatemala, Haiti, Honduras, In dia, Ivory Coast, Lesotho, Liberia, 
Malawi, Morocco, Moldova, Myanmar, Nigeria, Mozambique, Philippines, South 
Africa, Swaziland, Syria, Ukraine, Vietna m , Yemen, Zambia and Zimbabwe. Out 
of these 34 Developing Countries, 16 are among the LDCs (Least Developed 
Countries). 
62. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 11th paragraph, page 9) - The 
Commission is invited to continue and stre ngthen, together with the Member States, 
efforts to support and build the institutional and technical capacity  of the beneficiary 
countries in the preparation of Globa l Fund grant applications and in the 
implementation of Global Fund grant contract s, as well as to contribute to improved 
disbursement rates from the Global Fund and to ensure that it also effectively 
supports national health systems. 
Commission's response:  
In 2009 the Commission signed an Agr eement with the WH O to contribute 
€2 million for the implementation by UNAID S of the programme "Strengthening 
Country Capacity to Scale up towards Universal Access for HIV/AIDS Prevention, 
Care and Treatment through Enhanced  Implementation of National AIDS 
Responses including Global Fund Gran ts". The Commission also prepared 
guidelines for the European Union delegat ions called "For a strengthening of the 
partnership on a local scale between th e European Commission and the Global 
Fund to fight AIDS, Tuberculosis and Mala ria." These guidelines were sent to all 
the delegations in June 2009. 
 
EN 38   EN 63. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 12th paragraph, page 9) - The 
Commission is invited to establish clearer  guidance on when each instrument should 
be utilised and how they can best be used in combination. 
Commission's response:  
The guidelines on using the instru ments to implement the Commission's 
development aid are currently being updated. The Budget Support guidelines are 
being revised for both general and sector al budget support. DG Aidco is currently 
preparing PPCM (Programme and Project Cycle Management) guidelines which 
revise, update and reorganise all the guidelines in a single document. One of the 
aims of this exercise is to strengthen  the links between programming and aspects 
relating to implementation. 
64. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 13th paragraph, page 9) - The 
Commission is invited to pursue its efforts jointly with partner counties and the donor community to contribute  to the formulation of we ll defined health sector 
policies and common developm ent oriented results fram eworks in beneficiary 
countries. 
Commission's response:
 
In most of the countries in which health is a focal sector of our cooperation and in 
those receiving General Budget Support (GBS),  the delegations are involved in the 
periodical reviews which bring together the Government, national players and the 
donor community. These joint reviews are normally carried out annually in the 
various sectors, including health. They provide an opportunity for a political 
dialogue with the partner country, allo w all the stakeholders to judge the 
performance of the sector and advance the sectoral policy framework. In countries 
receiving GBS the results of these joint re views entered in the more general annual 
review on GBS. 
65. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 14th paragraph, page 9) - The 
Commission is invited to pay more atten tion to sexual and reproductive health and 
rights, while respecting the established EU positions and to achieve the goals and the 
objectives of and taking into account the Programme of action of ICPD, the Beijing 
Platform for action and internationally -agreed development goals including the 
MDGs. The Council notes the importance of  increased accessibility to maternal 
health services, including in  the fight against HIV/AIDS. 
Commission's response:  
The Commission has been very active on sexu al and reproductive health and rights 
in international fora and in the developmen t of the Communication on EU role in 
Global Health. On the financing issue, th ere is a persistent d ilemma of combating 
fragmentation of funds for all the good re asons and ensuring that enough funding 
is flowing to sexual and reproductive hea lth and rights. By having a systematic 
focus on health systems strengthening these limitations are increasingly being 
tackled. 
 
EN 39   EN Under the Investing in People Programme an d the Global fund to fight AIDS, TB 
and Malaria more funds have become av ailable to the linking/integration of 
maternal health and HIV/AIDS services. In 2009 the Commission has organised 
an international workshop in cooperation with the ACP Secretariat, UNFPA and 
IPPF to disseminate the results of a mu lti-year reproductive health and rights 
project implemented in 22 countries. As me mber of the Executive Committee of the 
Reproductive Health Supplies Coalit ion the Commission is supporting the 
universal availability of reproductive hea lth supplies, especially contraceptives. 
Under the human rights umbrella the Commi ssion is speaking with a strong and 
consistent voice to promote the human rights of LGTB persons and to combat 
discrimination based on sexual orientat ion by combining political dialogue and 
cooperation programme supporting human rights and democracy. 
Within the recently adopted Gender Actio n Plan the rights and protection of 
women and girls are an important compon ent, including combating sexual and 
gender-based violence. 
66. (Council Doc. 5826/10 ADD 2, Annex 3, §III, 16th paragraph, page 9) - The Council 
encourages the Commission to work on the answers to the conclusions of the report. 
It welcomes the fact that the Commission accepts the Court's recommendations in 
general and that it has already begun to ta ke some measures to act on them, in 
particular the Council is pleas ed to see in the Commission responses that it will look 
at the sectoral allocations as part of the mid term re view of the 10th EDF. The 
Council asks the Commission to provide th e Council in 2010 with an update of the 
concrete steps that have been taken on the recommendations and conclusions of the 
report. 
Commission's response:  
The Commission has taken note of the recommendations made in the Court of 
Auditors' Special Report No 10/2008 (EC deve lopment assistance to health services 
in Sub-Saharan Africa). It recognises th e utility of these recommendations and is 
implementing them as far as it is able. 
The impact of the Mid-Term Review (MTR ) of the 10th EDF on the allocations 
granted to the health sect or will soon be known, once the MTR is completed. 
However, it must be pointed out that the MTR is not a new programming exercise, 
but an opportunity to make sure that the choices made when drawing up the 
Country Strategy Papers are still appropriate . It should also be pointed out that the 
use of EDF resources is determined on th e basis of priorities established by the 
partner countries. It is not just the Co mmission that decides how these resources 
are to be allocated. 
The Commission will submit to the Council,  by the end of 2010, a report reviewing 
the implementation of the recommendations and conclusions in the Court of 
Auditors' Special Report No 10/2008 on EC development assistance to health 
services in Sub-Saharan Africa. 
 
EN 40   EN Special Report No. 11/2008 "The management  of the European Union support for the 
public storage operations of cereals" 
The Council has made no speci fic request to the Commission. 
Commission's response:  
No reply necessary. 
 
EN 41   EN Special Report No. 12/2008 "Instrument fo r Structural Policie s for Pre-accession 
(ISPA), 2000-2006" 
67. (Council Doc. 5826/10 ADD 2, Annex 5, 5th paragraph, page 13) - The Council 
recalls the great importance it attaches to the efficiency and effectiveness of the pre-
accession aid. In this context, the Council ta kes note with particular interest of the 
recommendations made by the Court in order to avoid shortcomings in the future. It 
encourages the Commission to follow the recommendations of the Court and to take stock of the experience gained, not only with a view to the monitoring of the 
remaining ex-ISPA projects, but also to th e implementation of the new pre-accession 
instrument IPA. 
Commission's response:
 
The requested action has been taken. The satisfactory functioning of the 
decentralised implementation system is co nstantly monitored, in particular in 
relation to public procurement and imple mentation of projects. With regard to 
public procurement, the entire process is reviewed by the Commission Delegations. 
Audits and evaluations are ca rried out on a regular basis . On the spot visits are 
frequently organised to verify adequate progress of the projects. Roadmaps to 
waive ex-ante controls by Commission De legations on public procurement have 
also been prepared. The achievement of the benchmarks included in the roadmaps 
will confirm the preparedness of the nationa l institutions to assume full ownership 
for preparation and implementation of progr ammes and projects. This is relevant 
for both ISPA and IPA. 
 
EN 42   EN Special Report No. 1/2009 "Banking measures  in the Mediterranean area in the context 
of the MEDA programme and the previous protocols" 
68. (Council Doc. 5826/10 ADD 2, Annex 6, 5th paragraph, page 14) - The Council 
notes with satisfaction that several of the issues raised, were addressed in an adequate manner through the establishment of the ENPI. It nevertheless calls upon 
the Commission to continue to take due account of the reco mmendations contained 
in the report. 
Commission's response:
 
The Commission continues indeed to take  due account of the recommendations 
contained in the report. In particular, it  has enhanced its monitoring of EIB’s 
operations and has improved the informa tion flow with EU delegations. A new 
Framework Agreement is currently being finalised with the EIB. 
The level of coordination between the European Union, the EIB and other 
European multilateral and bilateral finan ce institutions has significantly increased 
since the creation of the Neighbou rhood Investment Facility (NIF). 
The Commission has led the way by enco uraging co-operation among European 
Public Finance Institutions and promo ting a harmonised approach towards the 
partner countries (e.g. in terms of procurem ent rules, single reporting, etc.). The 
NIF paves the way for the concrete impleme ntation of donor coor dination, division 
of labour and harmonisation of procedures. 
 
EN 43   EN Special Report No. 2/2009 "The European  Union's Public Health Programme (2003-
2007): an effective way to improve health?" 
69. (Council Doc. 5826/10 ADD 2, Annex 7, 8th paragraph, page 16) - The Council 
invites the Member States and the Commi ssion to assign clear targeted programme 
objectives that will be  in proportion with budgetary means available. 
Commission's response:  
Results of the final evaluation of the fi rst Health Programme and of the mid-term 
evaluation of the second Health Programme  as well as recommendations following 
the ECA's Special report will  be taken into account for the design and impact 
assessment of any succe ssor Health Programme. 
70. (Council Doc. 5826/10 ADD 2, Annex 7, 9th paragraph, page 16) - The Council 
invites the Member States and the Commi ssion to ensure greater clarity in the 
intervention logic in the conception and impl ementation of the Health Programme, in 
particular at programme and project level,  setting out coherent and better defined 
objectives which should be SMART, illust rating links between them and define 
process and performance indicators  to measure their achievement. 
Commission's response:  
An explicit intervention logic, usin g coherent and better defined SMART 
objectives, illustrating links between them  and defining process and performance 
indicators to measure their achievement, w ill be to set out for any successor Health 
programme. 
71. (Council Doc. 5826/10 ADD 2, Ann ex 7, 10th paragraph, page 16) - The Council 
invites the Member States and the Commi ssion to ensure that there is a limited 
number of annual priorities focused on strategic topics and activities with European 
added value. 
Commission's response:  
The Commission is currently preparin g the Annual Work Programme 2011 for 
Public Health with a view to concentratin g action on a limited number of priorities 
and to focusing on their European Added Value. 
72. (Council Doc. 5826/10 ADD 2, Ann ex 7, 11th paragraph, page 16) - The Council 
invites the Member States and the Comm ission to ensure participation of the 
Member States through the Health Program me Committee in set ting the priorities 
and preparation of work plans as  well as their implementation. 
Commission's response:  
Annual Work Programmes and Award decisi ons are systematically submitted to 
the Programme Committee. 
 
EN 44   EN 73. (Council Doc. 5826/10 ADD 2, Ann ex 7, 12th paragraph, page 16) - The Council 
invites the Member States and the Co mmission to consider complementary 
cooperation mechanisms as a m eans of facilitating collabor ation and the exchange of 
information throughout Europe with a view  to complementing national programmes 
and activities. 
Commission's response:  
The mid-term evaluation of the Health St rategy 2008-2013 will (a.o.) focus on 
assessing how to improve and develop use of Open Method of Coordination in 
Health. 
74. (Council Doc. 5826/10 ADD 2, Ann ex 7, 14th paragraph, page 16) - The Council 
invites the Commission to a void any overlaps in projects portfolio and results of 
those projects and improve coordination be tween the different financial programmes 
managed by the different Commi ssion's Directorate Generals. 
Commission's response:  
Inter Services Consultation has been reinforced in order to avoid overlaps in 
projects and improve coordination betw een the different financial programmes 
managed by the different Commission DG's. 
75. (Council Doc. 5826/10 ADD 2, Ann ex 7, 15th paragraph, page 16) - The Council 
invites the Commission to keep project s objectives in line with programme 
objectives and "annual priorities" agreed  in Annual Work Programme and set, 
wherever possible, quantified targets and process and perfor mance indicators in order 
to facilitate monito ring of progress towards set objectives. 
Commission's response:  
The EAHC (Executive Agency fo r Health and Consumers) defines deliverables of 
projects and performance indicators when negotiating project contracts. 
76. (Council Doc. 5826/10 ADD 2, Ann ex 7, 16th paragraph, page 16) - The Council 
invites the Commission to inform regular ly the Council's Working Party on Public 
Health on the implementa tion of the programme. 
Commission's response:  
As provided for in the Health Progra mme decision, an annual implementation 
report of the Health Programme is  sent to Council and Parliament. 
77. (Council Doc. 5826/10 ADD 2, Ann ex 7, 17th paragraph, page 16) - The Council 
invites the Commission to facilitate the transition between the successive Health 
programmes and projects financed by those programmes, while taking into account 
evaluations made of the outco me of previous programmes. 
 
EN 45   EN Commission's response:  
Results of the final evaluation of the fi rst Health Programme and of the mid-term 
evaluation of the second Health Programme  as well as recommendations following 
the ECA's Special report will  be taken into account for the design and impact 
assessment of any succe ssor Health Programme. 
78. (Council Doc. 5826/10 ADD 2, Ann ex 7, 18th paragraph, page 16) - The Council 
invites the Commission to make sure that  results of projects are widely publicly 
available and improve dissemination a nd use of those result among concerned 
stakeholders. 
Commission's response:  
Commission services and the EAHC (Executive Agency for Health and 
Consumers) are constantly improving their communication strategies in order to 
improve dissemination and use of results among stakeholders. 
79. (Council Doc. 5826/10 ADD 2, Annex 7, 19th paragraph, page 16) - On the basis of 
this audit and its recommenda tion the Commission, in consultation with the Member 
States through the Health Programm e Committee, should propose further 
improvement of the management of the current programme and its implementation. 
Commission's response:  
The Commission is currently preparin g the Annual Work Programme 2011 for 
Public Health with a view to concentratin g action on a limited number of priorities 
and to focusing on their European Added Value. This should be submitted to the 
Programme Committee in th e third quarter of 2010. 
 
EN 46   EN Special Report No. 3/2009 "The effectiveness of Structural measures spending on waste 
water treatment for the 1994 1999 and 2000-2006 programme periods" 
80. (Council Doc. 5826/10 ADD 2, Ann ex 8, 13th paragraph, page 20) - The Council 
invites the Commission to require that  information allowing the setting of 
performance targets, in line with Community  legislation, in such key areas as quality 
of water discharged, quality of receiving water bodies, volume of water to be treated 
and intended method of sludge disposal shoul d be included in grant applications and 
systematically checked as part of  the project appraisal process. 
Commission's response:  
With respect to quality of water discharged  there are limit values clearly set out in 
Directive 91/271/EC which n eed to be respected. 
With respect to quality of receiving wa ter, plans and programmes under Directive 
2000/60/EC, notified to the Commission by  22/3/2010, should include inter alia 
information on this, as the Commission has to assess them. 
With respect to volume of waters to be treated, this is a standard precondition for 
every project. 
Finally the method of sludge disposal is checked during the project appraisal 
process. 
However the Commission would like to reca ll that, in line with Article 192 (4) of 
TFEU, it is the right and res ponsibility of Member States  to finance and implement 
correctly the EU environmen tal legislation and policy. 
81. (Council Doc. 5826/10 ADD 2, Ann ex 8, 14th paragraph, page 20) - The Council 
invites the Commission to encourage Member States to assess the achievement of the 
anticipated results at project level as set out in application for assistance. 
Commission's response:  
The Commission is taking the requested actio n. It intends to include this issue for 
information and discussion in the next  meeting of the European Network of 
Environment Authorities (ENEA -the ne twork of environmental and managing 
authorities of the EU 27 Member States ) so that member States take the 
appropriate measures. 
82. (Council Doc. 5826/10 ADD 2, Ann ex 8, 15th paragraph, page 20) - The Council 
invites the Commission to fi nalise the impact assessment on the need for a possible 
legislative initiative on phosphates cont ent in detergents within the EU. 
Commission's response:  
The Commission has completed a comprehe nsive impact assessment of options and 
their costs and benefits of  restricting the use of phosphates in detergents. A 
 
EN 47   EN revision of the detergents legislation is indicated. A legislative proposal is foreseen 
for the third quarter of 2010. 
83. (Council Doc. 5826/10 ADD 2, Ann ex 8, 16th paragraph, page 20) - The Council 
invites the Commission to ensure that the financial sustainability of waste water 
collection and treatment projects is consid ered at the applica tion approval stage and 
pertinent information such as proposed tariffs  is given due consideration, taking also 
into account equity considerations. 
Commission's response:  
The Commission will not be taking the requested action. The reason for this is that 
Directive 2000/60/EC (Water Framework Di rective) obliges Member States to 
ensure that, from 2010 on, the costs of water services are based on the cost 
recovery principle, thus ensuring financ ial sustainability. The Commission will 
scrutinise implementation by Member States. 
84. (Council Doc. 5826/10 ADD 2, Ann ex 8, 17th paragraph, page 20) - The Council 
invites the Commission to inform the C ouncil and the European Parliament on the 
steps taken with regard to the reco mmendations of the report by June 2010. 
Commission's response:  
The Commission will inform the Council an d the European Parliament on the 
steps taken with regard to the recommend ation on the framework of discharge 
follow-up report. 
 
EN 48   EN Special Report No. 4/2009 "The Commissio n's management of non-state actors' 
involvement in EC development cooperation" 
85. (Council Doc. 5826/10 ADD 2, Annex 9, §V, 1st paragraph, page 24) - The Council 
invites the Commission to take further measures to streng then the genuine 
involvement of NSAs in EC developmen t cooperation and policy making processes 
and especially partner countries' NSAs, in line with existing instruments and 
guidelines. 
Commission's response:  
The Commission is taking the requested ac tion and agrees with the principle that 
NSAs must be involved in the development cooperation process. However, this level 
of involvement varies according to the various legal bases considered. In the 
framework of the Cotonou Agreement, th e need for consultations is agreed and 
legally binding both for the Commission and Partner-States. For DCI countries, 
the Commission applies an EU regulatio n: EU efforts to hold effective 
consultations with NSAs have to be matched by the willingness of national 
authorities to do the same. 
Furthermore, in the Commission's view th is should also be framed within new 
realities such as alignment to partner governments, and ownership. EC action in 
support of NSAs takes indeed into account the dual reality of supporting the right 
of initiative of Civil society organizatio ns and the growing need for ensuring 
"alignment" with partner governments priorities. 
The EC is currently discussing these issues  with all relevant stakeholders in one of 
the working group of the "Structured Dial ogue for an efficient partnership in 
development". More information is available on CISOCH: 
https://webgate.ec.europa.eu/fpfis/mwik is/aidco/index.php/Structured_dialogue 
86. (Council Doc. 5826/10 ADD 2, Ann ex 9, §V, 2nd paragraph, page 24) - The Council 
invites the Commission to provide more  guidance to NSAs on its procedures, 
emphasising the need for predictable Calls for Proposals procedur es or criteria to 
award "targeted projects", especially w ith regard to the financial rules. 
Commission's response:  
On guidance to NSAs on its procedure:  Both at the level of HQ and EU 
Delegations, the European Commission or ganizes informative sessions for NSA 
upon specific request and/or  in the framework of a Ca ll for Proposal. Moreover a 
Civil Society Helpdesk (CISOCH) is centra lizing all relevant information for NSA. 
An e-learning product tailor-made for NS A has been produced and is available on 
CISOCH. 
On predictability of Call for Proposal s: the EC is commi tted to improve the 
predictability and transparen cy related to the consultati on process by elaborating, 
as often as possible, specific calendars and communication material to facilitate 
 
EN 49   EN the interaction with NSAs. Annual Work  Programmes are available on Internet 
(including on CISOCH) but further improve ment of predictability will be done. 
On criteria to award "targeted projects": The Commission applies article 168 of 
the implementing modalities of  the financial regulations. 
87. (Council Doc. 5826/10 ADD 2, Annex 9, §V, 3rd paragraph, page 24) - The Council 
invites the Commission to ta ke into account the experien ces of the current project 
selection process and possible improvements resulting from the Mid-Term Review of the financial instruments for external act ions when putting forward proposals on the 
review of the EC fi nancial regulation. 
Commission's response:
 
The European Commission has proposed a number of measures within the 
framework of the Financial Regulation trie nnial revision, namely in the area of 
grants management, aiming at rendering it  simpler and easier to handle for both 
grant beneficiaries and cont racting authorities alike. 
88. (Council Doc. 5826/10 ADD 2, Ann ex 9, §V, 4th paragraph, page 24) - The Council 
invites the Commission to ensure, within  the existing budgetary framework, that 
sufficient resources, guidance and expertise ar e available to EC delegations so as to 
be able to better manage the NSAs i nvolvement in EC development cooperation. 
Commission's response:  
The Commission stresses that as far as NSAs are concerned, there is no one size 
fits all for training as the NSAs ‘archite cture’ varies immensely between countries. 
Since 2004/05, EuropeAid has provided tailor- made upstream guidance during the 
instruction phase of NSAs programmes, and downstream during implementation. 
Delegations are also provided with opera tional guidance: (i) through its intranet 
where guidelines and good practices are pos ted; (ii) through regional seminars 
where knowledge about commitment in dial oguing with NSAs and exchanges with 
colleagues are enhanced and finally (iii) through studies. 
In 2010 and 2011, in the framework of the 4 regional seminars of the Structured 
Dialogue, one specific day, addressing NSA involvement in EC cooperation, is 
devoted to interactions between EC He adquarters and EU Delegations. In total 
and by mid-2011, around 80 EUD staff (from 60 Delegations) will participate in 
these internal training & information sessions. 
89. (Council Doc. 5826/10 ADD 2, Ann ex 9, §V, 5th paragraph, page 24) - The Council 
invites the Commission to develop a consis tent strategy for capacity development of 
NSAs in all partner countries, in line with the Court's findings in Asian and Latin American countries. 
Commission's response:
 
The Commission is taking the requested acti on. Regional and national strategies to 
support NSAs are carried out. Despite the fact that former ALA regulation did not 
 
EN 50   EN formally envisage capacity building support to NSAs, various studies and 
programmes are being carried out on this issue in both Latin America and Asia. 
For example, several projects/programmes in Asia and Central Asia which are/ 
and will be implemented through non-governmental organisation have been 
adopted in 2007 and 2008. While th eir primary objective is to  contribute to poverty 
eradication, improvement of access to social services and improvement of 
governance and rule of law, they support non-state actors in pursuance of these 
goals. This is the case notably in Afgh anistan, China, Pakistan, Kyrgyzstan and 
Tajikistan. 
90. (Council Doc. 5826/10 ADD 2, Ann ex 9, §V, 6th paragraph, page 25) - The Council 
invites the Commission to su stain its dialogue with NSAs  on the implementation of 
cooperation programmes, including in the framework of the "Palermo Process". 
Commission's response:  
The "Structured Dialogue for an efficient partnership in development" (initiative 
following the "Palermo Process" but with  a much wider scope) has been launched 
in March 2010 by Commissioner Piebalgs and is currently on-going. The final 
conference is due to take  place in April/May 2011. 
91. (Council Doc. 5826/10 ADD 2, Ann ex 9, §V, 7th paragraph, page 25) - The Council 
invites the Commission to report back to  the Council on progress in meeting these 
recommendations by the end of 2010. 
Commission's response:  
The Commission is taking the requested action and will report back to the Council 
by the end of 2010. It will be an appropriate occasion to take-stock of the 
Structured Dialogue process. 
 
EN 51   EN Special Report No. 5/2009 "The Co mmission's Treasury Management" 
92. (Council Doc. 5826/10 ADD 2, Ann ex 10, 11th paragraph, page 27) - The 
Commission should improve the documenta tion of its cash flow forecasting and 
reporting procedures. 
Commission's response:  
The requested action has been taken. A revised procedural document concerning 
the preparation of the cash flow reportin g and forecast is available since March 
2009. 
93. (Council Doc. 5826/10 ADD 2, Ann ex 10, 12th paragraph, page 27) - The 
Commission should analyse the functioning of  the present system of own resources 
accounts with the aim of reducing balances  on these accounts during the second half 
of the year. 
Commission's response:  
The present system of own resources account s, primarily designated to receive the 
own resources payments, is linked to the own resources system, as established by 
Council decision 2000/597/EC, Euratom and its implementing Council Regulation 
1150/2000, that the Commission is bound to implement. The Council adopted in 
2007 the new own resources decision 2007/436/EC, Euratom, and very recently a 
revision of Council Regulation 1150/2000, which do not introduce any significant 
changes in the system of own resources accounts and payments. 
94. (Council Doc. 5826/10 ADD 2, Annex 10, 13th paragraph, page 27 and 14th 
paragraph, p. 28) - The Commission should put in place procedures which ensure 
coordination of its treasury management activ ities. This coordina tion should entail an 
exchange of information on risks and best  practices regarding treasury and asset 
management activities, in particular to  maximise efficiencies and minimise 
inadvertent exposure to risk. 
Commission's response:  
The requested action has been taken. Meet ings are regularly held between their 
Directorates General for Economic an d Financial Affairs (DG ECFIN) and for 
Budget (DG BUDG) with a view to sharin g information on risks and exchanging 
experiences and best practices regarding tr easury and asset management activities 
on a Commission-wide level. 
95. (Council Doc. 5826/10 ADD 2, Ann ex 10, 14th paragraph, page 27) - DG BUDG 
should improve the documentation of its ri sk management and the scope of its 
performance measurement. 
 
EN 52   EN Commission's response:  
The requested action has been taken. A consolidated risk management document 
for the Directorate-General for Budget tr easury operations is available since 
September 2009. 
The Commission considers that its sy stem for performance measurement is 
adequate. 
96. (Council Doc. 5826/10 ADD 2, Ann ex 10, 15th paragraph, page 27) - The 
Commission should as a matter of priority reach a conclusion in its search for an 
optimum solution for the treatment of provisionally collected fines. 
Commission's response:  
The requested action has b een taken. A new system for the management of 
provisionally cashed fines, which addresse s all concerns raised by the European 
Court of Auditors in its special report No 5/2009 on the Commission's treasury 
management, is in place since the beginning of 2010. 
 
EN 53   EN Special Report No. 6/2009 "European Unio n food aid for deprived persons: an 
assessment of the objectives, the means and the methods employed" 
97. (Council Doc. 5826/10 ADD 2, Ann ex 11, 4th paragraph, page 29) - The Council 
appreciates the Commission's intention to  examine the recommendation of the Court 
as regards the adaptation of the barteri ng arrangement and invites the Commission to 
take the actions it deems appropriate in this respect. 
Commission's response:  
The Commission is taking  the requested action. 
The Commission will examine the propos ition of the Court as regards the 
adaptation of the bartering arrangements  without neverthel ess preventing the 
possibility to mobilise interv ention stocks as this practice is at the core of the 
scheme. This will be done via the new imp lementing rules that the Commission will 
be able to adopt once the new EP and Council regulation is in place. 
 
EN 54   EN Special Report No. 7/2009 "The management  of the Galileo progr amme's development 
and validation phase" 
98. (Council Doc. 5826/10 ADD 2, Annex 12, 3rd paragraph, page 30) - Council notes 
the Commission's thorough and constructive response to the c onclusions of the 
special report and notes that part of the measures suggested by the Court has already 
been taken by the Commission. The Council encourages the Commission to continue 
in this path in order to ensure a smooth  and successful development of the European 
satellite navigation system. 
Commission's response:  
The Commission will continue ensuring a smooth and successful development of 
the European satellite navigation system. 
The European Commission took over res ponsibility for managing the EGNOS and 
Galileo programmes on 25 July 2008 wh en Regulation 683/2008 entered into 
force. In December 2008 the Commissi on's services delegated budget 
implementation tasks for the Galileo satellite radio-navigation programme and the 
deployment of Galileo infrastructure to the European Space Agency (ESA). This 
was done through a delegation agreement. 
This instrument, which is provided for in  the Financial Regulation, was considered 
the best way to establish a framewor k for optimising coope ration between the 
Commission and the ESA, thereby contributi ng to the successful outcome of the 
project. It delegates budget ary implementation – while st ill requiring the Financial 
Regulation to be respected - and enables the ESA to manage the technical part of 
the two programmes effectively, while allo wing the Commission to exercise its 
policy and control powers fully. 
More specifically, the agreement covers procurement, project and technical 
management linked to the implementation of  Galileo's Full Op erational Capability 
(FOC). In particular it covers the deploy ment of Galileo infrastructure, which is 
based on the procurement of six main work packages (system support, ground 
mission segment, ground control segment, satellites, launch serv ices and operation 
services) and the integration of the relevant deliverables into a single system. The 
estimated appropriations for these delegated tasks are €2.408 billion. 
As part of the delegation agreement, three of the six contracts procuring Galileo’s 
initial operational capa bility were awarded in earl y January 2010. This will allow 
the initial deployment and service provisio n of Europe’s satellite navigation system 
in early 2014. 
Moreover, the Commission will be in a position to inform Member States and 
Parliament of an update of the cost figures concerning the Galileo program 
through the mid term review to be adopted before end 2010. 
 
EN 55   EN Special Report No. 9/2009 "The efficiency a nd effectiveness of the personnel selection 
activities carried out by the Euro pean Personnel Selection Office" 
99. (Council Doc. 5826/10 ADD 2, Ann ex 13, 5th paragraph, page 32) - The Council 
underlines the necessity  to reduce substantially the dura tion of the selection process 
and takes note of EPSO's ongoing efforts on this issue. The Council underlines the need to strengthen cooperation between th e Community institutions and EPSO. It is 
essential that the Institutions identify a nd communicate their strategic staffing needs 
to EPSO in a timely and cons istent manner, in order to help the EU Institutions 
achieve their recruitment targets. 
Commission's response:
 
This recommendation is accepted and is al ready being implemented. As part of the 
EPSO development programme approved by  the Management Board in September 
2008, it was decided to introduce 3-year strate gic planning and, in this context, to 
draw up common rules for the institutions  to present their needs, and the 2009-
2011 strategic planning is currently bein g implemented (recommendation No 1 of 
the EDP). The institutions' needs for the ne xt three years were actually received in 
March 2009. Focusing planning on strate gic management of human resources 
needs is one of the pillars of the EDP. 
100. (Council Doc. 5826/10 ADD 2, Ann ex 13, 6th paragraph, page 32) - The Council 
agrees that there is a need to professiona lize Selection Boards and to use qualified 
assessors. The Council stresses the importa nce of Selection Boards not only being 
competent in the field but also having expertise in human resource management. 
Commission's response:  
This recommendation is accepted and is already being implemented by two actions 
included in EPSO's EDP (recommen dations 14 and 15): as part of the 
introduction of assessment centres, the professionalism of the selection board 
members based on the concept of secondment  of officials from the Institutions to 
the Office for a fixed period of up to 4 years, and the setting up of a pool of 
markers. 
101. (Council Doc. 5826/10 ADD 2, Ann ex 13, 7th paragraph, page 32) - The Council 
acknowledges that EPSO's decision to make th e pre-selection test available in all the 
EU languages will contribute towards securi ng for the institutions  the services of 
officials of the highest standard of abilit y, efficiency and integrity, recruited on the 
broadest possible geographi cal basis from among nati onals of Member States. 
Commission's response:  
This recommendation is accepted. At its meeting on 13 November 2008 the 
Management Board approved the Office’s  proposals for imple mentation in two 
stages: (1) the introduction from 2010 of te sts in the candidates’ main language, in 
specific monolingual competitions only, in order to test the database containing the 
new language versions of the questions, and (2) from 2011, general use of 23 
languages for most admission tests (in par ticular verbal and numerical reasoning). 
 
EN 56   EN 102. (Council Doc. 5826/10 ADD 2, Ann ex 13, 8th paragraph, page 33) - The Council 
underlines the need for an effective comm unication strategy in order to attract a 
sufficient number of qualified candi dates. The measures identified for 
implementation should focus on relevant ta rget groups and address the specific 
situation in each Member State. Attractiven ess is also dependent on transparency in 
procedures, where accurate and clear notices of competition published in all the official languages play an important role. 
Commission's response:
 
This recommendation is accepted and is already being implemented. Under the 
EDP and the new communication strategy, a revamped website has been in place 
since the beginning of March 2009. In addition, regular meetings and contacts are 
held on EPSO’s initiative with the network of experts on selection and recruitment 
in the Member States, and the subjec t of making EU careers appealing to 
candidates is regularly discussed. 
103. (Council Doc. 5826/10 ADD 2, Ann ex 13, 9th paragraph, page 33) - The Council 
stresses the need for transpar ency in relation to the financial implications of the new 
selection procedure to guarantee cost-effec tiveness both now and in the longer term, 
and underlines that EPSO must have ade quate funding in order to continue to 
implement the EDP successfully. It takes no te of EPSO's commitment to carry out a 
benchmarking exercise of costs per successf ul candidate against other international 
organisations, and in that context to analys e the costs and benefits  of the new system 
once introduced. 
Commission's response:  
This recommendation is accepted and is al ready being implemented. An analysis of 
the reference costs in order to compare th e costs determined with those of national 
administrations will be carried out and the results should be available by the end of 
2010. 
The EDP is intended to impart added value to the selection process. As explained 
in the proposed budget for 2010, an even more highly professional selection 
service, which is the princi pal goal of the EDP, will yi eld a substantial return by 
attracting and selecting the right candidat es to enable the institutions to achieve 
their major strategic objectives. 
104. (Council Doc. 5826/10 ADD 2, An nex 13, 10th paragraph, page 33) - The Council 
highlights that successful candidates must furthermore be given clear, precise and 
practical information on the steps to follow between selection and potential recruitment. 
Commission's response:
 
EPSO considers that the current system for handling reserve lists works well and 
that it has been considerably improve d, in particular since the successful 
candidates have been able to verify  their situation in real time. 
 
EN 57   EN In addition, EPSO is assisting the Institu tions in giving successful candidates 
access to certain vacancy notices published. This will allow greater transparency 
and more equal treatment between successful  candidates who are in Brussels and 
may have access to these notices and the other candidates. 
105. (Council Doc. 5826/10 ADD 2, An nex 13, 11th paragraph, page 33) - The Council 
invites EPSO to periodically inform the C ouncil about the further implementation of 
this Programme (EDP). 
Commission's response:  
EPSO is part of the Commission for admin istrative purposes and its Director, Mr 
Bearfield, reports on the progress made  in the EDP to EPSO's Management 
Board, on which all the In stitutions are represented. 
If the Management Board agrees, the Dire ctor would be willing to inform the 
Council at its request. 
 
EN 58   EN Special Report No. 10/2009 "Information provision and promotion measures for 
agricultural products" 
106. (Council Doc. 5826/10 ADD 2, annex 14, 3rd paragraph of page 34) - The Council 
appreciates the Commission's efforts to s upport Member States in their evaluation 
and selection of programme proposals in order to deliver  measures that facilitate 
reaching the objectives of the policy; stresses the importance of improving ways to measure the effectiveness and impact of projects. 
Commission's response:
 
The requested action has been taken. 
Since 1999, the European Union has pursued an overall and coherent information 
and promotion policy for agricultural products and production methods and 
agricultural based food products. The information and promotion campaigns 
which it co-finances may take place either in  the EU internal market or in non-EU 
countries. With a view to sound management and in an attempt to improve 
implementation of this policy, the Commissi on requested eight external evaluation 
reports between 2006 and 2008, the conclusions of which highlighted the positive 
impact of the promotion progr ammes for the four specifi c strategy objectives set 
out in the regulations. 
107. (Council Doc. 5826/10 ADD 2, Ann ex 14, 5th paragraph, page 34) - The Council 
acknowledges that the impr ovements currently being ma de to the Commission's 
selection procedure should be continued a nd that the Member States should continue 
to increase their sele ctivity. The Council considers that  this should be done without 
increasing the administrative burden and bearing in mind the ongoing objective of 
simplification of the CAP. 
Commission's response:  
The requested action has been taken. 
The Commission has continued to improve the selection procedure by putting the 
emphasis on good evaluation methodology in  each programme. A revised version 
of document AGRI/63454/2007 has been prepared by the Commission services and 
is for the sake of clarity and precision su bdivided in two parts specifically intended 
for the preparation of programmes and their posterior evaluation. 
 
EN 59   EN Special Report No. 11/2009 "The sustainabi lity and the Commission's management of 
the LIFE-Nature projects" 
108. (Council Doc. 5826/10 ADD 2, An nex 15, 18th paragraph, page 37) - The Council 
calls upon the Commission to have regard to the recommendations of the special 
report in its forthcoming mid-term review  evaluating the implementation of LIFE+, 
to be submitted before 30 September 2010 as  required by Article 15 of Regulation 
(EC) No. 614/2007, including th e complementarity of LIFE + with other Community 
funds. 
Commission's response:  
The Commission is taking into account  the Court's recommendations in its 
forthcoming mid-term review  and in the related Commission Communication, 
including complementarity. The publica tion of the review is on schedule. 
 
EN 60   EN Special Report No. 12/2009 "The effectiveness of the Commission's projects in the area 
of Justice and Home Affair s for the Western Balkans" 
109. (Council Doc. 5826/10 ADD 2, Ann ex 16, 8th paragraph, page 39) - The Council 
asks the Commission to improve sustainabi lity by conducting, more systematically, a 
thorough needs analysis before investme nt projects are appr oved, including long 
term maintenance plans within project fiches. 
Commission's response:  
The Commission is addressing the issue of sustainability through project 
conditionalities and co-financing by the be neficiaries. Moreover, the needs are 
generally identified in the framework of the progress reports which include an 
assessment of the state of pl ay in the area of JHA. 
In order to enhance sustainability of proj ects, project fiches now include specific 
conditionality on infrastructure maintenance. 
110. (Council Doc. 5826/10 ADD 2 Annex 16, 9th paragraph, page 39) - The Council 
asks the Commission to improve sustainabi lity by complementing the delivery of 
assistance with commitments from the authori ties in the recipient countries to ensure 
sustainable institutional change. 
Commission's response:  
In order to enhance sustai nability and ownership of projects under IPA 2007 and 
2008 programmes, project fiches include sp ecific conditionality on infrastructure 
maintenance. Furthermore, the Commissi on embarked on a regional financial 
assistance project to improve monitoring  in the JHA area of performance of 
authorities and financial assistance in March 2009. 
111. (Council Doc. 5826/10 ADD 2, An nex 16, 10th paragraph, page 40) - The Council 
invites the Commission to bett er set objectives and use impact indicators to measure 
results of projects. 
Commission's response:  
The Commission now sets impact indicators which are part of the activity-based 
management cycle. They include the degree  to which values related to freedom, 
security and justice are now respected in key third countries, including the 
countries in which the audit has been conduc ted; the values incl ude the rule of law 
and respect for fundamental rights. 
More generally, the Commission has learne d from past experiences and now acts 
according to a formalised approach which se es the beneficiary in the driving seat 
of the assistance process, taking full res ponsibility for the anticipated objectives, 
methodologies and results. 
112. (Council Doc. 5826/10 ADD 2, Annex 16,11th paragraph, page 40) - The Council 
invites the Commission to actively cont ribute to improve  donor coordination. 
 
EN 61   EN Commission's response:  
In endeavouring to coordinate donors, the Commission maintains regular contacts 
for policy and financial assistance coordi nation with the Council of Europe, the 
Venice Commission, UN High Commissioner fo r Refugees, International Office of 
Migration, International Criminal Tribunal for the former Yugoslavia, and 
bilateral donors. Meetings are held regu larly between the EC delegations and the 
Member States' Embassies for coordinatin g their bilateral financial assistance 
with that of the Community. The Commissi on organised conferences in autumn 
2008 and in April 2009 with the main donors, aimed at improving donor 
coordination methodologies. The latest conference, has mainly focused on the 
practical aspects of coordination on th e ground, and was held in October 2009. 
On the ground, the Regional Cooperation Co uncil took over during the first half of 
2008 the role of the former Stability Pa ct as facilitator of regional donor 
cooperation in the JHA area and is organising conferences to this end. Donor 
cooperation meetings are also organised through regional initiatives. 
 
EN 62   EN Special Report No. 13/2009 "Delegating impl ementing tasks to executive agencies: a 
successful option?" 
113. (Council Doc. 5826/10 ADD 2, Annex 17, 2nd paragraph, page 42) - The Council 
stresses the importance for the Commission to be able to delegate some of its tasks 
relating to the management  of EU programmes to third parties, while fully 
complying with the principle of sound fina ncial management and transparency, in 
order to contribute to a more effici ent implementation of EU programmes and 
thereby decreasing administrative costs. 
Commission's response:  
The Commission already announced its in tention not to create new executive 
agencies till the end of the current fina ncial framework peri od. Moreover, it also 
intends to examine the possibility of ex tending to the existing agencies any 
eventual new responsibility for a new programme allocated to the Commission 
during the same period. 
114. (Council Doc. 5826/10 ADD 2, Ann ex 17, 5th paragraph, page 42) - The Council 
regrets that the Commission's underestima tion of the time needed to set-up a new 
agency and to recruit staff has led to  recurrent over-budge ting and asks the 
Commission to put forward more accu rate estimates in the future. 
Commission's response:  
The Commission takes every care to ensure  the budget estimates it prepares are 
robust and reasonable taking full account of the expected start-up date of the 
agency, the probable pace of recruitment and the duration of the budgetary 
procedure. A delay in the satisfactory co nclusion of the budget process may result 
in a delay in the start-up of the agen cy and, therefore, in the timing and pace of 
recruitment. A key step in this regard is  the appointment of the Director of the 
agency, only after which the recru itment of agency personnel can start. 
It appears that the improvements  made in this area have led to the time needed to 
set-up a new agency having decreased between the first and last executive agencies 
in the research area. 
115. (Council Doc. 5826/10 ADD 2, Ann ex 17, 6th paragraph, page 43) - The Council 
calls on the Commission to reconsider its pr ocedures for identifying the potential for 
externalisation and for considering the establishment or the extension of executive agencies in order to ensure an efficient and effective management of EU programmes 
at lower costs in comparison to management by Commission's services. 
Commission's response:
 
The Commission considers that the establishment of executive agencies has to be 
motivated by a favourable cost benefit analysis and by the added value they can 
bring to the implementation of EU programmes, when a clear separation between 
policy and implementing tasks can be made. 
 
EN 63   EN Moreover, the Commission already announced its intention not to  set up additional 
executive agencies unless th ere are new Commission competencies up to 2013, and 
instead to make use of the possibility  of extending the mandate of existing 
agencies. 
116. (Council Doc. 5826/10 ADD 2, Ann ex 17, 7th paragraph, page 43) - The Council 
requests the Commission to continue improving the cost-benefit analyses 
accompanying the decisions to create executives agencies in order to allow them to contribute fully and effectively to the de cision-making process and to take into 
account all relevant costs and benefits base d on appropriate indicators and asks the 
Commission to put forward comprehensive co mparative cost estimations between in-
house management and externalisation, incl uding those related to freed and frozen 
posts. 
Commission's response:
 
The Commission has set up 6 executive agencies and has permanently enriched 
the analysis carried out with previous experiences. It has always focused on 
quantitative aspects, since these were th e aspects the European Parliament and 
Member States have mostly focused on. However, also qualitative aspects were 
looked at as the CBAs have gradually  become more comprehensive. 
The Commission believes that the CBAs ha ve continuously been improved and 
now include relevant and measurable costs. This will of course only be possible to 
verify the next time a new ex ecutive agency is established. 
The cost-benefit analyses have informed th e inter-institutional decision making 
process, as foreseen in Council Regulation 58/2003, Art. 3, and brought added 
value in order to form an opini on about different alternatives. 
117. (Council Doc. 5826/10 ADD 2, Ann ex 17, 8th paragraph, page 43) - The Council 
calls on the Commission to guarantee that it  avails itself of relevant, reliable 
workload and productivity data related to the implementation of the delegated tasks, 
both before and after externalisation, in order to be able to fully evaluate the benefits 
produced by the executive agencies. 
Commission's response:  
The Commission acknowledges that initial CBAs and financial statements did not 
always provide all possible workload and productivity indicators before 
externalisation and for the triennial evalu ation pursuant to Article 25 of Council 
Regulation 58/2003. Improvements have been made in the more recent CBAs, and 
the Commission will in the future go deep er into the assessment of workload and 
productivity. This will of course only be possible to verify the next time a task is 
delegated to an executive agency. 
118. (Council Doc. 5826/10 ADD 2, An nex 17, 10th paragraph, page 43) - The Council 
invites the Commission to make better us e of the annual work programmes and to 
develop focused indicators. 
 
EN 64   EN Commission's response:  
As regards timing, the adoption of th e Executive Agencies' Annual Work 
Programmes should be speeded up through earlier adoption of the DGs' Financing 
Decisions. Instructions to this effect, as well as on the content of agency Work 
Programmes, were given to parent DGs and agencies in March 2010. At the same 
time, instructions were also given on performance indicators and a number of key 
performance indicators were defined for further use by parent DGs and agencies. 
The Commission expects these guidelin es to be applied in the 2011 work 
programmes of the agencies. 
119. (Council Doc. 5826/10 ADD 2, Ann ex 17, 11th paragraph, page 43) - While taking 
note of the progress made by the Commissi on to recruit extensively contractual 
agents, the Council invites it  to continue reflecting upon measures to simplify the 
recruitment of executives agencies' staff ad apted to tasks originating from results-
oriented and targeted objectives. 
Commission's response:  
The simplification of the recruitment pro cess introduced in the framework of the 
EPSO Development Programme will apply to institutions and agencies alike. 
120. (Council Doc. 5826/10 ADD 2, An nex 17, 13th paragraph, page 43) - The Council 
invites the Commission to apply the success factors identified, e.g. simplified 
procedures, as elements for leading to bett er results in the executive agencies, to 
those programmes that continue to be  managed by the Commission itself. 
Commission's response:  
The success of the executive agencies lies in : their capacity to recruit extensively 
contractual agents (up to 75%) with contra cts of much longer duration than in the 
Commission; to target their recruitment to  specific skills; and to specialise on 
recurrent executive tasks. These advantage s are inherent to the concept of the 
executive agencies and can therefore no t be reproduced within the Commission. 
Firstly, the Commission has to maintain the overall current balance of staff which 
includes predominantly permanent offici als and may only employ contractual 
agents for maximum of 3 years. Secondly, in  order for the Commission to focus on 
its strategic and policy tasks as an in stitution, the recruitment profile (more 
"generalist") has to be different fr om that of the executive agencies.  
121. (Council Doc. 5826/10 ADD 2, An nex 17, 14th paragraph, page 43) - The Council 
asks the Commission to inform in good time about forthcoming external evaluations 
of executive agencies. 
Commission's response:  
The ex-post evaluations of executive agencies are included in the Commission's 
Forward Evaluation Plan, available on the following link: 
http://ec.europa.eu/dgs/s ecretariat_general/evaluation/documents_en.htm 
 
EN 65   EN Special Report No. 14/2009 "Have the manageme nt instruments applied to the market in 
milk and milk products achiev ed their main objectives?" 
The Council has made no speci fic request to the Commission. 
Commission's response:  
No reply necessary. 
 
EN 66   EN European Development Funds 
122. (Council Doc. 5873/10, Annex, §3, 10th paragraph, page 5) - The Council invites the 
Commission to continue with its reform efforts and to remedy the shortcomings 
identified by the Court as regards the relia bility of the accounts and regularity of the 
transactions underlying the accounts. 
Commission's response:  
The Commission received an unqualified opi nion from the Court of Auditors on 
the reliability of the EDF accounts. The Commission will endeavour to remedy any 
shortcomings identified, both for the reliabi lity of the accounts and the legality and 
regularity of the underlying transactions. 
123. (Council Doc. 5873/10, Annex, §3, 11th paragraph, page 5) - The Council reiterates 
the importance of the fact that, in the procedures for granting budgetary support and before making transfers of funds, the Commission should en sure that the conditions 
of the Cotonou Agreement and of the financing agreements are met. In this respect, the Council notes that the Commission intends  to continue promoting a more intense 
dialogue with Members States on budgetary support. 
Commission's response:
 
All budget support operations are discussed at the EDF committee which gives a 
formal opinion on each proposal. In all ACP countries in which budget support is 
provided discussions on budget support operations take place between the 
Commission and EU Member States represen ted and significant issues related to 
budget support are discussed in a Commission/Member State working group on 
budget support. The Commission provides  an annual report on budget support 
operations to Member States for discussion in the EDF committee. 
124. (Council Doc. 5873/10, Annex, §3, 12th paragraph, page 6) - The Council stresses 
the importance of being regularly informed on the Commission's evaluation of the effects of such measures, particularly as regards risk management, analysis of the 
internal control system, the audit of transactions and budget support. 
Commission's response:
 
EuropeAid provides an in-depth analysis of the performance of its assurance and 
internal control system in its Annual Activit y Report which is publicly available. In 
addition an EDF specific Financial Management Report is submitted to 
Parliament and Council every year as requ ired by the EDF Financial Regulation. 
 
EN 67   EN Requests concerning individual agencies 
125. (Council Doc. 5827/10 ADD 1, Annex to Annex 9, 4th paragraph, page 29) - As 
regards the European Agency for Rec onstruction, the Counc il takes note with 
dissatisfaction of the questiona ble financial management re garding five projects on 
cross-border cooperation for which the Evaluation Committee disagreed on several 
points with the assessors designated specifically for this task and invites the Commission to ensure that a similar mismanagement is avoided in the future. 
Commission's response:
 
The Commission has taken note of this observation as the current structures for 
financial assistance ensure sound financial management. 
Concerning the European Agency for Reconstruction, the Commission wishes to 
stress that it has been an efficient tool for the area it  was designed for, thanks 
among others to its speed in delivery which was essential in the reconstruction 
phase in the region. 
126. (Council Doc. 5828/10 ADD 1, Annex to  Annex 2, 2nd paragraph, page 7) - As 
regards the Executive Agency for Competitiveness and Innovation, the Council notes that the Executive Agency's initial budget for 2008 was reduced by more than 22% 
later in the year following delays in the re cruitment of staff and lower than expected 
forecasts for mission and building costs. It  invites both the Executive Agency and the 
Commission to adopt a more realistic and effective approach when planning tasks, 
recruitment activities and expenditure. 
Commission's response:
 
The year 2008 was the first full year follow ing the extension of the tasks of the 
Agency. The initial budget was based on estimates of staff number and operating 
costs for 2008, and was in correspondence with the budgeted amount indicated in 
the financial statement (fiche financière ) prepared at the time of the Agency's 
extension in May 2007.  
During 2008, the Agency did not spend the full  amount of the in itial budget mainly 
due to the fact that it recruited staff acco rding to the successive handover of the 
new tasks by the parent DGs. In order to allow the parent DGs to address the 
unspent funds to other operational activi ties, the Agency amen ded its budget in 
October 2008. 
Meanwhile the Executive Agency has im proved its budget planning and 
implementation monitoring. As for the 2010, the Agency plans to fully consume its 
budget appropriations.