Special Report Efforts to address 
problems with public 
procurement in  
EU cohesion expenditure should be intensifiedEN 2015  NO 10
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Efforts to address 
problems with public 
procurement in  
EU cohesion expenditure 
should be intensified
(pursuant to Article 287(4), second subparagraph, TFEU)Special ReportEN 2015  NO 10
02
 Audit team
The ECA’s special reports set out the results of its performance and compliance audits of specific budgetary areas or 
management topics. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks 
to performance or compliance, the level of income or spending involved, forthcoming developments and political and 
public interest.
This performance audit was produced by Audit Chamber II — headed by ECA Member Henri Grethen — which specialises 
in structural policies, transport and energy spending areas. The audit was led by ECA Member Phil Wynn Owen, sup -
ported by the head of his private office, Gareth Roberts, and Katharina Bryan, attaché; Niels-Erik Brokopp, head of unit; 
Milan Smid, team leader; Remus Blidar, Anastassios Karydas, Laura Zanarini, auditors; Ildik ó Preiss, attaché of Mr. Grethen's 
private office; and Johanne Vermer, lawyer.
From left to right : J. Vermer, G. Roberts, I. Preiss, A. Karydas, R. Blidar,  
K. Bryan, M. Smid, L. Zanarini, N.-E. Brokopp, P . Wynn Owen.

03
 Contents
Paragraph
 Glossary
 Abbreviations
I-VIII  Executive summary
1-13  Introduction
4-8 The EU public procurement framework
9 -11  Cohesion policy and public procurement
12-13  Public procurement procedures: how do they work?
14-17  Audit scope and approach
18-94  Observations
19-48  Systematic analysis of public procurement errors by the Commission and Member States is very 
limited
19-24  Failure to comply with public procurement rules is still a significant source of error in the area of cohesion 
policy
25-34  There are various causes of public procurement errors
35-40  Comprehensive analysis of errors in Member States is precluded by a lack of coherent data …
41 … but there are signs, in the Member States visited, that data are starting to be collected in a more 
systematic way
42-48  The Commission does not yet comprehensively and systematically analyse public procurement errors
49-94  The Commission and Member States have started to implement actions to address the problem, 
but there is still a long way to go
51-60  Actions taken by the Commission since 2010 have begun to target the overall problem
61-74  If correctly applied, new legislation has the potential to help address the problem of public procurement 
errors
75-82  Member States focus on first‑level checks and have only recently started to take preventive actions
83-94  IT tools could help address public procurement problems but will need to be fully implemented
04 Contents
95-105  Conclusions and recommendations
 Annex I  —  The Commission’s and Member States’ roles in public procurement and cohesion 
policy
 Annex II — Analysis of errors by fund detected by the Court, 2009 ‑2013
 Annex III  — Description and analysis of errors in the different phases of tendering procedures
 Annex IV  —  Public procurement infringement procedures initiated by the Commission, 
2009 ‑2013
 Reply of the Commission
05
 Glossary
An audit authority  provides assurance to the Commission regarding the effective functioning of the management 
systems and internal controls for an operational programme (OP) (and, as a consequence, the legality and regularity 
of the expenditure certified). Audit authorities are generally departments within state chancelleries, at ministries of 
finance (or internal control bodies under ministry authority), at other ministries or within supreme audit institutions. 
They must be functionally independent from the bodies managing the funds. An audit authority reports the 
findings of its systems audits and audits of operations to the managing and certifying authorities for the OP 
concerned. Reports on systems audits and the annual control report are also submitted to the Commission. If the 
audit authority considers that the managing authority has not taken appropriate corrective action, it must draw the 
Commission’s attention to the matter.
Certifying authorities  carry out first-level checks on the expenditure declared by managing authorities and certify 
that this expenditure is legal and regular. They are generally part of the ministry of finance or internal control 
bodies under ministry authority.
Corruption  is the abuse of power for private gain. Passive corruption is the deliberate action of an official who, 
directly or through an intermediary, requests or receives advantages, for himself or for a third party, or accepts 
a promise of such an advantage, to act or refrain from acting in accordance with his duty. Active corruption is the 
deliberate action of whosoever promises or gives such advantages to an official.
The aim of the Cohesion Fund  is to improve economic and social cohesion within the European Union by financing 
environment and transport projects in Member States whose per capita GNP is less than 90 % of the EU average.
Contracting authorities are national, regional or local authorities or bodies governed by public law whose role 
involves applying the public procurement directives for public contracts and design contests.
The  Directorate‑General for Employment, Social Affairs and Inclusion is the European Commission department 
responsible for EU employment and social issues. In partnership with national authorities, social partners, civil 
society organisations and other stakeholders, the directorate -general addresses challenges linked to globalisation, 
the ageing of EU’s population and changing social realities. This DG holds the portfolio for the European Social Fund 
(ESF).
The Directorate‑General for Internal Market, Industry, Entrepreneurship and SMEs, formerly known as DG 
Internal Market and Services, is the European Commission department responsible for completing the internal 
market for goods and services, fostering the EU economy through activities in support of industry and small and 
medium enterprises and delivering the EU space’s policy. This also includes developing EU public procurement 
legislation and overseeing its implementation by Member States.
The Directorate‑General for Regional and Urban Policy is the European Commission department responsible for 
promoting economic and social development of the less -favoured regions of the European Union. This DG holds the 
portfolio for the European Regional Development Fund (ERDF) and the Cohesion Fund (CF).
Ex ante conditionalities  are conditions, based on pre -defined criteria established in partnership agreements. 
When preparing ERDF, CF and ESF OPs under the 2014-2020 programme period, Member States have to assess 
whether these conditions have been fulfilled. If they have not been fulfilled, action plans need to be prepared to 
ensure fulfilment by 31 December 2016.
06 Glossary
The aim of the European Regional Development Fund is to reinforce economic and social cohesion within 
the European Union by redressing the main regional imbalances through financial support for the creation of 
infrastructure and productive job -creating investment, mainly for businesses.
The aim of the European Social Fund is to strengthen economic and social cohesion within the European 
Union by improving employment and job opportunities, mainly through training measures, encouraging 
a higher level of employment and the creation of more and better jobs.
The purpose of  financial corrections  is to protect the EU budget from the burden of erroneous or irregular 
expenditure. For expenditure subject to shared management, recovering payments incorrectly made is 
primarily the responsibility of Member States. Financial corrections can be made by withdrawing irregular 
expenditure from Member States’ expenditure declarations or through recoveries from beneficiaries. Financial 
corrections can also be imposed by the Commission.
Fraud  is a deliberate act of deception intended for personal gain or to cause a loss to another party.
An irregularity  is an act which does not comply with EU rules and which has a potentially harmful impact on 
the EU’s financial interests. It may be the result of genuine errors committed both by beneficiaries claiming 
funds and by the authorities responsible for making payments. If an irregularity is committed deliberately it is 
classed as fraud.
A managing authority  is a national, regional or local public authority, or any other public or private body, 
which has been designated by a Member State to manage an OP . Its tasks include selecting projects to be 
funded, monitoring how projects are implemented and reporting to the Commission on financial aspects and 
results achieved.
An operational programme sets out a Member State’s priorities and specific objectives and how the funding 
will be used during a given period, generally 7 years, to finance projects. These projects must contribute 
to achieving one or more of a certain number of objectives specified at the level of the OP’s priority axis. 
Programmes have to be in place for each of the funds in the area of cohesion policy, i.e. the ERDF, the CF and the 
ESF. OPs are prepared by Member States and must be approved by the Commission before any payments from 
the EU budget can be made. They can only be modified during the period covered if both parties agree.
Partnership agreements  are entered into between the European Commission and individual Member 
States. They set out the national authorities’ plans on how to use funding from the European Structural and 
Investment Funds between 2014 and 2020. They also include, inter alia, details of any ex ante conditionalities 
and performance management frameworks.
Public procurement  is the process by which national, regional and local public authorities, or bodies governed 
by public law, purchase products, services and public works such as roads and buildings. Private undertakings 
are also subject to public procurement rules and/or principles whenever they carry out procurements which are 
predominantly publically funded or when such requirements are included in the grant agreement.
Supreme audit institutions are national bodies responsible for auditing government revenue and spending.
07
 Abbreviations
CF: Cohesion Fund
DG GROW : Directorate General Internal Market, Industry, Entrepreneurship and SMEs
ERDF : European Regional Development Fund
ESF : European Social Fund
ESIFs : European Structural and Investment Funds
OLAF : European Anti -Fraud Office
OP: Operational programme
SAI: Supreme audit institutions
TFEU : Treaty on the Functioning of the European Union
PP: Public procurement
08
 Executive  
summary
I
EU public procurement policy is a key instrument 
in establishing the single market and ensuring the 
efficient use of public funds. Within the EU, public pro -
curement is governed by the EU public procurement 
directives, establishing common rules and procedures 
which public authorities contracting works or services 
must follow.
II
For the 2007-2013 programming period, 349 bil -
lion euro was allocated in the area of cohesion policy 
through the European Regional Development Fund 
(ERDF), the Cohesion Fund (CF) and the European 
Social Fund (ESF). A significant part of this money, 
particularly for the ERDF and the CF, is spent through 
public procurement. Almost half of all projects in rela -
tion to these three funds audited by the Court over the 
2009-2013 period involved one or several tenders.
III
Failure to comply with public procurement rules has 
been a perennial and significant source of error. Ser -
ious errors resulted in a lack, or complete absence, of 
fair competition and/or in the award of contracts to 
those who were not the best bidders.
IV
This report assesses whether the Commission and 
Member States are taking appropriate and effective 
actions to address the problem of public procurement 
errors in the area of cohesion policy.V
The audit found that the Commission and Member 
States have started to address the problem, but there 
is still a long way to go in terms of analysing the prob -
lem and implementing actions.
VI
Systematic analysis of public procurement errors by 
the Commission and Member States is very limited. 
The lack of sufficiently detailed, robust and coherent 
data on the nature and extent of public procurement 
errors has precluded a comprehensive analysis of 
the underlying causes. There are signs, however, that 
some of the Member States visited for this audit are 
starting to collect data in a systematic way.
VII
The Commission has begun to put a range of actions 
in place since 2010. Legislative actions included the 
revision of the public procurement directives and 
the inclusion in partnership agreements of specific 
conditions for public procurement systems that must 
be fulfilled by Member States by the end of 2016 at 
the latest. The Commission also established, in 2013, 
an internal technical working group and drew up an 
internal action plan. However, most of the actions in 
the plan have not yet been fully implemented. Mem -
ber States only started recently to take comprehensive 
actions to prevent errors from occurring.
Executive summary 09
VIII
The Court recommends that:
(a) (i)  the Commission should develop a database 
on irregularities, capable of providing a basis 
for meaningful analysis of public procurement 
errors. It should analyse, in a comprehensive 
way, the frequency, seriousness and causes of 
public procurement errors in the area of cohe -
sion policy, based on appropriate data, drawn 
both from its own databases and provided by 
Member States. The Commission should pub -
lish its analysis as part of the public procure -
ment report required by the new directives;
(ii)  the relevant authorities in Member States 
should develop and analyse their own data -
bases on irregularities in the area of cohe -
sion policy, including those arising in public 
procurement, and should cooperate with the 
Commission to provide such data in a form 
and at a time that facilitates the Commission’s 
work;
(b) if the ex ante conditionality concerning public 
procurement is not fulfilled by the end of 2016, 
the Commission should use its powers consistently 
to suspend payments to Member States con -
cerned, until such time as they have rectified the 
shortcomings;
(c) the Commission should update and publish its 
internal action plan on public procurement. It 
should report on progress annually. To this end, 
the Commission should improve coordination 
across its departments dealing with related public 
procurement issues;(d) the Commission should set up a high -level group 
to provide leadership in tackling the problem of 
public procurement errors to avoid the risk that 
actions are not consistently implemented in all 
Commission services. The group should act as an 
advocate for improvements in public procure -
ment, including, where necessary, for simplifica -
tion in this field;
(e) the Commission should impose financial cor -
rections wherever it finds that Member States’ 
first -level checks are insufficiently effective and, 
where necessary, pursue infringements proced -
ures for breaches of the public procurement 
directives;
(f) the Commission should exploit further the oppor -
tunities provided by developments in information 
technology, including promoting e -procurement 
and data -mining tools and good practice; and
(g) Member States should exploit further the oppor -
tunities provided by e -procurement and data - 
mining tools.
10
 Introduction
01 
EU public procurement policy is a key 
instrument in establishing the single 
market and in achieving smart, sustain -
able and inclusive growth, according 
to the Europe 2020 strategy, while at 
the same time ensuring the most ef -
ficient use of public funds1. Improving 
the efficiency of public spending and 
achieving value for money are central 
objectives for government. Rules have 
been set up at various levels of govern -
ment to ensure the best possible use 
of public funds where public purchas -
ing takes place. Figure 1  shows some 
key figures. Figure 1Some key figures regarding the use of public procurement in the EU
2 406 billion euro
Total expenditure on public works,
goods and services in 2011
(i.e. around 20 % of GDP of Member States)
6.4 billion-35.5 billion euro
Annual estimated savings through having 
EU legislation on public procurement
(2014 values)
36.5 billion-66.5 billion euro
Estimate of additional annual savings that 
could be made by completing the single market
in public procurement
Source: European Parliament and European Commission2.1 COM(2010) 2020 final of 
3 March 2010, ‘Europe 2020 
— A strategy for smart, 
sustainable and inclusive 
growth’.
2 See the ‘Annual public 
procurement implementation 
review 2013’ published by DG 
Internal Market and Services 
on 1 August 2014; SMEs' access 
to public procurement markets 
and aggregation of demand in 
the EU , study prepared for the 
European Commission by 
PwC, ICF GHK and Ecorys, 
February 2014; and The cost of 
non-Europe in the single 
market: IV — Public 
procurement and concessions , 
European Parliamentary 
Research Service (EPRS), 
September 2014 — PE 
536.355.
11 Introduction
02 
Among other things, EU public pro -
curement rules aim to ensure that the 
principles and fundamental freedoms 
in the Treaty on the Functioning of the 
European Union (TFEU) are observed 
(see Figure 2 )3. This would, in turn, 
increase competition and cross -border 
trading, resulting in better value for 
money for public authorities, while 
increasing productivity in the supply 
industries and improving participation 
in and access to such markets by SMEs. 
In short, the rules exist to support the 
single market, encourage competition 
and promote value for money.03 
This report examines the consist -
ently high level of errors concerning 
public procurement in EU spend -
ing within the cohesion policy area, 
namely where the rules have not been 
properly complied with. In particular, 
the report investigates whether the 
Commission and the Member States 
are taking appropriate and effective 
actions to address the problem5.Figure 2Public procurement principles
Public procurement 
principles
Equal treatment and non-discrimination
Potential suppliers must be treated equally.Mutual recognition
Qualiﬁcations and standards from other Member States sould be given equal validity.Proportionality
Procurement procedures and decisions must beproportionate.Transparency
Contract procedures must be transparent and contract
opportunities should generally be publicised.
Source: European Court of Auditors, based on the European Commission document4.3 Freedom of movement of 
goods (Article 28 TFEU) and 
services (Article 56), freedom 
of establishment (Article 49) 
and freedom to provide 
services, non -discrimination 
and equal treatment, 
proportionality, transparency 
and mutual recognition 
(Articles 18 and 53). 
4 Commission interpretative 
communication on the 
Community law applicable to 
contract awards not or not 
fully subject to the provisions 
of the public procurement 
directives (OJ C 179, 1.8.2006, 
p. 2).
5 See also the Court’s 2014 
landscape review ’Making the 
best use of EU money: 
a landscape review of the risks 
to the financial management 
of the EU budget’ ( http://eca.
europa.eu ).
12 Introduction
The EU public 
procurement framework
04 
The EU public procurement framework 
is based on the Agreement on Govern -
ment Procurement (GPA), a multilat -
eral agreement between a number of 
World Trade Organisation members6 
that regulates the procurement of 
goods and services by public author -
ities, and which is based on the prin -
ciples of openness, transparency and 
non -discrimination. Figure 3  shows 
the governance structure of public 
procurement.05 
Within the EU, public procurement 
is governed by the EU public pro -
curement directives which establish 
common rules and procedures which 
public authorities have to follow for 
high -value procurements7. The rules 
are intended to ensure that companies 
from across the single market have 
the opportunity to compete for public 
contracts. These EU -wide rules apply 
regardless of whether the funds are 
purely national or whether EU funds 
are involved. The EU directives also 
 apply in the European Economic Area.Figure 3Governance of public procurement
Source: European Court of Auditors.  Member State speciﬁc:
     -   national
     -   regional     -   fund speciﬁc rules  European Union  World Trade Organisation
Public procurement
legislation and rulesPublic procurement
directivesAgreement on
Government Procurement6 As of the beginning of 2015, 
the GPA has 15 parties 
comprising 43 WTO members. 
Another 28 WTO members 
participate in the GPA 
Committee as observers. Out 
of these, 10 members are in 
the process of acceding to the 
agreement.
7 Directive 2004/18/EC of the 
European Parliament and of 
the Council of 31 March 2004 
on the coordination of 
procedures for the award of 
public works contracts, public 
supply contracts and public 
service contracts (OJ L 134, 
30.4.2004, p. 114), Directive 
2004/17/EC of the European 
Parliament and of the Council 
of 31 March 2004 coordinating 
the procurement procedures 
of entities operating in the 
water, energy, transport and 
postal services sector (OJ 
L 134, 30.4.2004, p. 1). These 
will be replaced by revised 
directives and a new directive 
on the award of concessions, 
which were published on 
17 April 2014 and are to be 
implemented by 18 April 2017 
(paragraph 67). Contracts for 
defence and services of 
general interest are covered 
by other rules. 
13 Introduction
06 
As with all directives, the EU public 
procurement directives have to be 
transposed, i.e. implemented, by the 
Member States into national law. 
These directives establish minimum 
standards and help create a level play -
ing field, while also giving Member 
States the possibility to react to and 
to accommodate national particular -
ities and needs. The Member States 
may choose to pass laws that are more 
specific or stricter in some respects. 
Member States also have considerable 
discretion regarding the administrative 
arrangements put in place to ensure 
compliance with EU rules.
07 
Not all procurements fall under the 
scope of EU public procurement 
directives. The EU public procurement 
directives stipulate minimum value 
thresholds8, below which contracts 
are subject only to national rules. 
In all cases however, tenders must 
comply with the treaty principles (see 
Figure 2 ).08 
Tenders within the scope of the EU 
 directives need to be published online 
in the ‘Tenders Electronic Daily’ data -
base (TED). The proportion of the value 
of tenders published in the TED to the 
gross domestic product (GDP) can be 
used as an indicator of how widely 
public procurement is used across the 
EU. In 2012, the total value of tenders 
published in TED was 3.1 % of the 
EU’s GDP9. In some Member States, 
tendering above the threshold is used 
less than this average, with rates well 
below 3.1 %, for example, in Germany 
(1.1 %), Austria (1.5 %), Ireland (1.5 %) 
and Luxembourg (1.6 %). The Com -
mission is in contact with Germany to 
ascertain the reasons for this10.
Cohesion policy and 
public procurement
09 
For the 2007-2013 programming 
period, 349 billion euro was allocated 
in the cohesion policy area via the 
European Regional Development Fund 
(ERDF), Cohesion Fund (CF) and Euro -
pean Social Fund (ESF); for 2014-2020, 
367 billion euro has been allocated11.
8 The most commonly used 
thresholds from 
1 January 2014 until 
31 December 2015 are 
5 186 000 euro for works 
contracts and 134 000 euro for 
public service and supply 
contracts. Other thresholds 
are applicable to utilities and 
sub-central contracting 
authorities.
9 See the Public procurement 
indicators 2012  — Economic 
analysis and e-procurement 
published by DG Internal 
Market and Services on 
12 November  2014.
10 Council Recommendation of 
8 July 2014 on the national 
reform programme 2014 of 
Germany and delivering 
a Council opinion on the 
stability programme of 
Germany, 2014 (OJ C 247, 
29.7.204, p. 20).
11 Commitment appropriations 
in current prices to economic, 
social and territorial cohesion. 
Source:  Multiannual financial 
framework 2014-2020 and EU 
budget 2014 — The figures , EU 
Commission’.
Source:  European Court of Auditors.
14 Introduction Figure 4Bodies playing a role in cohesion policy and public procurement
EUROPEAN
COMMISSION
MEMBER
STATES
PROJECT
LEVELDG Regional Policy DG Grow
Monitor 
and auditcompliancewith PPCohesion Policy FrameworkLegal framework on
Public Procurement (PP)
National/regional/
fund speciﬁc
 PP rules
Beneﬁciary
e.g. Ministry, public companiesERDF and
Cohesion Fund
Implemented
byDG Employment
ESFEU PP
directives
National managing
and control 
institutions 
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxTenders
Works, supplies and servicesMonitor 
and audit
compliance
with PP
Monitor 
and audit
compliance
with PPMonitor and auditcompliancewith PPImplementationmonitored
ApplyInfo’ onPP errorsInfo’ on
PP errors
Managing, Certifying and Audit Authorities
Source: European Court of Auditors.
15 Introduction
10 
The responsibility for EU spend -
ing  under cohesion policy is shared 
 between the Commission and the 
Member States (see Figure 4  and 
 Annex I ). A significant part of this 
money, in particular for the ERDF and 
CF, is spent through public procure -
ment. Almost half of all transactions 
audited by the Court in relation to 
these three funds involved one or 
 several procurements.
11 
Member States have their own public 
management and control frameworks 
in place to deal with both national 
and EU public expenditure, involving 
a wide range of public authorities, 
including supreme audit institutions 
(SAIs).Public procurement 
procedures: how do they 
work?
12 
After initial preparation of the project 
and needs assessment, public procure -
ment procedures entail three main 
phases, each with specific steps (see 
Figure 5 ).Figure 5The main phases of public procurement procedures
PreparationFinal handover report
Resolution of 
any problemsAmendments to 
contract, etc.Payments to contractor
Contract
managementSignature of contractand notiﬁcation of contract award
Opening, assessmentand evaluation
of tendersPublicationof tender
Speciﬁcationof selection/award criteriaPreparation of
tender documents
Selection ofthe type of procedureIdentiﬁcation of needProject preparationTendering procedurePre-tendering
phase
Source: European Court of Auditors.
16 Introduction
13 
The detailed stages of each phase 
depend on which specific public pro -
curement procedure is applied ( Box 1  
provides a description of the main 
types of procedure). Contracts can be 
awarded either based on price alone 
or to the bidder submitting the most 
economically advantageous tender. 
The majority of contracts (70 %) are 
awarded on the latter basis12.
The six main types of public procurement procedure under the 2014 directives
Open procedure.  The most often used, accounting for 51 % of all contracts awarded. Offers have to be sub -
mitted by a certain date and all admissible offers are evaluated13.
Restricted procedure.  Interested suppliers are first asked to provide their qualifications, then a shortlist is 
drawn up and only the shortlisted suppliers are invited to tender.
Competitive dialogue.  Used for more complex procurements. The procedure involves a dialogue between 
the contracting authority and potential suppliers, with the aim of identifying and defining the best legal and/
or financial set -up of a project to satisfy the contracting authority’s needs or objectives.
Competitive procedure with negotiation.  After a call for tender and an initial evaluation, the contracting 
authority invites its chosen economic operators to submit an initial tender. It then negotiates the initial and all 
subsequent tenders submitted, except for the final tender, with a view to improving their content.
Negotiated procedure  without publication can be used only in a small number of pre -determined cases. The 
contracting authority enters into contract negotiations with one or more suppliers.
Innovation partnership.  The contracting authority selects suppliers following an advertisement, and uses 
a negotiated approach to invite them to submit ideas to develop innovative works, supplies or services aimed 
at meeting a need for which there is no suitable existing ‘product’ on the market. The contracting authority 
can award such partnerships to more than one supplier.
13 See the Annual Public Procurement Implementation Review 2013 published by DG Internal Market and Services on 1 August 2014.Box 112 Public procurement in Europe 
— Cost and effectiveness , 
a study on procurement 
regulation, prepared for the 
European Commission by 
PwC, London Economics and 
Ecorys, March 2011, p. 5. 
17
 Audit scope and approach
14 
The Court examined whether the Com -
mission and Member States are taking 
appropriate and effective  actions to 
address the problem of public pro -
curement errors in the cohesion area, 
and sought to address the follow 
questions.
(a) Have the Commission and Member 
States analysed the problem of 
public procurement errors in cohe -
sion policy?
(b) Have the Commission and Member 
States taken appropriate action to 
address the problem and was this 
action effective?
15 
The audit covered the results of the 
Court’s statement of assurance  audits 
in the period 2009 to 2013, and took 
account of actions taken by the Com -
mission and Member States from 
2009 to 2014 to address the problem of 
non -compliance with public procure -
ment rules.16 
The audit results are based on:
(a) analysis of relevant Commission 
documentation;
(b) interviews with Commission 
officials;
(c) a survey of 115 audit authorities in 
27 Member States (not including 
Croatia) responsible for ERDF, ESF 
and CF operational programmes 
(OPs), 69 of which replied — the 
main objective of the survey was 
to collect information concerning 
the public procurement frame -
work, the public procurement er -
rors detected and preventive and 
correct  ive actions taken at national 
level;
(d) visits to four Member States (the 
Czech Republic, Spain, Italy and 
the United Kingdom), in which 
high numbers of public procure -
ment errors had been detected in 
the Court’s statement of assurance 
audits in the period 2009 to 2013;
(e) a visit to Cyprus, focusing on the 
use of e -procurement; and
(f) a short survey sent to the 28 SAIs 
in the EU, 18 of which replied.
17 
The audit sought, where possible, to 
identify good practices which could be 
shared amongst Member States.
18
 Observations
18 
The observations are set out in two 
sections:
(a) the first section presents the sum -
mary of the Court’s procurement-
related audit findings as regards 
the ERDF, CF and ESF from 2009 to 
2013, and examines whether the 
Commission and Member States 
have a  robust analytical basis  for 
understanding the problem of 
public procurement errors; and
(b) the second section describes the 
actions taken  by both the Com -
mission and Member States in 
recent years and evaluates, where 
possible, their effectiveness.Systematic analysis of 
public procurement errors 
by the Commission and 
Member States is very 
limited
Failure to comply with public 
procurement rules is still 
a significant source of error 
in the area of cohesion policy
What constitutes an error?
19 
An error occurs when EU and/or na -
tional public procurement rules were 
not complied with. For the purposes 
of this report, three types of error are 
distinguished, as illustrated in Table 1 .Table 1Typology of errors used in this report, with examples1
Type of error Description Examples
SeriousA serious breach of the rules, with the result that 
competition was impeded and/or contracts were 
deemed to have been awarded to those who were 
not the best bidders(a)  direct award — contract awarded without recourse to a public 
procurement procedure where it should have been;
(b)  award of significant and/or foreseeable additional works or services 
without recourse to a public procurement procedure where it 
should have been;
(c)  unlawful selection/award criteria or incorrect application thereof, 
resulting in a  different outcome of the tender.
SignificantA significant breach of the rules, but nevertheless it 
is deemed that the contracts were awarded to the 
best bidders(a)  unlawful selection/award criteria or incorrect application thereof, 
but not resulting in a  different outcome of the tender;
(b)  not all selection/award criteria are published in the tender 
specification;
(c) limited competition due to unjustified urgency.
MinorLess serious, and often formal, errors, which did 
not have a detrimental impact on the level of 
competition(a)  publishing the contract award notice later than required, or not at 
all;
(b) failure to publish such a notice in the EU’s Official Journal.
1  In the context of the Court’s statement of assurance, errors described here as serious are referred to as ‘quantifiable’ errors. These errors con -
tribute to the Court’s estimated error rate. See the Court’s annual report 2013, Annex 1.1 (OJ C 398, 12.11.2014).
Source: European Court of Auditors.
19 Observations
Errors detected by the Court 
in its Statement of Assurance 
audits 2009 ‑2013
20 
Over the 2009-2013 period, as part 
of its annual Statement of Assurance 
work, the Court examined more than 
1 400 transactions14 co-financed from 
the EU budget through the ERDF, CF 
and ESF, including verifying public pro -
curement procedures relating to nearly 
700 projects. Errors relating to public 
procurement were detected in around 
40 % of all of these projects. In total, 
nearly 590 errors were detected. Fig -
ure 6  shows the distribution of these 
errors according to their seriousness.21 
The serious errors accounted for 48 % 
of the Court’s estimated error rate for 
the ERDF and CF and 16 % for the ESF 
over the 2009-2013 period. The big -
gest share of serious  errors, 70 %, was 
detected in the ERDF. This is, in part, 
because ERDF and CF programmes 
generally involve larger infrastructure 
projects in which contracts are often 
subject to public tendering proced -
ures15. Annex II  gives summary details 
of how errors are distributed across 
the three funds: ERDF, CF and ESF.Figure 6Distribution of errors found in the Court’s Statement of Assurance audits 2009 ‑2013, 
in the area of cohesion policy, according to their seriousness
Source: European Court of Auditors.14 Generally, one transaction 
relates to one project. But, in 
certain cases, several 
transactions can relate to one 
project.
15 ESF co-financed projects often 
include services, such as 
vocational education and 
training, that are not fully 
within the scope of the 
directive (Annex II B of 
Directive 2004/18/EC; 
amended by Annex VII of 
Commission Regulation (EC) 
No 213/2008 of 
28 November  2007 amending 
Regulation (EC) No 2195/2002 
of the European Parliament 
and of the Council on the 
common procurement 
vocabulary (CPV) and 
Directives 2004/17/EC and 
2004/18/EC of the European 
Parliament and of the Council 
on public procurement 
procedures, as regards the 
revision of the CPV (OJ L 74, 
15.3.2008, p. 1)).
Minor errors (22 %)
Signiﬁcant errors (49 %)Serious errors (29 %)
20 Observations
22 
Errors were detected throughout the 
procurement phases, with the biggest 
share of serious errors detected in the 
pre-tendering phase.
(a) In the pre-tendering phase , most 
errors detected, 71 (82 %) out of 
87, were serious . Contracting 
authorities avoided procure -
ment procedures altogether by 
awarding contracts directly where 
a procurement procedure should 
have been carried out, or split 
contracts into smaller tenders to 
avoid exceeding thresholds, or used an inappropriate procedure. 
Many contracts that were directly 
awarded in this way involved the 
provision of services rather than 
works (see example in Box 2 ).
(b) In the tendering phase , most 
serious  errors were detected in 
the specification and application 
of selection/award criteria. Errors 
relating to publication and trans -
parency requirements accounted 
for the highest number of errors 
overall (186 out of 587 errors), 
a third of which were significant  
(see example in Box 3 ).
Example of a serious error where there was a complete absence of public 
procurement
In an ERDF project in Poland , whose objective was to build a bypass road for a major city, the contracting 
authority decided to award, via negotiated procedure with one economic operator, a contract concerning 
‘author supervision’ by the architect16. An open or restricted procedure allowing for a competition with more 
than one bidder should have been used. The contracted value was around 300 000 euro.
16 ‘Author supervision’ guarantees the exact execution of the project, adherence to architectural, technological, stylistic and construction rules and 
norms and preparation of the project documentation to put the project into operation.
Example of significant error where advertising and transparency requirements 
were not complied with
In the Czech Republic , for a motorway construction project that 
received approximately 87 million euro under the CF, the con -
tracting authority did not specify in the tender notice the mini -
mum requirements regarding technical competence. As a result, 
transparency and advertising requirements were not respected.
© Road and motorway department of the Czech Republic.Box 2 Box 3

21 Observations
(c) In the contract management  
phase , 31 (42 %) out of the 74 
 errors detected were serious  and 
concerned modifications or exten -
sions to the scope of contracts 
without using a procurement 
procedure where such a proced -
ure was required (see example in 
Box 4 ).
23 
Annex III  provides additional infor -
mation on the distribution of errors 
throughout the different phases of 
pre-tendering, tendering and contract 
management.
24 
The Court’s Special report on causes 
of errors in rural development shows 
a similar picture. A significant number 
of public procurement errors were due 
to unjustified direct award, misapplica -
tion of selection and award criteria and 
lack of equal treatment of tenderers17.
Example of a serious error concerning modifications to the scope of the contract
In Spain , a contract for the construction of a waste water treatment installation, which received approximately 
33 million euro under the ERDF, was initially tendered and awarded correctly. Subsequently, more than half of 
the contracted works were replaced with other works involving different technologies, materials and quanti -
ties. Although the purpose of the project and the overall price did not change, the works eventually done 
were substantially different from those originally tendered. Consequently, more than half of the final works 
had not been through the tendering procedure.Box 417 Special Report No 23/2014, 
‘Errors in rural development 
spending: what are the causes 
and how are they being 
addressed?’ ( http://eca.
europa.eu ).
22 Observations
There are various causes of 
public procurement errors
Complexity, lack of 
administrative capacity and 
insufficient planning
25 
A certain level of complexity is in -
herent in any public procurement 
system. However, the current level of  
complexity  of the legal and adminis -
trative framework is viewed as a prob -
lem. According to 90 % of 69 audit 
authorities who responded to the survey carried out for this audit (see 
paragraph 16), the legal framework for 
public procurement in their country 
is more complex than it needs to be. 
Survey respondents noted that errors 
are mainly caused by a high volume 
of legislation and/or guidelines, the 
difficulty of applying them in practice 
and a lack of expertise in carrying out 
the public procurement procedure. 
Nearly half of respondents noted that 
the main area for improvement of 
public procurement practice could be 
the simplification of procedures. See 
Box 5  for a view on the situation in one 
of the Member States visited for the 
audit.
The problem of complexity and high volume of legislation: example from 
a Member State
Authorities in Italy  interviewed for this audit regarded the legislative framework of public procurement as 
complex due to the breadth and depth of legislation and the complexity of the procedures set out for both 
the contracting authorities and the tendering companies involved. In addition, the main Italian law on pub -
lic procurement has been frequently amended, complicating application. According to the Italian Anti -cor-
ruption Authority, the principal changes to the main legislative acts on public procurement since 2009 are 
contained in 22 legislative acts. The high volume of legislation is increased by having fund-specific rules on 
public procurement — for example, the Ministry of Employment decision laying down additional provisions 
concerning public procurement for contracts below the thresholds for ESF co -financed projects. In June 2014, 
a working group composed of Italian and Commission representatives was set up to support simplification in 
the context of the transposition of the 2014 EU directives into national legislation.Box 5
26 
Lack of  administrative capacity  relates 
to a lack both of knowledge of the 
rules and of technical expertise con -
cerning the specific works or services 
being procured. This problem relates 
not only to contracting authorities but 
also to the authorities with responsibil -
ity for monitoring these procedures. The Court’s experience when auditing 
public procurement errors suggests 
that problems of non -compliance are 
related to weak implementation of 
existing rules18. Clerical mistakes also 
lead to errors. See Box 6  for an exam -
ple from one of the Member States 
visited for the audit.18 See the Court’s Opinion 
No 4/2011 on the 
Commission’s Green Paper on 
the modernisation of public 
procurement policy (OJ C 195, 
2.7.2011, p. 1) and its recent 
landscape review ‘Making the 
best use of EU money: 
a landscape review of the risks 
to the financial management 
of the EU budget’, paragraph 
30 and individual fact sheet 
therein on procurement, 
paragraph 16 ( http://eca.
europa.eu ).
23 Observations
27 
Insufficient planning  of projects and 
tendering procedures is also a cause 
of error, particularly those occurring 
in the contract management phase 
regarding modification of or extension 
to contracts.
The EU directives are not 
always correctly transposed by 
Member States
28 
Each Member State is required to 
transpose the EU public procurement 
directives into national legislation. When the Commission deems that the 
transposition is not in line with the dir -
ectives or the main principles are not 
followed, it may initiate an infringe -
ment procedure19 and, ultimately, 
refer the case to the Court of Justice 
of the European Union. The Commis -
sion opened 74 such procedures in the 
2009-2013 period, of which eight had 
been referred to the Court of Justice 
of the European Union by the end of 
2014 (see Annex IV  for an analysis of 
these procedures by Member State 
each year). Such incorrect application/
transposition can also lead to errors 
(see Box 7  for an example).
Challenges regarding administrative capacity: examples from a Member State
In Italy , the risk that many contracting authorities lack expertise has been exacerbated by the very high num -
ber of such authorities. There are 40 000 contracting authorities, and 70 000 if all cost centres are counted. For 
specific categories of goods and services, recent Italian legislation provides for a significant reduction in the 
number of contracting authorities, thereby concentrating public procurement expertise within fewer con -
tracting authorities.
Example of errors due to incorrect transposition of the directives into national law
In Spain , inadequate adaptation of the 2004 directives into Spanish legislation caused frequent errors with 
regard to contract amendments. The Spanish authorities decided therefore that costs of contract amend -
ments were no longer eligible for EU co -financing. Only in 2012, following the modification of legislation, 
were certain contract amendments, under specific circumstances, considered to be eligible once again by the 
Spanish authorities.Box 6 Box 719 Considering Article 258 TFEU 
defines an infringement as 
a failure of a Member States to 
fulfil an obligation under the 
Treaties.
24 Observations
Interpretation of the legislation 
is sometimes inconsistent
29 
Errors can also stem from differences 
in the interpretation of legal provi -
sions. For example:
(a) In the Czech Republic, authorities 
reported that different interpreta -
tions of the same issue between 
different bodies — e.g. managing 
authorities, audit authorities, the 
SAI, public procurement offices, 
the European Commission — led 
to differing audit results and legal 
uncertainty.
(b) In Italy, there are differing inter -
pretations amongst contracting 
authorities of the concept of what 
constitutes an unforeseeable event 
that could justify the modifica -
tion of a contract without using 
a public procurement procedure. 
As a result, some national authori -
ties consider that certain contract modifications comply with na -
tional rules, whilst audit authori -
ties and the Commission consider 
the same modifications to be 
irregular. Errors relating to such 
cases are a very important reason 
for financial corrections in Italy: in 
the years 2010 to 2012, the value 
of these corrections was around 
8 million euro. At the time of the 
audit, Italy was seeking to address 
this problem in the framework of 
its national public procurement 
action plan (see paragraph 65).
Member States sometimes 
complicate the framework with 
additional regulation
30 
Some Member States put in place, at 
national level, rules that go beyond the 
EU directives regarding certain aspects 
of public procurement (see Box 8 ).
Example of national procurement rules which go beyond the requirements of the 
EU Directives
In the Czech Republic , national law sets a 20 % limit for increasing the value of a contract due to unforesee -
able circumstances, in contrast to the 50 % limit set in the EU directive. While the Czech Republic’s objective 
was to increase transparency, some of its economic operators and contracting authorities consider this an 
unnecessary complication.Box 8
25 Observations
Fraud can be a cause of error in 
the public procurement arena
31 
According to the OECD, ‘public pro -
curement is the government activity 
most vulnerable to waste, fraud and 
corruption due to its complexity, the 
size of the financial flows it generates 
and the close interaction between the 
public and the private sectors’20.
32 
There is a legal obligation for Member 
States to report to the Commission 
quarterly all irregularities exceeding 
10 000 euro, indicating those where 
they suspect fraud to have been 
involved21. The European Anti -Fraud 
Office (OLAF) collects this information 
on behalf of the Commission through 
its Irregularity Management System 
(IMS). The information reported by 
Member States comprises all types of 
irregularities, including those related to public procurement. Based on this 
information, the Commission prepares 
its annual report on the protection 
of the EU’s financial interests and the 
fight against fraud22.
33 
Concerning cohesion policy, in the 
per iod 2007 to 2013, 38 % of the 
approximately 12 000 irregularities 
reported by the Member States to 
OLAF related to public procurement. 
Of the irregularities relating to public 
procurement, 2 % were reported to be 
linked to fraud (see Figure 7 ). Some 
Member States report to OLAF very 
few irregularities which they consider 
as fraudulent. For example, Spain and 
France did not report any irregularities 
relating to public procurement linked 
to fraud between 2007 and 2013.Figure 7Irregularities reported by Member States to OLAF on behalf of the Commission via 
IMS for 2007 ‑2013 programming period
Source: OLAF.
Irregularities relating to 
public procurement 38 %
of which linked to fraudOther irregularities 62 %
of which linked to fraud20 OECD Fighting corruption in 
the public sector: integrity in 
procurement (www.oecd.org/
gov/ethics/
integrityinpublicprocurement.
htm).
21 Commission Regulation (EC) 
No 1828/2006 of 
8 December 2006 setting out 
rules for the implementation 
of Council Regulation (EC) No 
1083/2006 laying down 
general provisions on the 
European Regional 
Development Fund, the 
European Social Fund and the 
Cohesion Fund and of 
Regulation (EC) No 1080/2006 
of the European Parliament 
and of the Council on the 
European Regional 
Development Fund, Article 28.
22 See SWD(2014) 244 final of 
17 July 2014, ‘Statistical 
evaluation of irregularities 
reported for 2013 own 
resources, natural resources, 
cohesion policy, pre-accession 
and direct expenditure’, p. 67, 
accompanying COM(2014) 474 
final of 17 July 2014 ‘Protection 
of the European Union's 
financial interests — Fight 
against fraud annual report 
2013’.
26 Observations
34 
The Court refers any project which it 
suspects has been affected by fraud to 
OLAF. The Court referred to OLAF 17 
such projects, six of which related to 
public procurement, as a result of its 
work on its Statement of Assurance on 
the area of cohesion policy in respect 
of the period from 2009 to 2013. OLAF 
opened an investigation for 10 of the 
17 projects, of which five related to 
public procurement.
Comprehensive analysis 
of errors in Member States 
is precluded by a lack of 
coherent data …
35 
The Court also sought to determine 
whether the nature, seriousness and 
cause of public procurement errors in 
the cohesion area had been robustly 
analysed by the Commission and the 
Member States. Regularly carrying out 
such an analysis of why public procure -
ment errors occur is necessary to allow 
the Commission and Member States 
to design and implement measures 
effectively to correct and prevent such 
errors.36 
Data related to public procurement 
errors within Member States is often 
scattered across several institutions. It 
is also not shared systematically with 
other institutions within the Member 
State which, whilst not directly in -
volved in managing the ERDF, ESF and 
CF, are still relevant to their implemen -
tation, for example those involved in 
public procurement legislation. This 
increases the risk that a complete pic -
ture of the trends and problems, which 
could help inform the development of 
preventive actions, is not available in 
a certain Member State. Interdepart -
mental working groups have been 
 created in Italy, the Czech Republic 
and the United Kingdom to address 
this risk (see paragraph 82).
37 
Respondents to the survey of audit 
authorities identified similar issues to 
those which arose from the Court’s 
analysis of its own data as regards the 
types and seriousness of public pro -
curement errors (see paragraph 20). 
However, the Member States have 
carried out very limited systematic and 
comprehensive analysis of public pro -
curement errors to inform their views. 
While 60 out of the 69 audit authorities 
which responded to the survey stated 
that they analyse public procurement 
errors, only 14 were able to provide 
structured data regarding public 
procurement errors detected in recent 
years. Half of these were from Italy, 
the others were from Belgium, Latvia, 
Lithuania, the Netherlands and Spain.
27 Observations
38 
The Court found the following in the 
four Member States visited that:
(a) Member States’ authorities imple -
menting cohesion policy rarely 
investigated the underlying causes 
of errors;
(b) only in Italy has there been any 
analysis focusing specifically on 
public procurement errors. The 
national coordination body of the 
audit authorities made an analysis 
of the main source of errors in Italy, 
namely modification of contracts 
and additional works.
39 
The lack of sufficiently detailed and co -
herent data on the nature and extent 
of public procurement errors within 
the Member States has precluded 
a comprehensive, robust analysis of 
the underlying causes at national and 
EU level.
40 
Eighteen of the 28 Member State SAIs 
responded to the Court’s survey (see 
paragraph 16) regarding the question 
of whether they perceive public pro -
curement procedures financed only 
with national funds to be less or more 
error prone compared to procedures 
co-financed with EU funds, or whether 
they perceive no significant difference. 
Of these:
(a) 13 stated that ‘there is no signifi -
cant difference’ compared to pro -
cedures co -financed with EU funds;(b) two stated that public procure -
ment procedures financed with 
only national funds are more prone 
to errors than public procedures 
financed with EU funds as well;
(c) three stated that they could not 
comment since they have not com -
pared the error findings, or have 
no reliable indication of the pos -
sibility of error since their audits 
mainly relate to national funding 
of awards of contracts.
… but there are signs, in 
the Member States visited, 
that data are starting to 
be collected in a more 
systematic way
41 
In the four Member States visited for 
this audit:
(a) Three Member States — Italy, the 
Czech Republic and Spain — have 
set up databases in recent years 
(see Box 9 ). Such databases could 
facilitate more comprehensive and 
regular analysis, thereby further -
ing the understanding of public 
procurement errors as a basis 
for designing appropriate meas -
ures to address problems (see 
paragraph 89);
(b) In the United Kingdom, no such 
database was yet in place. The 
ERDF managing authority for Eng -
land has foreseen the inclusion of 
detailed public procurement error 
information in its management 
information system for the 2014-
2020 programming period.
28 Observations
Use of structured public procurement error databases in the Member States
In Italy , the Coordination body of the ERDF and ESF audit authorities has complemented its general audit 
database with details of the types of all public procurement errors. The database contains all such errors de -
tected since 2010. For each error type and for each audit authority, the database shows the number of errors 
detected, together with any related financial correction. The Italian Court of Auditors also uses its database of 
irregularities as a tool for risk assessment in the field of public procurement.
In the Czech Republic , since 2013, the audit authority has recorded its public procurement findings in a struc -
tured database, which it uses to carry out analysis and shares the results with other institutions.
In Spain , starting with the early years of the 2007-2013 programming period, the audit authority’s database 
contains details of the public procurement errors it detects. However, at the time of the audit, this database 
had not yet been used to analyse the nature of such errors in depth.Box 9
The Commission does not 
yet comprehensively and 
systematically analyse public 
procurement errors
42 
The Court examined whether the 
Commission has been collecting data 
and building databases to facilitate the 
analysis of public procurement errors.
43 
DG Internal Market, Industry, Entrepre -
neurship and SMEs (DG GROW) moni -
tors key indicators regarding the use of 
public procurement in Member States 
using the TED database, such as the 
proportion of GDP which is subject to 
tender or national public expenditures 
spent on public procurement accord -
ing to EU rules (see paragraph 8).44 
DG Regional and Urban Policy and DG 
Employment, Social Affairs and Inclu -
sion receive information about public 
procurement errors in cohesion policy 
spending from the following four main 
sources.
(a) The annual control reports submit -
ted to the Commission by Member 
States’ audit authorities23. How -
ever, the information on public 
procurement errors is not provided 
in a way which would allow the 
Commission to perform a compre -
hensive analysis on these errors.
(b) The Commission’s own audits, 
in which the nature, seriousness 
and causes of public procurement 
errors are analysed in projects 
co-financed by ERDF/CF and ESF.
(c) Bilateral meetings with national 
authorities, in particular audit 
authorities.
(d) Audits carried out by the Court as 
part of its annual Statement of As -
surance work.23 See Special Report No 16/2013 
‘Taking stock of “single audit” 
and the Commission’s reliance 
on the work of national audit 
authorities in cohesion’ ( http://
eca.europa.eu ).
29 Observations
45 
Up to now, the Commission has carried 
out one horizontal analysis focus -
ing on public procurement errors, in 
May 201124. This analysis, done by DG 
Regional and Urban Policy, made use 
of the Commission’s own audits and 
those performed by the Court, and 
showed general trends in errors de -
tected in the ERDF and CF — the ESF 
was not included — in the period from 
2007 to 2010. Neither DG Regional 
and Urban Policy nor DG Employment, 
Social Affairs and Inclusion has carried 
out such an analysis since.
46 
Whilst the Commission has a certain 
amount of data available about public 
procurement errors from across the 
area of cohesion policy, it has not yet 
developed a robust, comprehensive 
database of all public procurement 
errors. DG Regional and Urban Policy 
had a database in place which includ -
ed details of most audit findings from 
the ERDF and CF, including regarding 
public procurement, however this 
covered 2010 and 2011 only.
47 
DG Employment, Social Affairs and 
Inclusion considers that the devel -
opment of a dedicated database of 
public procurement errors in the ESF 
is not merited because of the lower 
impact such errors have in the ESF 
compared to the ERDF and CF (see also 
paragraph 21). Therefore, it has not 
performed any horizontal analysis and 
does not plan to establish a database 
of public procurement errors for the 
ESF.48 
A database of irregularities, including 
those arising in public procurement, 
would be a valuable asset to the Com -
mission, providing insight into the 
nature, extent and causes of errors, 
so that the actions it takes can be 
targeted or adapted as needed. Since 
2008, OLAF has had a database known 
as the IMS. Member States report to 
OLAF, through this system, information 
about irregularities (see paragraph 
33). The information contained in the 
IMS about public procurement errors 
does not, however, allow for a mean -
ingful analysis of the nature, extent or 
underlying causes of errors. When it 
produced its 2011 reports, the Com -
mission did not use the IMS system to 
analyse public procurement errors in 
Member States. Since then, the data 
reported by Member States via the IMS 
have never been used by the Commis -
sion to analyse public procurement 
errors.24 ’Working document prepared 
by DG Regional Policy on the 
main audit findings regarding 
application of public 
procurement rules in Member 
States found in projects 
co-financed by ERDF and the 
Cohesion Fund under 
cohesion policy’ (CC/2011/08 
EN), not publicly available. The 
results of this analysis were 
used again in the Commission 
staff working paper ‘Analysis 
of errors in cohesion policy for 
the years 2006-2009 — 
actions taken by the 
Commission and the way 
for ward ’ (SEC(2011)1179),  
published on 5 October 2011.
30 Observations
The Commission and 
Member States have 
started to implement 
actions to address the 
problem, but there is still 
a long way to go
49 
The Court sought to determine 
whether the Commission and Mem -
ber States have taken appropriate 
actions to address the problem of 
public procurement errors in the area 
of cohesion policy. Such actions could 
be either generally preventive in 
nature — measures aimed at stopping 
errors occurring in the first place — or 
corrective in nature — aiming to limit 
the impact on the EU budget of any 
errors detected. Relevant prevent -
ive actions in this context could be 
legislative actions, i.e. pertaining to 
the establishment and enforcement of 
legal provisions, or management and 
control system -related actions, such 
as measures to improve administrative 
capacity, which do not entail a legisla -
tive element.
50 
This part of the report identifies and, 
where possible, assesses the actions 
taken by the Commission and in the 
four Member States visited during the 
audit.Actions taken by the 
Commission since 2010 have 
begun to target the overall 
problem
51 
In its reports and opinions, the Court 
has identified specific problems with 
compliance with the EU and national 
public procurement rules in cohesion 
as early as 200625. Informed by its work 
in preceding years26, the Commission 
started to develop specific actions 
aimed at addressing the overall prob -
lem during 2010 and 2011.
52 
Figure 8  shows how the Commission’s 
actions have developed since 2010.25 See, for example, the Court’s 
Annual report on the 
implementation of the budget 
concerning the financial year 
2006 (OJ C 273, 15.11.2007), the 
Court’s Annual report on the 
implementation of the budget 
concerning the financial year 
2009  (OJ C 303, 9.11.2010), 
Opinion No 1/2010 ‘Improving 
the financial management of 
the European Union budget: 
Risks and challenges’, 
paragraph 6 ( http://eca.
europa.eu ). 
26 Commission work on the 
problem of public 
procurement errors in 
cohesion prior to 2010 
included ad hoc corrective 
actions, including financial 
corrections, targeted at 
specific Member States and 
the issuance of guidance to 
Member States on the 
application of financial 
corrections in respect of 
public procurement errors.
31 Observations Figure 8
Source: European Court of Auditors.20142012-2013
 ESIF 2014-2020 regulation comes into force, with ex-ante conditionality concerning public
 procurement, deadline end 2016 New public procurement directives adopted, to be transposed into national legislation by 18 April 2016
 DG Regional and Urban Policy directors endorse the internal action plan drawn up by the
 internal working group Commission publishes guidance on how to avoid public procurement errors
 DG Internal Market, Industry, Entrepreneurship and SMEs focuses resources on small number of Member States to help them improve management of public procurement  Commission ﬁnancial corrections and interruptions in cohesion policy area continue
 Commission-developed Arachne data-mining IT tool is rolled out Ex-ante conditionality for public procurement included in adopted ESIF regulation 2014-2020
 DG Regional and Urban Policy sets up internal team to provide support on administrative capacity to Member States DG Internal Market and Services initiates action-oriented approach to Member States’ public    procurement systems to complement infringements procedures Commission internal working group develops 12 point plan with range of actions Commission ﬁnancial corrections and interruptions in cohesion policy area continue
 Commission decision on guidelines for ﬁnancial corrections to be made by the Commission to expenditure  ﬁnanced by the Union under shared management, for non-compliance with the rules on public procurement2010-2011
 Commission starts developing revised public procurement directives DG Regional and Urban Policy produces a working document analysing public procurement errors in Member States in ERDF and Cohesion Fund Commission ﬁnancial corrections and interruptions in cohesion policy area continue
 Commission proposal for regulation for 2014-2020 period includes ex-ante conditionality relating to public procurementCommission’s actions: Main developments in recent years
32 Observations
53 
In 2010, as preparation for proposing 
new public procurement directives, 
the Commission conducted a compre -
hensive evaluation of the impact and 
effectiveness of EU public procure -
ment27 and a public consultation28. 
The Court published an opinion as 
a contribution to the debate about the 
revision of the directives29 (see also 
paragraph 67).
54 
In the area of cohesion policy specifi -
cally, in 2011, the Commission:
(a) issued its proposal for a regulation 
for the European Structural and 
Investment Funds (ESIFs) 2014-
2020, which included, inter alia, an 
ex ante conditionality relating to 
Member State public procurement 
frameworks (see paragraph 62)30;
(b) completed a working document 
which analysed public procure -
ment errors and identified some 
actions that could be carried out 
(see paragraph 45) — this docu -
ment did not contain an action 
plan;
(c) used financial corrections and pay -
ment interruptions more exten -
sively; and
(d) organised training seminars in four 
Member States.Public procurement action plan 
put in place by the Commission 
in 2013
55 
At the beginning of 2013, DG  Regional 
and Urban Policy established a dedi -
cated internal unit described as 
‘competence centre — administrative 
capacity’, whose aim was to increase 
the absorption of money from the EU 
Structural Funds by improving the 
administrative capacity of Member 
States. One aspect within the remit of 
this unit was to address the problems 
surrounding the capacity to oper -
ate public procurement procedures 
effectively.
56 
At around the same time, the Com -
mission set up an internal technical 
working group on ‘Improving public 
procurement linked to the manage -
ment of ESI funds’, which met for the 
first time in September 201331. In Janu -
ary 2014, during one of their regular 
meetings, DG Regional and Urban 
Policy senior management endorsed 
an action plan drawn up by the group 
including a list of 12 non -legislative 
actions to be implemented by the 
Commission, aimed at improving 
administrative capacity in Member 
States. The plan included those ac -
tions already being implemented by 
the Commission, together with ideas 
for new actions that the Commission 
could launch. Table 2  lists the actions 
and shows the status of each by the 
end of 2014.27 Covering mainly the cost and 
effectiveness of procurement 
procedures, issues of 
cross-border procurement, 
SMEs’ access to public 
procurement markets and the 
strategic use of public 
procurement in Europe. 
28 Based on COM(2011) 15 final of 
27 January  2011 ’Green Paper 
on the modernisation of EU 
public procurement policy 
— Towards a more efficient 
European procurement 
market’.
29 Opinion No 4/2011. 
30 COM(2011) 615 final of 
6 October 2011, ‘Proposal for 
a regulation of the European 
Parliament and of the Council 
laying down common 
provisions on the European 
Regional Development Fund, 
the European Social Fund, the 
Cohesion Fund, the European 
Agricultural Fund for Rural 
Development and the 
European Maritime and 
Fisheries Fund covered by the 
common strategic framework 
and laying down general 
provisions on the European 
Regional Development Fund, 
the European Social Fund and 
the Cohesion Fund and 
repealing Regulation (EC) No 
1083/2006’. A regulation based 
on this proposal was adopted 
by the Parliament and the 
Council in 2013 (Regulation 
(EU) No 1303/2013).
31 The technical working group 
was attended by officials from 
the three main directorates-
general (DG Regional and 
Urban Policy, DG Employment, 
Social Affairs and Inclusion, DG 
Internal Market and Services) 
and also the European 
Investment Bank, DG 
Agriculture and Rural 
Development and DG 
Maritime Affairs and Fisheries, 
chaired by a DG Regional and 
Urban Policy official, usually by 
the head of unit responsible 
for the Competence Centre 
team. The working group has 
continued to meet and, at the 
time of writing, had met a total 
of 10 times.
33 Observations Table 2 Internal Commission public procurement action plan endorsed by DG Regional and 
Urban Policy directors in January 2014
Actions Description State of play as at end 2014Short‑term1Stocktaking/analysis of current Member State performance in capacity 
building, including assessment of what has worked, good examplesProcurement for expert launched
2Compilation and analysis of evidence and indicators on public procurement 
performance as input for ex ante conditionality negotiationsInformation gathered during ex ante conditionality nego -
tiations, assessment grid prepared showing compliance 
with ex ante conditionality by Member States
3Preparation and dissemination of practical guidance on ‘How to avoid 
common errors’Guidance note drafted
4 Country-specific action plans for Member States with identified weaknessesDG GROW 
working with four Member States
5 Training/guidance on how to prepare and follow up action plans To be linked with action 1Medium‑term6Preparation for new public procurement directives by giving training to 
managing authorities, including 10 workshops on anti -corruption Ad hoc presentations by DG Internal Market and Services in 
Member States
7 Transparency initiative against corruption Contract on a first pilot phase is under signature
8Assessment of current practices and need for professional training and 
qualifications in public procurement for fund managersInternal preparation ongoing
9Targeted support for specific Member States to assist by learning by doing, 
twinning or other expert supportIn pilot phase, being launched
10Study on how public procurement can be used as a strategic tool, e.g. 
e-procurementNot launched yetLong‑term11Public procurement quality management systems (review of experience 
and assessment of scope for developing EU -wide standards for ESIF)Not launched yet
12Guide -to-guidance (evaluation why some guidance does not improve 
performance)Not launched yet
Source: European Commission, European Court of Auditors.
34 Observations
57 
The action plan was a first attempt 
to bring together the non -legislative 
actions in a coherent way. Of the 12 
actions in the plan, eight had not yet 
been fully implemented by the end 
of 2014, being either in their prepar -
ation stages or yet to be started at all. 
Three of the actions had been fully 
implemented:
(a) compilation and analysis of 
evidence and indicators on public 
procurement performance as input 
for ex ante conditionality negotia -
tions (action 2);
(b) guidance note on the avoidance of 
common errors in ESI-funded pro -
jects (action 3) providing compre -
hensive material for practitioners; 
and
(c) training on anti -corruption for 
managing authorities in 10 Mem -
ber States as part of preparing the 
new public procurement directives 
(action 6).58 
The establishment of the working 
group and the action plan suggests 
improved coordination within the 
Commission. However,
(a) the action plan has only been 
endorsed by one Commission 
department (DG Regional and 
Urban Policy) and not by other 
directorates- general involved in 
the working group. It has not been 
published by the Commission, so 
transparency, ownership and ac -
countability for the plan has been 
limited.
(b) the working group was established 
at a technical staff working level 
within the Commission.
59 
Because most of the actions have 
not yet been fully implemented, the 
impact of the action plan cannot be 
assessed at this stage.
60 
The above indicates some identifica -
tion of non -legislative issues, and 
potential progress on them. But it also 
indicates that the Commission has 
not yet shown high -level, coordinated 
leadership on this issue.
35 Observations
If correctly applied, new 
legislation has the potential 
to help address the problem 
of public procurement errors
The 2014 ‑2020 ESIF regulation 
and ex ante conditionality
61 
The new legal framework for the ESIFs 
2014-2020 introduces ex ante condi -
tionalities. These are conditions, based 
on pre -defined criteria, which are 
regarded as necessary prerequisites 
for the effective and efficient use of 
EU support covered by the partnership agreements. A Member State’s public 
procurement system is one area for 
which such conditions are included 
(see Figure 9 ). Member States were 
required to carry out a self -assessment 
on how and whether they meet the 
conditions32, and to include a summary 
thereof in the partnership agreements 
which they submitted in 2014. If the 
Commission deems that a Member 
State has not, by 31 December 2016, 
met the stipulated conditions, the 
Commission can suspend payments to 
the Member State33.Figure 9Ex ante conditionality criteria regarding public procurement
Arrangements to ensure administrative
capacity for implementation and
application of Union public procurement rulesArrangements for training and dissemination
of information for staﬀ involved in the
implementation of the ESI fundsArrangements which ensure transparent
contract award procedures
Ex ante conditionality: the existance
of arrangements for the eﬀective application
of Union public procurement law in the
ﬁeld of the ESIFs’Arrangements for the eﬀective application 
of EU public procurement rules through
appropriate mechanisms
Source: Annex XI of Regulation (EU) No 1303/2013.32 Article 2(33), Article 19 and 
Annex XI of Regulation (EU) 
No 1303/2013 of the European 
Parliament and of the Council 
of 17 December 2013 laying 
down common provisions on 
the European Regional 
Development Fund, the 
European Social Fund, the 
Cohesion Fund, the European 
Agricultural Fund for Rural 
Development and the 
European Maritime and 
Fisheries Fund and laying 
down general provisions on 
the European Regional 
Development Fund, the 
European Social Fund, the 
Cohesion Fund and the 
European Maritime and 
Fisheries Fund and repealing 
Council Regulation (EC) No 
1083/2006 (OJ L 347, 
20.12.2013, p. 320).
33 Article 19 of Regulation (EU) 
No 1303/2013.
36 Observations
62 
According to the Commission, the 
introduction of ex ante conditional -
ity has the potential to reduce errors 
and to improve public procurement, 
because it provides an incentive for 
Member States to put in place a robust 
legal and administrative framework 
for public procurement. However, the 
effectiveness of this potentially power -
ful tool depends on whether Member 
States meet the conditions by the end 
of 2016 and, where this is not the case, 
whether the Commission identifies 
and assesses the non -compliance and 
suspends payments accordingly.
63 
When considering whether to suspend 
payments to Member States, the Com -
mission may face tensions in Member 
States between two objectives: on the 
one hand, improving public procure -
ment systems, and on the other, pro -
moting the absorption of EU funds by 
Member States34.
64 
At the beginning of 2015, 1235 of the 28 
Member States had not yet fulfilled the 
public procurement conditions. This 
includes two out of the four Member 
States visited for this audit — Italy 
and the Czech Republic — which have 
both drawn up action plans.65 
The introduction of ex ante condition -
ality relating to public procurement 
has facilitated DG GROW’s attempts to 
work with Member States with particu -
lar public procurement problems. This 
is because Member States realise that 
they need to meet the ex ante con -
ditionality, and they have been open 
to receiving DG GROW’s support. DG 
GROW has selected Member States — 
four at the time of the audit36 — us -
ing a risk -based, targeted approach, 
based on a series of criteria and taking 
account of the Commission’s staff re -
sources (see Box 10 ). The Commission 
has indicated that, for Member States 
which have not fulfilled the ex ante 
conditionality, the priority until the 
end of 2016 is to seek to implement 
effectively the agreed action plans 
rather than resorting to corrective 
actions and possibly to infringement 
procedures.
66 
DG Internal Market, Industry, Entrepre -
neurship and SMEs then provides sup -
port through a range of measures, for 
example working groups to develop 
a comprehensive public procurement 
strategy. Coordinating such actions 
taken by the different departments 
of the Commission is important given 
the potential tension referred to above 
(paragraph 63).34 Such tensions have been 
previously highlighted by the 
Court. See the Court’s annual 
report 2011, paragraph 5.23 
(OJ C 344, 12.11.2012), and 
‘Making the best use of EU 
money: a landscape review of 
the risks to the financial 
management of the EU 
budget’, p. 54, paragraph 5(a), 
published on 
25 November 2014 ( http://eca.
europa.eu ).
35 Bulgaria, Czech Republic, 
Greece, Croatia, Italy, Latvia, 
Hungary, Malta, Poland, 
Romania, Slovenia and 
Slovakia.
36 Bulgaria, Greece, Italy and 
Romania.
37 Observations
The new public procurement 
directives have to be 
implemented by April 2016
67 
The new legislative package was pub -
lished on 28 March 2014 and comprises 
three directives: 2014/24/EU37and 
2014/25/EU38, which repeal or amend 
the previous directives; and 2014/23/
EU39, which introduces comprehen -
sive rules for concessions. The dead -
line for implementation by Member 
States, apart from a few exceptions, is 
18 April 2016. Nevertheless, the direct -
ives are already relevant for interpreta -
tion of provisions.68 
The new public procurement direct -
ives aim to ensure the effective func -
tioning of the internal market, increase 
the efficiency of public spending, 
facilitate the participation of small and 
medium -sized enterprises and enable 
better support of common, societal 
goals through public procurement.DG GROW’s criteria for targeting Member States
 οHigh rate of public procurement errors in the expenditure of EU funds.
 οNon -fulfilment of the public procurement ex ante conditionality.
 οSystemic public procurement inefficiencies.
 οComplaints received by the Commission on alleged infringements of EU law.
 οInfringements procedures or pre -infringement processes.
 οLitigation rate.
 οMember States’ willingness to establish a partnership with the Commission.Box 10
37 Directive 2014/24/EU of the 
European Parliament and of 
the Council of 
26 February 2014 on public 
procurement and repealing 
Directive 2004/18/EC (OJ L 94, 
28.3.2014, p. 65).
38 Directive 2014/25/EU of the 
European Parliament and of 
the Council of 
26 February 2014 on 
procurement by entities 
operating in the water, energy, 
transport and postal services 
sectors and repealing 
Directive 2004/17/EC (OJ L 94, 
28.3.2014, p. 243).
39 Directive 2014/23/EU of the 
European Parliament and of 
the Council of 
26 February 2014 on the award 
of concession contracts (OJ 
L 94, 28.3.2014, p. 1).
38 Observations
69 
The Commission has indicated that, 
in particular, the new reporting and 
moni  toring requirements from the 
Member States to the Commission 
‘should help reduce errors caused by 
the incorrect application of public pro -
curement rules’ 40. By codifying exist -
ing case law, the new public procure -
ment directives provide more legal 
certainty and make public procure -
ment more accessible for practitioners. 
Thus, they have the potential to help prevent certain errors, for example 
regarding the use of experience and 
staff qualification as award criteria, 
as well as the definition of conflict 
of interest. The changes to the legal 
framework may, in some cases, also 
lead to new types of error. An analysis 
of selected changes regarding public 
works and service contracts and their 
potential to address the problem of 
public procurement errors in the area 
of cohesion policy is set out in Box 
1141.
Analysis of selected changes introduced in the new public procurement directive 
for public works and services
Introduction of the new procedure, the innovation partnership,  in addition to the existing competitive pro -
cedure with negotiation (see Box 1 ). The new approach, with more flexibility for the contracting authorities, 
could lead to fewer procedural errors from cases where the open and restricted procedures were not appro -
priate. However, applying and auditing transparency, non -discrimination and equal treatment may become 
more difficult.
Possibility of using social and environmental aspects as award criteria.  Authorities in the Member States 
visited for this audit expressed concern about the risk that the new legislation will introduce certain new 
elements of complexity, with the possibility of including award criteria and contract performance conditions 
linked to social and environmental matters. Procurement based on these aspects may prove challenging for 
contracting authorities with regard to ensuring a transparent and non -discriminatory process. It may take 
some time to build up experience in finding legal and appropriate award criteria and contract performance 
conditions within the systems in the Member States.
New legal toolkit targeted at modification of the contracts.  More flexibility is introduced, allowing, in 
specific circumstances, modification of contracts without the use of a new procurement procedure. It is likely 
that the occurrence of errors related to contract modification will decrease. However, these changes will not 
address errors caused by poor project preparation resulting in the need for modifications later.
Precise definition of the maximum value of referential works.  By stating that the minimum yearly turnover 
may not be more than twice the estimated contract value, except in duly justified cases, the contracting au -
thorities may commit fewer errors in the form of specifying unlawful selection criteria.
Introduction of a new regime for certain services, such as health, education and social services,  where the 
contract value is over 750 000 euro. Member States will be free to define the national rules under this regime, 
provided they comply with the general EU treaty principles and provisions in the directive, in particular re -
garding transparency. Depending on the rules defined by Member States and their complexity, errors regard -
ing training and education services co -financed from the ESF could increase.Box 1140 European Commission press 
memo ( http://europa.eu/
rapid/press-release_  
MEMO-14-20_
fr.htm?locale=fr ).
41 Court’s Opinion No 4/2011.
39 Observations
70 
Only 40 % of the audit authori -
ties which responded to the survey 
expressed the view that the new 
direct  ives could help to reduce errors, 
in particular with regard to choos -
ing a public procurement procedure, 
publication of the call for tenders, 
definition of selection criteria or as -
sessment of bids (see analysis of errors 
in paragraph 22).
71 
DG GROW has already provided advice 
on how to transpose the new direc -
tives into national legislation. This has 
mainly been through participation in 
meetings, but also through the organi -
sation of specific thematic sessions for 
national experts.
72 
Overall, the effects of these features in 
the new legislative package, in terms 
of reducing the incidence of irregu -
larity, will depend on how they are 
implemented in Member States.
New reporting obligations
73 
The new directives introduce new 
monitoring and reporting require -
ments. These new obligations include 
the following42.(a) Member States have each to 
submit to the Commission, first in 
April 2017 and then every 3 years43, 
a monitoring report including:
(i)  information on the most 
frequent sources of wrong 
application or of legal uncer -
tainty; and
(ii)  prevention, detection and 
adequate reporting of cases of 
procurement fraud, corruption, 
conflict of interest and other 
serious irregularities.  
(b) The Commission, based on Mem -
ber States’ reports, shall regularly 
issue a report on the implementa -
tion and best practices of national 
procurement policies in the intern -
al market.
74 
If correctly implemented, these new 
reporting and monitoring require -
ments for Member States could 
provide much better information to 
the Commission on how the EU public 
procurement rules are implemented in 
practice.42 Articles 83 to 85 of Directive 
2014/24/EU.
43 The first of these reports is due 
by April 2017.
40 Observations
Member States focus on 
first‑level checks and have 
only recently started to take 
preventive actions
Corrective actions taken by 
Member States and/or the 
Commission
75 
Public procurement errors occurring at 
the beneficiary level could and should 
be detected and corrected by Member 
State authorities before they submit 
claims for payment to the Commis -
sion. These are the so -called ‘first -level 
checks’, and entail:
(a) verifications carried out by Mem -
ber State managing authorities on 
beneficiaries’ payment claims; and
(b) checks done by the Member State 
certifying authorities, including on 
the information reported by the 
managing authorities.
76 
As previously noted by the Court44 
and the Commission in its own audits, 
Member States’ first -level checks are 
still insufficiently effective. This results 
in expenditure on projects affected by 
public procurement errors being sub -
mitted to the Commission by Member 
States for reimbursement from the EU 
budget.77 
If the Commission detects public pro -
curement errors after a payment claim 
has already been submitted to it, the 
Commission can then:
(a) impose financial corrections in 
respect of the individual projects 
concerned; or
(b) if the Commission deems that it 
would be impossible to check all 
the contracts involved, impose 
a flat rate correction at the level of 
the OP (or one or several priority 
axes).
78 
To ensure a consistent approach to 
such financial corrections, the Com -
mission has developed guidelines 
which determine the amount of 
financial corrections to be applied in 
cases of non -compliance with public 
procurement rules45. Since 2013 this 
has been codified as a Commission 
decision and is thus binding on all 
Commission services responsible for 
shared management.
79 
Where it deems that Member States’ 
management and control systems 
are weak, and with a view to ensuring 
that Member States take the required 
remedial actions to improve them, 
the Commission interrupts payment 
deadlines. During these interruptions, 
no payments from the EU budget to 
the OP take place. Public procurement 
management and control system can 
fall within this scope (see examples in 
Box 12  and Box 13 ).44 Court’s annual reports on the 
implementation of the budget 
concerning the financial years 
2012  and  2013
45 COCOF 07/0037/03, ‘Guidelines 
for determining financial 
corrections to be made to 
expenditure co-financed by 
the Structural Funds or the 
Cohesion Fund for non-
compliance with the rules on 
public procurement’, 
29.11.2007; Commission 
Decision C(2013) 9527 final of 
19.12.2013 on the setting out 
and approval of the guidelines 
for determining financial 
corrections to be made by the 
Commission to expenditure 
financed by the Union under 
shared management, for 
non-compliance with the rules 
on public procurement.
41 Observations
80 
Financial corrections, unless imposed 
by Commission decision, may have 
a limited dissuasive effect during the 
period up to the closure of the 2007-
2013 programming period in 2017. This 
is because, according to the regula -
tions, Member States are entitled to 
replace expenditure for which cor -
rections were imposed with other 
eligible expenditure. In this way, the 
total funds received by Member States 
were, in effect, only rarely reduced. 
For the period from 2014 to 2020, the 
rules have been changed: Member 
States could face a loss of funding if 
expenditure which has been declared 
as legal and regular by the mana  ging, 
certifying and audit authorities is 
subsequently found to be affected by 
error46.Preventive action in Member 
States has begun, but only 
recently
81 
In the four Member States visited 
for this audit, most preventive ac -
tions started to be implemented 
only towards the end of the 2007-
2013 programming period, mostly in 
2013  and  2014.Example of a payment interruption
An audit carried out by the audit authority in Spain  in 2011 detected that contracting procedures at the 
company managing airports and heliports did not comply with public procurement rules. The Commission 
therefore interrupted payments in respect of projects run by this organisation. In 2014, the audit authority in 
Spain, following an audit of the effective implementation of the improved procedures, certified that public 
procurement procedures at the organisation had improved and were used effectively. The Commission ended 
the interruption. A flat -rate financial correction was applied to all expenditure incurred by that organisation 
deemed to have been affected by the problems over time.
 Example of an action plan
In the Czech Republic , due to serious deficiencies in the management and control systems, an action plan 
required by the Commission was drawn up and improvements have been implemented. For example, systems 
have been updated so that expenditure which was identified by the audit authority, the Commission or the 
Court to be irregular due to public procurement errors is automatically not submitted to the Commission for 
payment.Box 12 Box 13
46 See Article 143 of Regulation 
(EU) No 1303/2013.
42 Observations
82 
In three of the Member States — the 
United Kingdom, Italy and the Czech 
Republic  — interdepartmental working 
groups have recently been set up con -
cerning the issue of public procurement 
in cohesion policy. Such working groups 
bring together managing authorities, audit authorities, implementing bodies, 
legal services or other departments con -
cerned with public procurement, and 
are useful for exchanging experience, 
seeking consistency in dealing public 
procurement and identifying appropri -
ate actions. Box 14  shows details of 
a network set up in the United Kingdom.
Example of an interdepartmental working group dealing with public procurement 
in a Member State
In the United Kingdom , in 2013, the ERDF managing authority for England set up an internal network which 
reviews public procurement irregularities encountered and deals with public procurement-related queries. 
Included in the network are the managing authority’s lawyers, officials responsible for programme implemen -
tation, an intermediary body and, in an advisory capacity, the audit authority.
The network carries out:
 οreviews and reissues of national procurement requirements and related guidance;
 οregular video conferencing to discuss cases studies, guidance, etc.;
 οreviews of systems and projects audits and other checks relating to public procurement.Box 14 
IT tools could help address 
public procurement 
problems but will need to be 
fully implemented
83 
The transformational potential of 
information technology can help to 
prevent and detect errors in public 
procurement. Both the Commission 
and Member States are developing IT 
solutions, such as:(a) e-procurement,
(b) collecting data and building data -
bases to facilitate the analysis of 
errors; and
(c) data -mining tools for identify -
ing fraudulent patterns and 
irregularities.
43 Observations
E‑procurement
84 
E-procurement in this context refers to 
the use of electronic communications 
and transaction processing by public 
sector organisations when buying 
supplies, services and public works47. 
E-procurement involves the introduc -
tion of electronic processes to support 
the different phases of a procurement 
process  — publication of tender no -
tices, provision of tender documents, 
submission of tenders, evaluation, 
award48, ordering, invoicing and pay -
ment49. In 2014, the Commission esti -
mated that, on average, around 10 % 
of EU public procurement is conducted 
electronically50.
85 
E-procurement has the potential to
(a) enhance competition and value for 
money by broadening access to 
tenders within the single market 
including for SMEs;(b) improve the efficiency of the man -
agement of public procurement 
by widening access to tenders and 
automating key procedures, which 
could lead to cost savings for both 
tenderers and contracting authori -
ties; and
(c) help detect and prevent irregulari -
ties, corruption and fraud51.
86 
Box 15  shows information about the 
implementation of e -procurement in 
Member States visited for the audit.
87 
The Commission, having supported 
several pilot projects on e -procure -
ment, included an action to increase 
the use of e -procurement in its 2013 
action plan (see Table 2 ). However, 
at the time of the audit, this had not 
started yet.
Examples of implementation of e‑procurement
 οIn Italy , the system includes a virtual catalogue with products inserted by registered companies.
 οIn the Czech Republic , a unit cost database is being developed as a benchmark for bidders to enhance 
transparency and fair pricing.
 οIn Spain , in certain circumstances, offers can be submitted electronically.Box 1547 COM(2010) 571 final of 
18 October 2010, ‘Green paper 
on expanding the use of 
e-procurement in the EU’.
48 For the purposes of the new 
public procurement directives, 
‘no elements of the public 
procurement process after the 
award of the contract should 
be covered by the obligation 
to use electronic means of 
communication, nor should 
internal communication 
within the contracting 
authority’.
49 Directives 2014/24/EU and 
2014/25/EU require Member 
States to ensure that all 
communications and 
information exchange covered 
by these directives are 
performed using electronic 
means of communication. This 
includes publication of 
notices, availability of 
procurement documents and 
electronic submission. These 
requirements are to come into 
effect between 2016 and 2018.
50 SWD(2014) 262 final of 
1 August 2014, ‘Annual public 
procurement implementation 
review 2013’.
51 See, for example, Identifying 
and reducing corruption in 
public procurement in the EU , 
study prepared for the 
European Commission (OLAF) 
by PwC and Ecorys, with the 
support of Utrecht University, 
30 June 2013 ( http://ec.europa.
eu/anti_fraud/documents/
anti-fraud-policy/research-
and-studies/
identifying_reducing_
corruption_in_public_
procurement_en.pdf ). 
44 Observations
88 
Cyprus was also visited during the 
audit to review the e -procurement 
system in place there (see Box 16 ).
E‑procurement in Cyprus
Launched in 2010, e -procurement in Cyprus  is a web-based tool whose use is growing in public administra -
tion. By the end of 2014, 501 out of approximately 700 contracting authorities had registered to use e -procure -
ment. Use of some of the facilities remains optional for contracting authorities and economic operators. Most 
contracting authorities use the system for advertising tenders. Of those registered by the end 2014, 21 % are 
foreign companies. In 2014, a bilingual help desk was set up for all users of the system. The Cypriot authorities’ 
e-procurement strategy envisages full implementation by 30 June 2016, with training being provided starting 
in March 2015.Box 16
IT only recently started to be 
used for databases on public 
procurement errors
89 
As described above, a full understand -
ing of trends in public procurement 
problems requires comprehensive data 
to be available in a form that allows 
its analysis. Member States’ use of 
existing or new databases to analyse 
public procurement errors is a recent 
development (see paragraph 41), and 
the Commission has yet to develop 
a database of irregularities, including 
those arising in public procurement.Data mining tools — the 
example of the Arachne fraud 
alert tool
90 
In 2009, the Commission began 
developing an IT -based fraud alert 
tool, which it calls Arachne. It became 
operational in 2013. It is owned and 
maintained by the Commission.
91 
It has been designed to hold key data 
about projects funded under the 
ERDF, CF and ESF, for example about 
compan  ies and projects, so that, rela -
tionships and connections between 
different economic actors participat -
ing in such projects can be analysed. 
This web -based tool also provides links 
to other external public databases. 
Users of the tool are provided with 
indicators of potential risks of fraud as 
regards specific undertakings.
45 Observations
92 
The Commission is inviting managing 
and audit authorities in all 28 Member 
States to enter their data and use the 
tool, free of charge.
93 
In February 2015, 17 out of the 28 
Member States were either using the 
tool or had expressed their intention 
to do so (see also Figure 10 ).’‘94 
Such a system can, however, only 
work properly if comprehensive and 
good-quality data are encoded by 
a sufficiently large number of Member 
State authorities. By the end of 2014, 
14 Member States had provided such 
data for at least one OP . For the tool to 
be an effective EU -wide fraud alert sys -
tem, the other Member States would 
also have to provide data.Figure 10Arachne: status of implementation in Member States, February 2015
Regional policy and 
employment policy1 not using Arachne (DE)(EE, IE, LT, LU, FI, UK)(NL, AT, SI, SE)(ES, FR, CY, MT)*4 are creating/finalising their file3 will soon get Arachne (DK, HU, SK)
  6 not yet visited 4 are in a ’reflection‘ phase   * at least 1 programme (BE, BG, CZ, GR, IT, LV, HR, PL, PT, RO)*10 using Arachne  17 are currently involved in Arach ne: Arachne —  Status in Member States 
Source: European Commission. 
46
 Conclusions and 
recommendations
95 
EU public procurement policy is a key 
instrument in establishing the single 
market and in achieving smart, sus -
tainable and inclusive growth, accord -
ing to the Europe 2020 strategy, while 
at the same time ensuring the most 
efficient use of public funds.
96 
During the period 2009-2013, errors 
relating to public procurement con -
tributed significantly to the Court’s 
overall estimated error rate in this 
policy area, primarily to the error rates 
for the ERDF and the CF. Serious errors 
led to a lack, or complete absence, of 
fair competition and/or to the award 
of contracts to those who were not the 
best bidders.
97 
There is a range of causes of errors. 
The  complexity of the legal and ad -
ministrative framework is viewed as 
a problem, including a high volume of 
legislation and/or guidelines and the 
difficulty of applying them in practice. 
Lack of  administrative capacity, relat -
ing to both knowledge of the rules 
and of technical expertise concerning 
the specific works or services being 
procured, causes errors. Insufficient 
project planning by contracting au -
thorities and clerical mistakes are also 
problems.98 
This report assessed whether the Com -
mission and Member States are taking 
appropriate and effective actions to 
address the problem of public pro -
curement errors in the area of cohe -
sion policy. The Court found that the 
Commission and the Member States 
have started to address the problem, 
but there is still a long way to go in 
terms of analysing the problem and 
implementing actions.
Systematic analysis of public 
procurement errors by the 
Commission and Member 
States is very limited.
99 
Comprehensive analysis at both 
Member State level and Commission 
level has been precluded by a lack 
of coherent data. There are signs, 
however, in the four Member States 
visited for this audit, that data on 
public procurement errors are start -
ing to be collected, or are planned to 
be collected, in a systematic way (see 
paragraph 41). However, analysis of 
errors is still limited (see paragraphs 35 
to 39). The Commission has not yet 
developed a robust, comprehensive 
database of all irregularities, including 
those arising in public procurement. It 
undertook one analysis of ERDF and CF 
public procurement errors, namely in 
2011 (see paragraph 45).
47 Conclusions and recommendations
Recommendation 1
(a) The Commission should develop 
a database on irregularities, 
capable of providing a basis for 
a meaningful analysis of public 
procurement errors. It should ana -
lyse, in a comprehensive way, the 
frequency, seriousness and causes 
of public procurement errors in the 
area of cohesion policy, based on 
appropriate data, drawn both from 
its own databases and provided by 
Member States. The Commission 
should publish its analysis as part 
of the public procurement report 
required by the new directives.
(b) The relevant authorities in Mem -
ber States should develop and 
analyse their own databases on 
irregularities in the area of cohe -
sion policy, including those arising 
in public procurement, and should 
cooperate with the Commission to 
provide such data in a form and at 
a time that facilitates the Commis -
sion’s work.
The Commission and the 
Member States have started to 
implement actions to address 
the problem, but there is still 
a long way to go
100  
Despite the lack of comprehensive 
analysis of the problem, the Commis -
sion and Member States have started 
to implement actions to address it. Actions taken by the  Commission 
since 2010, both legislative and 
non -legislative, have begun to target 
the overall problem. A new package 
of legislation on public procurement 
was put in place in 2014, which has to 
be implemented by the Member States 
by April 2016 (see paragraphs 67 to 
74). This also introduces new reporting 
requirements for the Commission and 
Member States. Overall, the effects of 
the new legislative package, in terms 
of reducing the incidence of irregular -
ity, will depend on how it is imple -
mented in Member States. The new 
legal framework for ESIFs 2014-2020 
introduces ex ante conditional  ities 
regarding Member States’ public pro -
curement systems. Such preconditions 
have the potential to help address 
the problems (see paragraphs 61 to 
65). Member States were required to 
carry out a self -assessment on how 
and whether they meet the conditions, 
and to include a summary thereof in 
the partnership agreements which 
they submitted in 2014. A significant 
number of Member States had not yet 
fulfilled these conditions by the begin -
ning of 2015 (see paragraphs 61 to 65).
Recommendation 2
If the ex ante conditionality concern -
ing public procurement is not fulfilled 
by the end of 2016, the Commission 
should use its powers consistently to 
suspend payments to Member States 
concerned until they have rectified the 
shortcomings.
48 Conclusions and recommendations
101  
In 2013, the Commission established 
an internal technical working group 
and drew up an internal action plan. 
This points towards improved coord -
ination within the Commission. Most 
actions have not yet been fully imple -
mented. In addition, the action plan 
has only been endorsed by part of the 
Commission services and has not been 
published (see paragraphs 56 to 60).
Recommendation 3
The Commission should update and 
publish its internal action plan on 
public procurement. It should report 
on progress annually. To this end, the 
Commission should improve coord -
ination across its departments deal -
ing with related public procurement 
issues.
102  
Public procurement is still a significant 
source of errors and there is a long way 
to go in terms of analysing the prob -
lem and implementing actions. Effec -
tive implementation of actions is now 
needed. However, whilst the internal 
technical working group is a posi -
tive development, it was established 
at a low level within the Commission 
services, and the Commission has not 
shown high -level, coordinated leader -
ship (see paragraphs 55 to 60).Recommendation 4
The Commission should set up 
a high -level group to provide leader -
ship in tackling the problem of public 
procurement errors, to avoid the risk 
that actions are not consistently im -
plemented in all Commission services. 
The group should act as an advocate 
for improvements in public procure -
ment, including, where necessary, for 
simplification in this field.
103  
Public procurement errors occurring at 
the beneficiary level could and should 
be detected and corrected by Member 
State authorities before they submit 
claims for payment to the Commis -
sion. As previously noted by the Court 
and the Commission in its own audits, 
Member States’ first -level checks are 
still insufficiently effective. This results 
in expenditure on projects affected by 
public procurement errors being sub -
mitted to the Commission by Member 
States for reimbursement from the EU 
budget (see paragraph 76).
104  
During the 2007-2013 programming 
period, the Commission used financial 
corrections more extensively than 
previously. However, financial correc -
tions, unless imposed by Commission 
decision, may have a limited dissuasive 
effect during the period up to the 
49 Conclusions and recommendations
closure of the 2007-2013 programming 
period in 2017. This is because, accord -
ing to the regulations, Member States 
are entitled to replace expenditure for 
which corrections were imposed with 
other eligible expenditure. In this way, 
the total funds received by Member 
States were, in effect, only rarely 
reduced. For the spending period 
from 2014 to 2020, the rules have been 
changed: Member States could face 
net corrections if expenditure which 
has been declared as legal and regular 
by the managing, certifying and audit 
authorities, is subsequently found 
to be affected by error (see para -
graphs 75 to 80).
Recommendation 5
The Commission should impose 
financial corrections wherever it 
finds that Member States’ first -level 
checks are insufficiently effective and, 
where necessary, pursue infringement 
procedures for breaches of the public 
procurement directives.105  
In addition to the need for a Commis -
sion database to facilitate the analysis 
of public procurement errors (see 
Recommendation 1), IT tools such 
as e -procurement and data mining 
could further the benefits of public 
procurement and help to address the 
problems. At the time of the audit, the 
implementation of such tools varied 
across the Member States, thus hold -
ing back the possibility to take full 
advantage of such potential benefits 
(see paragraphs 83 to 94).
Recommendation 6
(a) The Commission should exploit 
further the opportunities provided 
by developments in information 
technology, including promoting 
e-procurement and data -mining 
tools and good practice.
(b) Member States should exploit fur -
ther the opportunities provided by 
e-procurement and data -mining 
tools.
This Report was adopted by the Court of Auditors in Luxembourg at its meeting 
of 16 July 2015.
 For the Court of Auditors
 Vítor Manuel da SILVA CALDEIRA
 President

50
 Annexes Annex IThe Commission’s and Member States’ roles in public  
procurement and cohesion policy
At the European Commission
(a) DG Regional and Urban Policy  oversees the implementation of the ERDF 
and CF, including  negotiating and approving OPs. It monitors and audits 
the implementation of the OPs, including compliance with public procure -
ment. DG Regional and Urban Policy and DG Employment, Social Affairs 
and Inclusion also issue guidance, some of it developed together with 
Member States. For example, they issue guidance on financial corrections 
in the case of non- compliance with public procurement rules1.
(b) DG Employment, Social Affairs and Inclusion  oversees the implementa -
tion of the ESF in similar ways to DG Regional and Urban Policy for the 
ERDF and CF (see above).
(c) DG Internal Market, Industry, Entrepreneurship and SMEs  (previously 
DG Internal Market and Services) is responsible for developing public pro -
curement legislation and for overseeing its implementation. It monitors 
and assists Member States in such implementation, taking enforcement 
measures where necessary.
(d) DG Budget  is responsible for managing the budgetary regulatory frame -
work, and puts forward proposals and implements the regulatory frame -
work for the establishment, the implementation and the control of the EU 
budget.
In the Member States
(a) Managing authorities  are responsible for managing and implementing 
OPs. They can delegate programme implementation to implementing 
bodies. The managing authority or its implementing bodies carry out 
checks on public procurement procedures as part of their management 
checks.
(b) Certifying authorities  carry out final checks on payment claims before 
they are submitted to the Commission.
(c) Audit authorities  carry out ex post audits of the systems and samples of 
individual projects before submitting reports to the Commission. Their 
audits cover issues relating to public procurement management systems 
and individual compliance checks on projects.1 COCOF guidelines (a 
committee set up for the 
coordination of the funds) 
(COCOF 07/0037/03 guidelines 
for determining financial 
corrections to be made to 
expenditure co-financed by 
the Structural Funds or the 
cohesion fund for non-
compliance with the rules on 
public procurement, 
29.11.2007). Commission 
Decision C(2013) 9527 final of 
19.12.2013 on the setting out 
and approval of the guidelines 
for determining financial 
corrections to be made by the 
Commission to expenditure 
financed by the Union under 
shared management, for 
non-compliance with the rules 
on public procurement.
51 Annexes Annex IIAnalysis of errors by fund detected by the Court, 2009 ‑2013
Trans ‑
actions 
testedProjects with ‑
in which public 
procurement 
procedures 
were checkedProjects with 
at least one 
public procure ‑
ment errorTotal errorsSerious Significant Minor
Number %
ERDF 657 378 170 382 60 117 185 80
CF 156 145 68 125 21 26 74 25
ESF 607 171 42 80 19 25 29 26
Total 1 420 694 280 587 100  % 168 288 131
52 Annexes Annex IIIDescription and analysis of errors in the different phases of tendering procedures
Description of the errorNumber of errors
detected by the Court, 2009 ‑2013
Serious Significant Minor Total
Pre‑tenderingSplitting of works or services, artificially, into smaller tenders to 
avoid thresholds23 3 0 26
Award of a contract directly without justification 21 2 0 23
Use of inappropriate tendering procedure 27 10 1 38
Pre‑tendering phase: subtotal 71 15 1 87
TenderingProblems with publication and transparency requirements and in 
tender specification11 64 111 186
Specification of unlawful, and incorrect application of, selection 
and award criteria 33 128 6 167
Procedural weaknesses, including lack of appropriate 
documentation22 39 12 73
Tendering phase: subtotal 66 230 130 426
Contract 
managementModifying or extending the scope of contracts without using 
procurement procedure31 42 1 74
TOTAL 168 288 131 587
29 % 49 % 22 % 100  %
53 Annexes Annex IVPublic procurement infringement procedures initiated by the Commission, 
2009 ‑2013
2009 2010 2011 2012 2013 TotalReferred to the 
Court of Justice 
of the European 
Union1
Belgium 1 1  
Bulgaria 2     2  
Czech Republic    
Denmark        
Germany 4 1 1 1 7 1
Estonia        
Ireland    
Greece 8 6 4   18 3
Spain 2 1 3  
France        
Italy 1 1 5 2 9  
Cyprus 1     1  
Latvia  1 1 2  
Lithuania        
Luxembourg    
Hungary 2 2   1 5 2
Malta 2 1 3  
Netherlands 1 3    4 1
Austria  1 1 2  
Poland   2 1  3 1
Portugal 1 1 2  
Romania 2 1  1  4  
Slovenia  1 1  
Slovakia 1     1  
Finland    
Sweden 1    1 2  
United Kingdom 3 1    4  
Total 32 18 14 7 3 74 8
1  Judgements in the German and Dutch cases were delivered in 2012. The two Hungarian and two of the Spanish cases were withdrawn from 
the Court of Justice. One of the Greek cases and the Polish case are pending.
54
The Commission's analysis of public procurement 
errors is also reflected in the Commission Decision 
of 19 December 2013 (C(2013) 9527 final) setting out 
the guidelines for determining financial corrections 
to be made for non-compliance with the rules on 
public procurement. These guidelines are an update 
of guidance that has existed since November 20073. 
For the 2014-2020 programming period, the Com -
mission is taking a proactive approach in sup -
porting the Member States, through guidance, 
monitoring and support (e.g. via technical assist -
ance) to implement their national action plans for 
non-fulfilled ex ante conditionalities until the end 
of 2016. With this preventive approach the Commis -
sion wants to reduce the risk of possible suspension 
of payments to operational programmes (OPs) after 
2016, but will not refrain from using this tool of sus -
pension if the targets and milestones of the action 
plan are clearly not met. 
VIII (a) (i)
The Commission accepts the recommendation.
The Commission will look into the possibility to 
improve the functionalities of its Irregularity Man -
agement System (IMS) in order to accommodate the 
Court's functional requests. The possibility of interop -
erability between the IMS and CED/ABAC and other 
Commission databases is currently being explored. 
Moreover, with regard to errors detected by its own 
audits, the Commission services are starting to use 
a common IT audit tool for the ERDF, the CF and the 
ESF called MAPAR (Management of Audit Processes, 
Activities and Resources). 
3 Ref. COCOF 07/0037/03-EN of 29/11/2007 applicable to the 
European Regional Development Fund, Cohesion Fund and 
European Social Fund; Ref. EFFC/24/2008 of 1/4/2008, applicable 
to European Fisheries Fund; and SOLID/2011/31 REV of 11.1.2012, 
i.e. the guidelines for the financial corrections to be applied for 
irregularities in the application of the Union regulations on public 
procurement to contracts co-financed by the four funds of the 
general programme ‘Solidarity and management of migration 
flows’ during the 2007-2013 programming period.Executive summary
V
The Commission has been addressing the problem 
of public procurement errors in the area of cohe -
sion policy since a long time but now addresses it in 
a more coordinated way under the umbrella of the 
public procurement action plan (see Court's obser -
vation in paragraph 56).
Errors in public procurement have been addressed 
since previous programming periods. Audit findings 
helped draft the first guidelines on financial correc -
tions issued in 2007. The Commission is also already 
analysing, in a comprehensive way, public procure -
ment errors in the area of cohesion policy. This 
analysis is done every year through the thorough 
assessment of the annual control reports submitted 
by national audit authorities and through its own 
audit findings (in the context of the audit enquiry 
‘Bridging the assurance gap’, half of the audit find -
ings are linked to public procurement). This assess -
ment is reported in the annual activity reports of 
the DGs concerned.
Common Commission reply to 
paragraphs VI and VII
Actions to address public procurement issues were 
being undertaken by the Commission earlier than 
2010. Action plans to follow up public procurement 
findings detected during Commission audits started 
as early as 2006 in various Member States. In addi -
tion to the horizontal analysis carried out on public 
procurement errors and presented in May 2011 to 
the Advisory Committee for Public Contracts1, the 
Commission also published, in October 2011, a staff 
working paper on ‘Analysis of errors in cohesion 
policy for the years 2006-2009 — actions taken by 
the Commission and the way forward’2. 
1 Working document prepared by DG Regional Policy on the 
main audit findings regarding application of public procurement 
rules in Member States found in projects co-financed by ERDF and 
the Cohesion Fund under cohesion policy (CC/2011/08 EN).
2 Commission staff working document, ‘Analysis of errors in 
the cohesion policy for the years 2006-2009’ (SEC(2011) 1179 of 
5 October 2011) andReply of the  
Commission
Reply of the Commission 55
VIII (c)
The Commission accepts this recommendation and 
is already implementing it with improved coordina -
tion across its departments at director level since 
summer 2014. 
The Commission intends to have the public pro -
curement action plan endorsed more broadly 
within the Commission services. It is also envisaged 
to have it endorsed at a higher level.
VIII (d)
The Commission accepts this recommendation, 
which is partially implemented, and supports 
initiatives leading to enhancements in public 
procurement.
It is envisaged to have regular contact between the 
relevant Commissioners responsible for ESIFs and 
the internal market in a format to be decided. This 
group could invite experienced external stakehold -
ers, whenever judged useful. The Commission also 
supports the idea of providing leadership at a high 
level and notes that the directors of DG Regional 
and Urban policy (DG REGIO) and DG GROW have 
been meeting regularly since July 2014. Experi -
enced external stakeholders have already been 
invited at this level.
VIII (e)
The Commission accepts the recommendation and 
considers it is already taking the recommended action. 
See also the Commission's reply to VIII (b) above. 
The Commission will continue to impose financial 
corrections wherever it finds that Member States’ 
first-level checks are insufficiently effective. When 
serious deficiencies are detected, preventive and 
corrective measures such as action plans, interrup -
tions and financial corrections are implemented 
ensuring the legality and regularity of past and 
future expenditure declared to the Commis -
sion. Payments are not resumed until systems are 
improved and close supervision is carried out after 
the implementation of the remedial actions to 
ensure that the management and control systems 
of programmes do not deteriorate again.Finally, the Commission envisages further steps 
to improve the analysis of procurement data, in 
particular fostering the collection of such data and 
developing a data analytics tool for the early detec -
tion of actual and prospective procurement anoma -
lies and a better understanding of their causes 
(beyond the field of cohesion). 
VIII (a) (ii)
The Commission accepts the recommendation and 
notes that it is addressed to the Member States.
The IMS already provides Member States with a 
database that can not only be used to comply with 
the irregularity reporting obligations as defined in 
the different sectorial regulations but also for per -
forming analyses to be used for national purposes.
VIII (b)
The Commission accepts this recommendation. The 
directors-general of the four European Structural 
and Investment Fund directorates-general (ESIF 
DGs) already meet regularly in the so-called Ex ante 
Conditionality Suspension Committee, with which 
DG Internal Market, Industry, Entrepreneurship and 
SMEs is associated4. An approach, both preven -
tive (with implementation of national action plans 
for non-fulfilment of ex ante conditionality) and 
correct  ive (with suspension of payments), will con -
tinue to be applied strictly and consistently.
4 The committee shall coordinate and prepare recommendations 
for suspension decisions, including the preparation of 
draft suspension decisions, implementing Article 19(5) and 
Article 142(1)(e) of Regulation (EU) No 1303/2013 of the European 
Parliament and of the Council laying down common provisions 
on the ERDF, the ESF, the CF, the EARDF and the EMFF, and general 
provisions on the ERDF, ESF, CF and EMFF and Article 41 of 
Regulation (EU) No 1306/2013 (the CAP horizontal regulation), and 
shall provide the directors-general in the four ESIF DGs with advice 
on issues related to this matter.
Reply of the Commission 56
Observations
24
The Commission refers to its replies in the special 
report mentioned by the Court. 
25
A certain level of complexity is needed in any public 
procurement system to minimise arbitrary behav -
iour by the contracting authorities and uphold the 
principles of equal treatment, non-discrimination 
and transparency.
The Commission also notes instances in which 
national law goes beyond the obligations laid down 
in the directives.
Common Commission reply to 
paragraphs 26 and 27
The Commission has developed a series of actions 
to address the lack of administrative capacity. Two 
examples of actions of the public procurement 
action plan (mentioned in paragraph 56 of the 
report) address this problem concretely. In 2015, the 
Commission has finalised guidance on the avoid -
ance of most common errors in public procurement, 
which emphasises the need for good planning. It 
has also carried out a stocktaking study in 2015 
on administrative capacity, systems and practices 
across the EU to ensure the compliance and quality 
of public procurement involving ESIFs. This study 
provides specific recommendations to improve 
administrative capacity in each Member State.
29 (a)
The Commission notes that there is a working group 
at national level in the Czech Republic compris -
ing the Public Procurement Office, the Ministry 
of Regional Development (in their coordination 
capacity) and other relevant bodies with the aim of 
harmonising the interpretation of public procure -
ment rules. For persistent legal breaches of the public procure -
ment directives the Commission will continue to 
pursue infringement procedures where necessary. 
VIII (f)
The Commission accepts the recommendation. 
As e-procurement, in particular, improves transpar -
ency, facilitates cross-border tenders and access 
by SMEs and streamlines administrative proced -
ures, the 2014 directives lay down a number of 
e-procurement obligations. The correct and quick 
transposition of these provisions is a priority for the 
Commission. 
As regards data-mining tools, the Commission 
is taking the recommended action. It is actively 
promoting the use by responsible national authori -
ties of Arachne, a preventive risk-scoring tool it has 
developed. This tool may bring significant improve -
ments in the prevention and detection of various 
risks related, for example, to public procurement 
procedures, conflicts of interest and the concentra -
tion of grants under particular operators. It can also 
help identifying red flags of fraud suspicion. The 
Commission is aware and supportive of the use of 
other comparable data-mining tools.
VIII (g)
The Commission accepts the recommendation and 
notes that it is addressed to the Member States.
Introduction
10
The Commission underlines that, under shared 
management, the implementation of the public 
procurement-related regulatory framework falls 
under the competence of the Member States. They 
are also responsible for the way the public procure -
ment directives are transposed into the national 
legal order.
Reply of the Commission 57
38 (b)
Public procurement issues are indeed high on 
the agenda in Italy, because it is the predominant 
source of financial corrections for the ERDF.
The necessary starting point to address the related 
weaknesses is the inventory and analysis of public 
procurement errors.
39
Based on its 2011 analysis5, the Commission has 
taken specific actions in its undertaking to mitigate 
these risks and to help the Member States; in par -
ticular, additional guidance and training were pro -
vided to managing authorities on the identified risks 
and measures concerning timely implementation of 
financial corrections, interruption and suspension 
procedures, and audits targeted at the most risky 
areas were continued. These actions were brought 
together under a public procurement action plan 
set up in 2013 between all ESIF DGs, DG GROW and 
the European Investment Bank (EIB) to improve the 
implementation of public procurement rules.
44 (a)
The purpose of the information provided in annual 
control reports is to be used for the assurance 
process for each OP , not to perform an analysis of 
public procurement errors. 
See also Commission reply to paragraph 39.
44 (c)
Public procurement issues are discussed in the 
framework of the bilateral meetings with audit 
authorities when they are of significance for the 
Member State/programmes concerned.
5 Commission staff working document ‘Analysis of errors in 
the cohesion policy for the years 2006-2009’ (SEC(2011) 1179 of 
5 October 2011) and the ’Working document prepared by DG 
Regional Policy on the main audit findings regarding application of 
public procurement rules in Member States found in projects co-
financed by ERDF and the Cohesion Fund under cohesion policy’ 
(CC /2011/08 EN).32
Irregularities reported by Member States to the 
Commission via the IMS are not used exclusively for 
the preparation of the annual report on the pro -
tection of the EU’s financial interests and the fight 
against fraud, but are also analysed for the closure 
of the 2000-2006 programming period and in the 
framework of the annual coordination meetings 
with audit authorities.
The reported data are also used for risk analysis 
purposes, and namely: by Commission auditors to 
prepare missions and by the European Anti-Fraud 
Office (OLAF). They are also provided to the Court’s 
auditors upon request.
33
OLAF receives the irregularities reported by Mem -
ber States on behalf of the Commission via the IMS. 
The Commission highlights that the classification of 
a reported irregularity is not a static and definitive 
event. The moment at which Member States classify 
cases varies due to national legislation and prac -
tices and national policy. In certain cases, a certain 
reluctance has been identified to classify a case too 
early as ‘fraud’, because of possible liability conse -
quences foreseen by national legislation.
It may therefore happen that a certain irregularity 
initially not classified as ‘suspected fraud’ changes 
its status thanks to following updates concerning 
the case and the development of the relevant pro -
ceedings. Similarly, a case which was initially classi -
fied as ‘suspected fraud’ can be updated to a simple 
‘irregularity’ following, for instance, a decision by a 
court or by an investigative body or authority.
35
See Commission common reply to paragraphs 26 
and 27.
Reply of the Commission 58
The system was not designed to provide, through 
entirely structured fields, the information referred 
to by the Court.
See Commission reply to paragraphs 32 and 46.
49
The Commission has been addressing this issue 
since a long time, but now addresses it in a more 
coord  inated way under the umbrella of the public 
procurement action plan.
The Commission recalls the documents referred 
to under paragraph 39 (guidance on avoidance 
of errors and stocktaking study on administrative 
capacity).
51
The Commission’s analysis of public procurement 
errors is reflected in the Commission Decision of 
19 December 2013 (C(2013) 9527 final) on the set -
ting out and approval of the guidelines for deter -
mining financial corrections to be made by the 
Commission to expenditure financed by the Union 
under shared management, for non-compliance 
with the rules on public procurement. These guide -
lines are an update of the guidance that has existed 
since 2007.
57
By the end of June 2015, the implementation of 
the public procurement action plan had further 
progressed. Out of 12 actions, three have been 
completed (as stated by the Court in points (a)-(c) 
below), seven are under implementation and two 
were planned for the long term and have not yet 
been started. 
Those not yet started are long-term actions num -
bers 11 (Public procurement quality management 
systems) and 12 (Guide-to-guidance) in Table 2 .46
The Commission services have developed an IT tool 
called MAPAR (Management of Audit Processes, 
Activities and Resources), which is now in use. One of 
the functionalities of this common tool for the ERDF, 
CF and ESF is the introduction and classification of 
findings by typology of error and within one category 
(e.g. public procurement) by finding subcategory 
(absence of incentive effect, scheme not notified, etc.). 
Both DGs REGIO and EMPL will use MAPAR to moni -
tor all audit findings in a horizontal manner and 
regularly update a risk score table for an improved 
sound management of the Funds. This applies 
as well to any public procurement audit issues 
detected by the Commission.
Moreover, the IMS database is in place as a tool for 
Member States to report the irregularities detected, 
including those related to public procurement. This data -
base is accessible to all relevant Commission services. 
47
In 2012, in the context of a thematic audit on man -
agement verifications, DG EMPL identified specific 
cases of breaches of public procurement rules 
which were not detected by the national controls. 
The report and its conclusion were discussed with 
national authorities on several occasions.
See also Commission reply to paragraph 46.
48
The IMS was designed for the reporting of irregu -
larities (both fraudulent and non-fraudulent, includ -
ing irregularities related to public procurement) by 
Member States to the Commission. 
In relation to public procurement irregularities, in 
addition to structured fields, further information 
is available via free-text fields in the IMS system. 
However, the data’s exploitability depends upon 
the quality of the information and level of detail 
submitted by national authorities. 
Reply of the Commission 59
61
Within the context of ex ante conditionalities and 
the partnership agreements adopted in 2014, 12 
action plans have been adopted for the 2014-2020 
programming period6, to be assessed by 2016. 
The Commission is taking a proactive approach in 
supporting the Member States, through guidance, 
monitoring and support (e.g. via technical assist -
ance) to implement their national action plans for 
non-fulfilled ex ante conditionalities until the end 
of 2016. With this preventive approach the Commis -
sion wants to reduce the risk of possible suspension 
of payments to OPs after 2016, but will not refrain 
from using this tool of suspension if the targets and 
milestones of the action plan are clearly not met. 
63
The Commission refers to the reply to para -
graphs 60 and 61, and highlights that the sound 
implementation of the applicable common and/
or specific legislative and programming framework 
enjoys priority over absorption.
71
DG GROW has also replied to specific questions 
asked by national authorities and created an IT tool, 
WIKI, where questions and replies are uploaded and 
made available to all national authorities.
74
The Commission plans to provide guidance for the 
drafting of the monitoring report to the Member States 
according to the Commission’s information needs.
76
Insufficient effectiveness of management verifica -
tion on first-level checks is a cause of serious con -
cern for the Commission (see DG REGIO 2014 AAR, 
page 50).
6 For BG, CZ, EL, IT, MT, LV, PL, HU, HR, SI, SK and RO.58 (a)
The Commission intends to endorse the public 
procurement action plan on a wider and possibly 
higher stakeholder level than before.
58 (b)
The working group was established as a subgroup 
of the interservice group on reinforcing the funds’ 
capacity in the weaker Member States set up at 
director-general level. That interservice group 
reports to the Secretariat-General.
The Commission considers that a technical issue needs 
a technical follow-up under the supervision of the 
management, which is actively involved in the Public 
Procurement Working Group where appropriate. 
The directors of DG REGIO and DG GROW meet regu -
larly since July 2014 and have discussed the option of 
regular meetings at very high level (directors-general 
and commissioners).
60
In recent years, each Commissioner has referred to 
public procurement issues and calls for Member States 
to improve their systems. This has been echoed for 
the last 6 years by the Commissioners in charge of 
regional policy during their hearings for the discharge. 
Also, each directorate general in its respect  ive annual 
activity reports reported the actions taken to tackle 
problems linked to public procurement and, similarly, 
calls on the Member States to improve their system.
The Commission considers that all public procure -
ment activities are initiated and supervised closely 
by the senior management of the Commission 
services concerned (ESIF DGs and DG GROW).
Reply of the Commission 60
 — The Commission supports the eTendering pilot 
of eSens, which allows cross-border interoper -
ability. An economic operator will be able to use 
one single software to communicate with sev -
eral eTendering solutions Europe wide. On top 
of that, the Commission has started to use the 
Connecting Europe Facility (CEF) to cover other 
aspects of digitisation of public procurement, 
including e-invoicing and simplification.
 — EU funds are being deployed either through 
the ERDF/CF or the ESF to help Member States 
to develop the administrative capacities and 
infrastructure (including the development of an 
e-procurement platform) needed for a full move 
to e-procurement.
89
See Commission replies to paragraphs 26, 27 and 46.
91
Arachne has been designed to help Member States 
in management verifications and as a fraud alert 
tool. It includes a number of risk indicators linked 
to public procurement, such as: lead time between 
publication of the tender notice and contract signa -
ture date; number of disqualified tenders/number 
of tenders received; number of valid tenderers; 
amount of contracts procured via negotiated, 
restricted procedure or via direct award/total pro -
ject cost; number of contract addenda compared 
to the average per sector; financial correction to 
procurement procedure applied in the past in rela -
tion to the beneficiary.
Secondly, Arachne identifies the involvement of 
beneficiaries, contractors and subcontractors in dif -
ferent projects and programmes but also identifies 
the links between entities involved in the imple -
mentation of a project.A document called ‘Guidance on management 
verifications’ was discussed with Member States in 
2014 and 2015, and will be published in July 2015. 
It includes a section dedicated to verifications of 
public procurement. This is not part of the public 
procurement action plan since it covers manage -
ment verifications of all types.
80
Following the legal provisions of the 2007-2013 pro -
gramming period, the regulation allows the replace -
ment of irregular expenditure by eligible expend -
iture if this new expenditure has been subject to 
checks by managing and audit authorities. Never -
theless, such financial corrections can result in 
losses of funds to the Member State at closure when 
the replacement of expenditure is no longer pos -
sible in the absence of a subsequent payment claim.
For the period 2014-2020, and according to Art -
icle 145 of Regulation (EU) No 1303/2013, the finan -
cial correction will imply net reduction of assistance 
also when there is a serious deficiency in the effect -
ive functioning of the systems not detected and 
reported by the audit authority prior to the date 
of detection by the Commission or by the Court of 
Auditors.
87
As a follow up to its communication on end-to-end 
e-procurement to modernise public administra -
tion (COM(2013) 453) the Commission has  initiated 
a number of actions to support the uptake of 
e-procurement.
 — On a political level, targets for the uptake of 
e-procurement are featured in the comprehen -
sive political package aimed at completing the 
digital single market (COM(2015) 192).
 — The Commission has started the work of the 
multistakeholder forum on e-procurement 
(EXEP), which works on sharing, disseminating 
and clarifying best practices in the areas of gov -
ernance, regulation and interoperability.
Reply of the Commission 61
As regards the development of a robust, compre -
hensive database of all irregularities, the Commis -
sion refers to the reply given under paragraphs 32, 
46 and 48, as well as, on the documents prepared, 
to the common Commission reply for paragraphs 26 
and 27.
Recommendation 1 (a)
The Commission accepts the recommendation.
The Commission will look into the possibility of 
improving the functionalities of its IMS in order to 
accommodate the Court’s functional requests. The 
possibility of interoperability between the IMS and 
CED/ABAC and other Commission databases is cur -
rently being explored. 
Moreover, with regard to errors detected by its own 
audits, the Commission services are starting to use 
a common IT audit tool for the ERDF, the CF and the 
ESF called MAPAR (Management of Audit Processes, 
Activities and Resources). 
Finally, the Commission envisages further steps 
to improve the analysis of procurement data, in 
particular fostering the collection of such data and 
developing a data analytics tool for the early detec -
tion of actual and prospective procurement anom -
alies and a better understanding of their causes 
(beyond the field of cohesion). 
Recommendation 1 (b)
The Commission accepts the recommendation and 
notes that it is addressed to the Member States.
The IMS already provides Member States with 
a database that can not only be used to com -
ply with the irregularity reporting obligations as 
defined in the different sectorial regulations but 
also for performing analyses to be used for national 
purposes.94
It should be noted that the 2007-2013 regulation 
did not contain any obligation for Member States to 
implement, for example, anti-fraud strategies. For 
the 2007-2013 programming period, the users have 
mainly agreed to use Arachne to test the system. 
Hence, many Member States decided to send data 
for only part of the OPs falling under their responsi -
bility. By mid 2015, another four Member States had 
sent data for at least one OP . 
The Commission anticipates further growth in the 
number of users for the 2014-2020 period. For this 
period, Arachne can be an effective element to miti -
gate fraud risk. 
Conclusions and recommendations
97
See common Commission reply to paragraphs 26 
and 27.
98
Since previous programming periods, errors on 
public procurement have been addressed by the 
Commission. Audit findings helped drafting the first 
guidelines on financial corrections issued in 2007.
The Commission now addresses this issue in a more 
coordinated and exhaustive way under the umbrella 
of the public procurement action plan.
99
The Commission has taken appropriate measures 
and remedial action plans in individual Member 
States when problems were detected by audits. Its 
analysis contributed to the update in 2013 of the 
guidelines for determining the financial corrections 
to be made for non-compliance with the rules on 
public procurement.
Reply of the Commission 62
101
The actions of the public procurement action plan 
have been largely discussed, amended and agreed 
by representatives of all ESIF DGs, DG GROW and the 
EIB. They were cooperatively developed within the 
working group on improving public procurement. 
This working group was established as a subgroup 
of the inter  service group on reinforcing the funds’ 
capacity in Member States set up at director-gen -
eral level. That interservice group reports to the 
Secretariat-General.
The implementation of the public procurement 
action plan has progressed (see Commission reply 
to paragraph 57). The Commission also intends to 
endorse the public procurement action plan on 
a wider and possibly higher level than before. 
Recommendation 3
The Commission accepts this recommendation and 
is already implementing it with improved coordin -
ation across its departments at director level since 
summer 2014. 
The Commission also intends to have the public 
procurement action plan endorsed more broadly 
within the Commission services. It is also envisaged 
to have it endorsed at a higher level as outlined in 
the Commission's reply to recommendation 2. 
102
See Commission replies to paragraphs 100 and 101.
7 The committee shall coordinate and prepare recommendations 
for suspension decisions, including the preparation of 
draft suspension decisions, implementing Article 19(5) and 
Article 142(1)(e) of Regulation (EU) No 1303/2013 of the European 
Parliament and of the Council laying down common provisions 
on the ERDF, the ESF, the CF, the EARDF and the EMFF, and general 
provisions on the ERDF, ESF, CF and EMFF and Article 41 of 
Regulation (EU) No 1306/2013 (the CAP horizontal regulation), and 
shall provide the directors-general in the four ESIF DGs with advice 
on issues related to this matter.100
Actions to address public procurement issues were 
being undertaken by the Commission earlier than 
2010. Action plans to follow up public procurement 
findings started as early as 2006 in various Member 
States. In addition to the horizontal analysis carried 
out on public procurement errors and presented in 
May 2011 to the Advisory Committee for Public Con -
tracts, the Commission also published, in October 
2011, a staff working paper on ‘Analysis of errors in 
cohesion policy for the years 2006-2009 — actions 
taken by the Commission and the way forward’. 
The Commission’s analysis of public procurement 
errors is also reflected in the Commission Decision 
of 19 December 2013 (C(2013) 9527 final) setting out 
the guidelines for determining financial corrections 
to be for non-compliance with the rules on public 
procurement. These guidelines were an update of 
guidance that has existed since November 2007.
For the 2014-2020 programming period, the Com -
mission is taking a proactive approach in sup -
porting the Member States, through guidance, 
monitoring and support (e.g. via technical assis -
tance) to implement their national action plans for 
non-fulfilled ex ante conditionalities until the end 
of 2016. With this preventive approach the Commis -
sion wants to reduce the risk of possible suspension 
of payments to OPs after 2016, but will not refrain 
from using this tool of suspension if the targets and 
milestones of the action plan are clearly not met. 
Recommendation 2
The Commission accepts this recommendation. The 
Directors General of the four European Structural 
and Investment Fund Directorates General meet 
already regularly in the ex ante conditionality suspen -
sion committee to which DG GROW is associated7. 
An approach, both preventive (with the implementa -
tion of national action plans for non-fulfilment of ex 
ante conditionality) and corrective (with suspension 
of payments), will continue to be applied strictly and 
consistently.
Reply of the Commission 63
104
Following the legal provisions of the 2007-2013 
programming period, the regulation allows the 
replacement of irregular expenditure by eligible 
expenditure if this new expenditure has been subject 
to checks by managing and audit authorities. Never -
theless, such financial corrections can result in losses 
of funds to the Member State at closure when the 
replacement of expenditure is no longer possible in 
the absence of a subsequent payment claim.
For the period 2014-2020, and according to Article 145 
of Regulation (EU) No 1303/2013, the financial correc -
tion will imply a net reduction of assist  ance also when 
there is a serious deficiency in the effective func -
tioning of the systems not detected and reported 
by the audit authority prior to the date of detection 
by the Commission or by the Court of Auditors.
Recommendation 5
The Commission accepts the recommendation and 
considers it is already taking the recommended 
action. See also the Commission's reply to recom -
mendation 2. 
The Commission will continue to impose financial 
corrections wherever it finds that Member States’ 
first-level checks are insufficiently effective. When 
serious deficiencies are detected, preventive and 
corrective measures such as actions plans, inter -
ruptions and financial corrections are implemented 
ensuring the legality and regularity of past and 
future expenditure declared to the Commis -
sion. Payments are not resumed until systems are 
improved and close supervision is carried out after 
the implementation of the remedial actions to 
ensure that the management and control systems 
of programmes do not deteriorate again. 
For persistent legal breaches of the public procure -
ment directives the Commission will continue to 
pursue infringement procedures where necessary. Recommendation 4
The Commission accepts this recommendation, which 
is partially implemented, and supports initiatives 
leading to enhancements in public procurement. 
It is envisaged to have regular contact between the 
relevant Commissioners responsible for ESIFs and 
the internal market in a format to be decided. This 
group could invite external stakeholders, whenever 
judged useful. The Commission also supports the 
idea of providing leadership at a high level and 
notes that the directors of DGs REGIO and GROW 
have been meeting regularly since July 2014. Experi -
enced external stakeholders have already been 
invited at this level.
103
Insufficient effectiveness of management verifi -
cation on first-level checks is a cause of serious 
concern for the Commission. In the framework of 
its supervisory role, the Commission is carrying out 
since 2010 targeted audits on management verifica -
tions of high-risk programmes where it has identi -
fied that important level of errors resulting from 
such risks could remain undetected or not detected 
in a timely manner by the programme audit author -
ity. Such audits lead, where necessary, to action 
plans to remedy the identified deficiencies. These 
audits contribute to improvements in the manage -
ment and control systems for programmes put 
under reservation, ensuring that past and future 
expenditure declared to the Commission is legal 
and regular. 
A document called ‘Guidance on management 
verifications’ was discussed with Member States in 
2014 and 2015, and will be published in July 2015. 
It includes a section dedicated to verifications of 
public procurement. This is not part of the public 
procurement action plan since it covers manage -
ment verifications of all types.
Reply of the Commission 64
105
The Commission supports e-procurement, for 
example the eTendering pilot of eSens on cross-
border interoperability. 
For the 2007-2013 programming period, there was 
no obligation for Member States to implement 
anti-fraud strategies via data-mining tools, such as 
Arachne (see Commission's reply to paragraph 94). 
The Commission anticipates further growth in the 
number of users for the 2014-2020 period. For this 
period, Arachne can be an effective element to miti -
gate fraud risk. 
Recommendation 6 (a)
The Commission accepts the recommendation. As 
e-procurement, in particular, improves transpar -
ency, facilitates cross-border tenders and access by 
SMEs and streamlines administrative procedures, 
the 2014 directives lay down a number of e-pro -
curement obligations and their correct and quick 
transposition is a priority for the Commission. 
As regards data-mining tools, the Commission 
is taking the recommended action. It is actively 
promoting the use by responsible national authori -
ties of Arachne, a preventive risk-scoring tool it has 
developed. This tool may bring significant improve -
ments in management verifications, but also in the 
prevention and detection of various risks related, 
for example, to public procurement procedures, 
conflicts of interest and the concentration of grants 
under particular operators. It can also help identify -
ing red flags of fraud suspicion. The Commission is 
aware and supportive of the use of other compara -
ble data-mining tools.
Recommendation 6 (b)
The Commission accepts the recommendation and 
notes that it is addressed to the Member States.
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Failure to comply with public procurement rules has been 
a perennial and significant source of error in EU cohesion 
expenditure. Serious errors resulted in a  lack, or complete 
absence, of fair competition and/or in the award of contracts 
to those who were not the best bidders. The Court of 
Auditors found that the Commission and Member States 
have started to address the problem, but there is still a long 
way to go and efforts need to be intensified.
EUROPEAN
COURT
OF AUDITORS