EN    EN EN 
internal reference 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 16.10.2009 
SEC(2009) 1427 final 
COMMISSION STAFF WORKING DOCUMENT 
accompanying the REPORT FROM THE COMMISSION TO  THE EUROPEAN 
PARLIAMENT on the follow-up to 2007 Discharge Decisions 
 
 
{COM(2009) 526}  
EN    EN TABLE OF CONTENTS 
INTRODUCTION................................................................................................................... ... 1 
COMMISSION STAFF WORKING DOCUMENT accompanying the REPORT FROM THE 
COMMISSION TO THE EUROPEAN PARLIA MENT on the follow-up to 2007 
Discharge Decisions..................................................................................................... 2 
Main conclusions .............................................................................................................. 3  
Statement of Assurance .................................................................................................... 5 Budgetary management - financial correc tions, amounts recovere d and suspension of 
payments........................................................................................................... 10 
Annual summaries of audits and declarations  available in the shared-management field, 
and national management declarations............................................................. 12 
Control systems............................................................................................................... 1 6 
Transparency................................................................................................................... 23 
Financial Regulation....................................................................................................... 28 Anti-Fraud Office (OLAF) ............................................................................................. 29 Own resources................................................................................................................. 3 2 
Agriculture and natural resources................................................................................... 33 Fisheries subsidies .......................................................................................................... 37  
Cohesion ....................................................................................................................... .. 39 
Internal policies.............................................................................................................. . 44 
External actions............................................................................................................... 57 
Non-governmental organisations (NGOs) ...................................................................... 63 Development................................................................................................................... 6 4 
Pre-accession strategy..................................................................................................... 70 Administrative expenditure............................................................................................. 79 Follow-up measures in the light of the discharge........................................................... 82 Special Report No 6/2007 on the effectiveness of technical assistance in the context of 
capacity development ....................................................................................... 83 
Special Report No 1/2008 concerning the pr ocedures for the preliminary examination 
and evaluation of major investment  projects for the 1994-1999 and 2000-2006 
programming periods........................................................................................ 87 
Special Report No 2/2008 concerning  Binding Tariff Information (BTI)...................... 90 
EN    EN Special Report No 3/2008 on the European Union Solidarity Fun: how rapid, efficient 
and flexible is it?............................................................................................... 91 
Special Report No 4/2008 concerning the im plementation of milk quotas in the Member 
States which joined the European Union on 1 May 2004 ................................ 92 
Special Report No 5/2008 - The Europ ean Union's agencies: Getting results ............... 94 
Special Report No 6/2008 concerning European Commission Rehabilitation Aid 
following the Tsunami and Hurricane Mitch.................................................... 96 
Special Report No 7/2008 on Intelligent Energy 2003-2006 ....................................... 100 Special Report No 8/2008 - Is cross-compliance an effective policy? ......................... 102 Special Report No 9/2008 - The effectiven ess of EU support in the area of freedom, 
security and justice for Bela rus, Moldova and Ukraine ................................. 104 
Special Report No 11/2008 - The management of the European Union support for the 
public storage of cereals ................................................................................. 108 
European Development Funds...................................................................................... 110 Requests to the Commission in reso lutions concerning the agencies........................... 120 
EN 1   EN INTRODUCTION 
This Commission Staff Working Document completes the Report from the Commission to the 
Parliament on the Follow-up to 2007 Disc harge Decisions {COM(2009)XXX final}. It 
presents in detail the answers to the 203 specific requests made by the European Parliament in 
the comments accompanying its Resolutions on the 2007 Discharges1. 
                                                 
1 For each specific request a reference is given to th e relevant Parliament document. The references for 
requests 1-169 are a ll for the 2007 General Budget Discharge. 
EN 2   EN COMMISSION STAFF WORKING DO CUMENT accompanying the 
REPORT FROM THE COMMI SSION TO THE EUROPEAN 
PARLIAMENT on the follow-up to 2007 Discharge Decisions 
EN 3   EN Main conclusions 
1. The European Parliament notes considerab le improvements in th e field of Research 
and Technological Development (RTD) fina ncial management where error rates 
were reduced by more than 50% in the space of three years; invites the Commission 
to continue its simplification efforts in order to improve the use of programmes by 
final beneficiaries.  (§ 4)  
Commission's response:  
FP7 has brought about a number of impor tant simplifications already. The 
introduction of the participants guarantee fund allowed to considerably reduce the 
number of ex-ante financial checks an d the use of protective measures, and 
replaced the collective financial responsibi lity of the contractors as laid down in 
FP6. The introduction of the certifica tion of the beneficiary's accounting 
methodology in FP7 contributes to a reduct ion in the number of required audit 
certificates and will limit ex-post controls . The unique registration facility for 
participants avoids repeated requests to beneficiaries and improves data quality 
and coherence in all grant management systems. Further improvements will be 
achieved by the gradual introduction of fu lly electronic exchange systems for the 
whole chain of proposal and grant manageme nt procedures in the frame of the e-
FP7 initiative. 
2. The European Parliament remains concerned about the lack of EU capacity in crisis 
management; considers that the Union is losi ng its political compass, visibility and 
accountability when using international trus t funds which could have been managed 
by the Commission if it had respected di scharge reports 2005 and 2006 and built up 
its own post-crisis instrument; is greatly con cerned at the lack of control of EU funds 
implemented by certain UN agencies and th e unwillingness of UN agencies to follow 
up on fraud cases where EU funds are involved.  (§ 6 + § 163)  
Commission's response:  
The Commission is continuously working towards achieving its aim of a fully 
integrated and comprehensive EU response capacity to contribute to a safer and 
more secure Union. As a further contri bution, the Commission is elaborating an 
inventory of Community policies and inst ruments for the management of crises. 
This is a step towards improving visibility  and transparency on crisis management 
instruments of the Commission and of Agencies. It should enable improved 
effectiveness of actio n, as a quick reference guid e in support of scenarios for 
operations inside and outside the EU.  
The Commission will investigate making proposals (within the context of the 
revision of the Financial Regulation) to  allow the Commission to set up and 
manage multi-donor trust funds. The issu e of the use of the EC operational budget 
to cover related administrative costs will also be examined. 
Recent evaluations of the Commission's  cooperation with partner countries 
through the UN and aid delivery through the EIB and the development banks 
conclude that such inter ventions resulted in added valu e and tangible results, in 
EN 4   EN particular for the larger trust funds. In  addition, participation in such initiatives 
enabled the Commission to intervene in poli tically sensitive areas, where it would 
otherwise have been impossible to deliver  aid. However the Commission recognises 
that exactly because of the political sens itivity of its interventions in crisis 
management, more attention should be paid to  its visibility as political and delivery 
actor. The Commission was able to benefit from the field presence and expertise of 
its multilateral partners in terms of implementation. 
Under the terms of the Financial and Administrative Framework Agreement 
(FAFA) the EC anti-fraud office (OLAF) can use the verification clause to 
perform on the spot checks on UN activ ities to which EC funds contribute. Anti-
fraud enquiries are dealt with by c ooperation between OLAF and the anti-fraud 
services of each UN organisation concer ned. The Commission has also regularly 
drawn the attention of the UN to OLAF's re sponsibilities in cases of suspected 
fraud or irregularity in relation to Commission funds. Moreover the 6th Annual 
FAFA Working Group meeting, which took place in April 2009, agreed on terms 
of reference for financial verification missions, which will make these missions 
even more effective. 
As regards UN operations in Kosovo, the Commission would like to specify that the 
UN's involvement in EU-funded projects in Koso vo is at present li mited to it acting 
as a contractor for projects in a limited number of specific areas: 
- UNDP on minorities return and reintegr ation in Kosovo (3.7 MEUR under IPA, 
project running until 4/2010); 
- UNOPS on vetting of judges (5 MEUR und er Instrument for Stability, project 
running until 10/2009).  
Concerning the follow-up to findings of the Investigation Task Force (ITF), 
following the ITF's liquidation, UNMIK tran sferred all ITF case files to the EU's 
rule of law mission in Kosovo, EUL EX. EULEX have confirmed receipt. The 
Commission will continue to keep in cl ose and regular contact with EULEX on 
any developments relating to the files concerned. The continuity of ITF functions 
in Kosovo is ensured by the Office of Internal Oversight Se rvices (OIOS), which 
supervises UN funded operations, by OL AF, which ensures the EU's financial 
interests are protected, and by the Financial Intelligence Unit, which operates 
within the framework of EULEX. 
EN 5   EN Statement of Assurance 
3. The Commission should pay due attention to  the comments presented by the Court of 
Auditors in order to improve the comp rehensiveness and accuracy of the basic 
accounting data.  (§ 10)  
Commission's response:  
The Commission always takes into account the remarks and recommendations of 
the Court of Auditors so as to try to imp rove the quality of its accounting data and 
accounts. 
4. The Commission should give further specif ication concerning the annexed notes on 
the other amounts to be called from Member States, totalling EUR 27.900.000.000.  
(§ 11)  
Commission's response:  
The Commission has implemented the requ est. More details on these amounts 
were given in the provisional 2008 accounts. 
5. Consideration should be given to establis hing a Community pension fund in order to 
externalise the financial co mmitments vis-à-vis staff.  (§ 11)  
Commission's response:  
The European Communities Pension Scheme is defined in the Staff Regulations. 
When in 2003, the Commission presented a proposal amending the Staff 
Regulations, due consideration (backed-up  by a complex actuarial study) was 
given to setting-up a pension fund. How ever the analysis did not conclude in 
favour of such a change. Initial set-up co sts as well as risks of losses by the fund 
due to the investment climate and po licy would be particular concerns. 
The Commission considers that the hypothese s and conditions of this analysis have 
not changed and therefore that the conclusions remain valid. 
The amount of EUR 27.9 billion stated in the accounts, and to which the European 
Parliament refers in point 11 of its resolution,  is the net amount of all the EC's liabilities 
less all the EC's assets. In fact, details of amounts to be paid from future budgets are 
already given in the balance sheet itself and th e notes to the accounts (primarily under the 
heading current liabilities).  
6. The Commission should put forward a proposal concerning the accounting treatment 
of major European projects (Galileo or  TENs) which require funding which goes 
beyond the scope of the multiannual financial framework and which it cannot therefore control.  (§ 12)  
EN 6   EN Commission's response:  
The EC accounting rules, based on the International Public Sector Accounting 
Standards (IPSAS) are already sufficient to allow the Commission to account for 
such activities. 
7. The Commission should examine the possibility of including in the annual accounts 
provisions for major maintenance and refurbishment work on the European 
Communities' buildings stock, given the lack of a buildings depreciation schedule broken down by specific component and setting out the main tangible fixed assets to 
be replaced at regular intervals. Such  provisions for major maintenance or 
refurbishment works should be backed by multiannual upkeep programmes designed to keep buildings in a good state of  repair without pr olonging their life.  (§ 13)  
Commission's response:
 
The Commission will not be taking the re quested action. The inclusion of such a 
provision would be clearly contrary to the EC accounting rules (these rules being 
based on the internationally accepted International Public Sector Accounting 
Standards, IPSAS). 
8. The Commission should properly verify that , in the absence of  a capital tie-up, the 
European Communities' level of political authority in the agencies included in the consolidated accounts complies with in ternational public-sector accounting 
standards.  (§ 14)  
Commission's response:
 
As part of its modernisation of the accoun ting system project, the Commission has 
examined the necessary issues surroundin g the consolidation of the European 
Communities Agencies so as to ensure  that they comply with the relevant 
accounting rules.  
The consolidation of the European Commun ities Agencies is based on the control 
concept and in accordance with the Eur opean Communities accounting rule based 
on International Public Sector Accounting Standards, IPSAS, (see also 2008 
European Communities annual accounts section 1.3 "Controlled entities"). 
Control is defined by IPSAS 6 as "the power to govern the financial and operating 
policies of an entity so as to be able to  benefit from the en tities activities." The 
existence or ownership of share capital is just one indication of control.  
The Commission confirms that, as the agenc ies are created by a secondary act of 
European Communities legislation, th ey are considered as being under the 
exclusive control of the European Comm unities (not the Commission.) While the 
Commission, through its accounting services , makes the physical consolidation, 
the overall "parent company" is the Eu ropean Communities. Furthermore, the 
consolidation of the European Communities' agencies is explicitly foreseen by the 
Financial Regulation (Art. 121). 
EN 7   EN 9. The Commission should clarify the possi bilities under the Staff Regulations of 
appointing ‘non category’ senior  officials, unless specifica lly mentioned in the staff 
establishment plans, in the last step of the AD16 grade.  (§ 15)  
Commission's response:  
The non-category staff (listed under HC in  the establishment plans) mentioned by 
the European Parliament concern 6 posts in  the establishment plans of Parliament 
(1 permanent post), Council (2 permanen t posts), the Court of Auditors (1 
temporary post), the Economic and Soci al Committee (1 tem porary post) and the 
Committee of the Regions (1 temporary post). 
These positions have been created by the bu dgetary authority in the establishment 
plans of the institutions concerned and the actual appointing of persons on these 
positions is the sole responsibility of the AIPN of these institutions. 
10. The Commission should analyse and strive s for simplification of complicated or 
unclear legal requirements in extremely important Community spending areas (agricultural spending excluding the EAGF, cohesion, research, en ergy and transport, 
external actions, e ducation and culture).  (§ 17)  
Commission's response:
 
The Commission agrees that high error rates are partly due to complex eligibility 
rules. It acknowledges that simplificatio n has a role to play in improving the 
implementation of EU policies and reduci ng error rates, but points out that a 
certain degree of complexity in rules and eligibility crit eria is unavoidable as these 
are often fixed in order to achieve desire d policy objectives and are the outcome of 
a complex legislative procedure. The Commission has committed itself to seeking 
simplification where possible and will pursu e this objective further. The impact of 
simplification will be visible in  the medium- to long-term.  
For example, the Commission recognises th at the legal framewor k in the Cohesion 
policy area is complex, and that this incr eases the risk of errors at beneficiary 
level. The Commission has proposed measures to simplify some of the present rules 
and is exploring the scope for further s implifications. For the Structural Funds, 
the simplification implemen ted in the 2007-13 legislation will start to become 
visible in the error rates the Court is det ecting on the ground in the declaration of 
assurance (DAS) 2010 at the earliest. Fu rther simplification is already being 
prepared and will be proposed shortly, but will of course take correspondingly 
longer to have an impact on the Court's results.  
As another example, the 7th Fram ework Programme for research and 
technological development (FP7) has brought about a number of important 
simplifications already. The introductio n of the participants  guarantee fund 
allowed to considerably reduce the numbers of ex-ante financial checking, the use 
of protective measures and the number of  required audit certificates. The unique 
registration facility for participants avoids  repeated requests to beneficiaries and 
improves data quality and coherence in al l grant management sy stems. The project 
reporting was streamlined, including re duced data requirements, simplified 
reporting guides and longer reporting periods. Further improvements will be 
EN 8   EN achieved by the gradual introduction of fu lly electronic exchange systems for the 
whole chain of proposal and grant manage ment processes in the frame of the e-
FP7 initiative. 
The Commission has also taken action in s everal ways to improve the situation in 
rural development, for example: The Council Regu lation 1290/2005 gave way for 
the-post 2007 period to align the man agement and contro l system for the 
expenditure under the newly created European Agricultural Fund for Rural 
Development (EAFRD) with the EAGGF guar antee system. Thus, in the future, 
the advantages of the EAGF Gu arantee system that are larg ely recognized will also 
cover the rural development expenditure. 
As far as the Directorate-General fo r Education and Culture (DG EAC) is 
concerned the design of the new programmes 2007-2013 has taken into account 
the Court of Auditors' recommendations of previous years to simplify the rules and 
to make more use of lump sum financings . This is intended to further reduce the 
error rate. 
The Commission is currently working to identify possible areas of further 
simplification in the context of its preparat ory work for the triennial revision of the 
Financial Regulation. It could focus in particular on grants, in particular 
eligibility rules; management methods, wh ose provisions have become increasingly 
complex and which are crucial to improve the efficiency and delivery of external 
aid in particular; and contro l measures. The degree of comp lexity of the eligibility 
rules has a direct link with the intensity and cost of controls required to gain 
reasonable assurance on the legality and regu larity of transactions. If simplified 
eligibility rules are decide d and effectively implemen ted (e.g. increased use of 
lumps-sums and flat rates, acceptance of th e use of national eligibility rules in case 
of co-financing by Member States) the under lying transactions will be less prone to 
error, which will allow to perform less exte nsive controls (controls can be focussed 
on output rather than input) and ulti mately reduce the cost of controls. The 
Commission is also working on the concept of tolerable risk of error, which seeks 
to identify the intensity of the controls wh ich is most cost-effective, i.e. to provide 
an appropriate balance between costs and be nefits (reduction in error rates). 
11. The Commission should further step up it s monitoring of controls delegated to 
Member States and give them clear guidan ce on how to prevent, identify and correct 
errors, and where Member States' contro l systems remain ineffective, it should 
compel Member States to meet their obligations and make the necessary improvements, in particular by impos ing payment suspensions and financial 
corrections.  (§ 18)  
Commission's response:
 
The Commission is taking  the requested action. 
In the Cohesion policy area  Member States have to submit annual control reports 
describing the audit work done and the findings of that work. These reports are 
discussed with the Commission at annual bilateral audit coordi nation meetings. In 
the 2007-13 period audit bodies will use a common sampling methodology and will 
indicate in their control reports the e rror rates found, which will thus provide a 
EN 9   EN better pointer to the effectiveness of thei r control systems and help the Commission 
to target its own audit work on the higher-risk programmes. 
Guidance on the day-to-day checks by ma nagement bodies and the certifying 
authority and on audit sampling has alre ady been issued and the Commission is 
investing considerably in providing training  for national officials who are expected 
to disseminate the information and guidan ce received in their home countries. The 
main guidance documents are being coll ected in an Audit Reference Manual, 
which will be finalised in 2009. 
The Commission is using its powers of  imposing payments suspensions and 
financial corrections in order to compel  improvements in systems to a greater 
extent than in the past. In 2008 over EUR 1.5 billion of financial corrections and 
10 suspension decisions were impose d, compared with EUR 330 million of 
corrections and one suspen sion decision in 2007. 
EN 10   EN Budgetary management - financial correctio ns, amounts recovered and suspension of 
payments 
12. The European Parliament considers with  regard to shared or decentralised 
management, however, that the Commission must apply Regulation (EC, Euratom) 
No 1605/2002 in full and assume its ultimate responsibility for budget implementation, and emphasises the need to make financial corrections as soon as 
irregularities uncorre cted by Member States are detect ed, without waiting for the end 
of the multiannual cycle.  (§ 20)  
Commission's response:
 
The Commission is taking  the requested action. 
The Structural and Cohesion Fund regu lations provide the means by which the 
Commission discharges its ultimate respon sibility for the proper execution of the 
budget in the Cohesion policy area. Th ese include both preventive and corrective 
mechanisms. 
The Commission takes action to remedy weakn esses in control systems giving rise 
to irregularities as soon as it becomes aw are of them. In such cases it agrees the 
implementation of an action plan with th e Member State concerned. These result 
not only in improvements in systems but al so in financial corrections to remove 
irregular expenditure from past claims. The Commission services have accelerated 
the procedures for suspension of paymen ts and financial corrections during the 
programme period. Details can be found in the report on the implementation of the 
Action Plan of 19 February 2008 to streng then the Commission's supervision of 
Member States in relation to shared  management of structural actions 
(COM(2009) 42). In the 2007-13 period, th e heads of the Structural Fund 
departments will be able to interrupt payments even more rapidly. 
While most irregular expenditure should  be corrected during the programme 
period, the closure procedure provides an essential safety net at the end of the 
control cycle. 
13. The European Parliament notes with c oncern the problems surr ounding recovery of 
irregularly disbursed Commun ity funds and the poor quality  of the data supplied on 
the correction mechanism applied at Memb er State level, which, on occasion, are 
contradictory and incomplete as regards c ohesion policies, and th e fact that, with 
regard to agriculture, the ECA has doubts as  to the reliability of the information 
supplied (paragraphs 3.26 and 5.44 of the 2007 annual report); 
 Points also to the importance of the final decisions and corrective measures taken 
with the aim of excluding from Community  funding expenditure which has not been 
carried out in conformity with Community legislation, and restat es its call for the 
precise budget heading and the year to wh ich individual recoveri es relate to be 
specified, in keeping with st andard practice in the agriculture and natural resources 
sector; 
EN 11   EN  Calls on the Commission to enhance the e fficiency and effectiveness of multiannual 
recovery systems, including at Member St ate level, and to consolidate data on 
recoveries and financial co rrections, in particular in  the areas covered by the 
Structural Funds, in order to provide reliable figures which can be compared between the various policy areas and fund manageme nt procedures; calls on the Commission 
to report to Parliament in the notes accompanying the annual accounts, so that an overview can be obtained; 
 Calls, in view of the persistence of rec overy-related problems, fo r the system to be 
evaluated.  (§§ 21-24)  
Commission's response:
 
Changes have been made to the ABAC financial system in 2008 to allow the 
tracing of recoveries to specific errors or i rregularities detected. This has allowed it 
to already present more complete and reliable r ecovery figures in the 2008 
accounts. Thus the Commission will contin ue to include in the notes to the 
accounts its own financial corrections. Th e Commission commits itself to continue 
the efforts to improve the qua lity of information produced by the Member States on 
financial corrections, withdrawals and recover ies. This information is included in 
Annex to the annual report on the implement ation of the Structural Funds. It will 
continue to report to the budgeta ry authority on this issue. 
Furthermore, the Commission will pursue on going efforts and will not hesitate to 
proceed to financial corrections where n ecessary. Within the legal framework, the 
Commission has taken steps, under the Action plan of 19 February 2008 to 
strengthen its supervision of Member Stat es in relation to shared management of 
structural actions, to ensure that irregula rities found in the implementation of the 
Structural Funds are dealt with as soon  as they are detected and financial 
corrections are applied promptly. Also, in  agriculture the Co mmission has already 
taken action to improve the reliability of information provided by Member States 
by revising its Guidelines for financia l year 2008 and by closely monitoring the 
situation by audit missions in 2008. 
EN 12   EN Annual summaries of audits and declarations  available in the shared-management field, 
and national management declarations 
14. The Commission should ensure that annual summaries of audit by the Member States 
be published together with the Commi ssion’s assessment and should also be 
forwarded to the Parliament's committee resp onsible in the course of the discharge 
procedure.  (§ 26)  
Commission's response:  
The Commission is taking  the requested action. 
An evaluation of the annual summaries is given in the Annual Activity Reports of 
the Directorates General concerned and is  also made availa ble to Parliament. 
The Commission supports the transmissi on of the annual summaries to the 
Budgetary Control Committee. However, this disclosure can only take place with 
the agreement of the Member States . The Commission is requesting their 
agreement. 
15. The Commission should analyse the summaries received in 2009 with the aim of 
optimising their added value in terms of the assurance they provide regarding the 
operation of the internal control systems employed by the Member States and should 
include an analysis of the annual summa ries submitted by Member States in the 
annual report pursuant to Ar ticle 86(4) of Council Regulation (EC, Euratom) No 
1605/2002, using as benchmarks the provisions  of the Interinstitutional Agreement 
on budgetary discipline and sound financial management.  (§§ 27 and 28)  
Commission's response:  
The Commission has taken the requested action. 
The 2009 Annual Activity Reports of the Dire ctorates General for Regional Policy 
and Employment give an assessment of the contribution made by the annual 
summaries to the assurance regarding th e operation of Member States’ control 
systems that is presented in the re ports. The summaries may make such a 
contribution particularly when they contain an analysis of problems or an actual 
statement of assurance. The Commission will continue to encourage Member 
States to add value to the summaries in  this way. Compared to 2007, for 2008 all 
Member States respected the obligation set in Article 53b(3) of the Financial 
Regulation to provide an annual summary and complied or mostly complied with 
the minimum requirements. For 2008 th e Commission issued new and better 
guidelines for the annual summaries under structural funds.  
For agriculture an evaluation has been submitted to Parliament on the statements 
of assurance from the directors of the paying agencies and the related opinions 
from the certification bodies as well as the annual summaries from the 
coordination bodies which the Commission had received for agricultural 
expenditure. The Directorate-General for Agriculture and rural Development also 
informed on the annual summaries in  its annual activity report for 2008. 
EN 13   EN As the annual summaries are not subject to  audit by the Internal Auditor of the 
Commission, his annual report under Article  86(4) of the Financial Regulation 
cannot contain such an analysis. 
16. The Commission should regularly present a qua litative and quantitative evaluation of 
the annual summaries in the activity reports and make this information available to 
all the parties concerned, and to the public, during the discharge procedure; the first 
of these assessments should be transmitte d by September 2009 and, in addition to an 
annual formal presentation to Parliament, th is analysis of annual summaries should 
also be circulated to all national pa rliamentary public accounts committees.  (§§ 29 
and 30)  
Commission's response:  
The Commission has taken the requested action. 
The Annual Summaries do not, on their own, provide sufficient information to 
assess the strengths and weaknesses of Me mber States’ management and control 
systems for the Structural Funds. The Commission makes its assessments, which 
are published Member State by Member State and programme by programme in 
the Directorates’ General Annual Activity  Reports, from numerous sources, the 
chief ones being its own audit work and th at of the European Court of Auditors 
and the reports received from Member States on the results of the work their own 
audit authorities have carried  out, which are discussed at annual bilateral audit 
coordination meetings with the Commissi on. Other information used includes 
Member States’ reports on financial correct ions, irregularities reported to OLAF 
and complaints. The annual summaries co ntribute to the assurance of the 
Commission when they contain analysis of  problems, identify good practices, and 
provide an overall statement of the Member  State’s assurance on their systems. Not 
all the summaries yet do so, and the Com mission is therefore continuing to 
encourage the Member States to add va lue to the summaries in such ways.  
The Commission thus could not meet the request in Parliament’s 2007 discharge 
resolution for an assessment of the strengths and weaknesses of control systems on 
the basis of the annual summaries in isolation. Instead, the assessment was 
provided in the Annual Acti vity Reports on the basis of the usual sources of 
assurance available. The same is true fo r the assessments in the Annual Activity 
Reports for 2008. 
An assessment of the 2008 annual summ aries has been presented in the 
Directorates’ General Annual Activity Repor ts, which are published along with the 
Synthesis Report. To enable Parliament  to make its own assessment, the 
Commission has requested the agreement of Me mber States to disclose the texts of 
annual summaries to the Bu dgetary Control Committee. 
Reference is made to the letter of Vice-President Kallas to Mr Bösch dated 7 April 
2009. 
17. The Commission should carry out, after th ree years, a comprehensive evaluation, 
analysing the added value of the annual summaries for the sound financial 
EN 14   EN management of EU funds in the Member  States, as well as the degree of 
independence of the auditors involved.  (§ 31)  
Commission's response:  
The Commission agrees that a stocktak ing of the added value of annual 
summaries after three years would be useful . By then the situation regarding the 
content of the annual summaries and th e extent and useful ness of voluntary 
national declarations will have stabilise d, and there will be more information 
available about the effectiveness of the co ntrol framework for Cohesion policy in 
the 2007-13 period and in particular about how appropriate the reporting 
requirements are in that framework and whether they need to be strengthened. 
The Commission does not consider it neces sary to assess the independence of 
national auditors in connec tion with the review of annual summaries. The audit 
authorities for structural funds progra mmes are required to be functionally 
independent, to comply with interna tionally accepted audit standards and to 
demonstrate this in their audit strate gies submitted to the Commission for 
approval. The Commission will verify this in  performing its own audit work of the 
national audit authorities. It does not consider that a specific study of the 
independence of audi tors is necessary. 
18. The Commission should declare what  it has done for introducing national 
management declarations in all Member  States, taking into account previous 
discharge resolutions, and urgently to ma ke all necessary efforts to upgrade the 
annual summaries so that they carry the same political weight as the national 
management declarations; the Commission should use its right of initiative to propose a Council decision to make na tional declarations compulsory.  (§ 32)  
Commission's response:
 
The Commission will continue to support Me mber States that have moved towards 
national declarations and will continue to provide all national supreme audit 
institutions with annual reports on payme nts made in their Member State. The 
Commission has been available to discuss wi th Member States the basic issues on 
the preparation of national declarations  and has participated in events organised 
for this purpose (such as a meeting in  Hague in December 2008, where 21 Member 
States were present). The Commission is analysing those declarations and 
statements which have been provided, with the aim of defining the key aspects of 
format and scope which add value. 
Responding to a Commission proposal, Council declined to make national 
declarations compulsory in November 2005. Instead it agreed to provide annual 
summaries of available audits and declar ations, in agreement with the terms of 
Article 44 of the Interinstitutional Agreement of 17 June 2006. This hard won 
political agreement, supported firmly by the Commission, was converted into 
provisions in the revised Financial Regu lation (Article 53b), adopted unanimously 
by Council in December 2006, and in its implementing rules. The Commission 
continues to take various steps to impro ve the added value of annual summaries.  
EN 15   EN The revised guidelines on annual summaries  for structural actions issued in 2008 
repeat the encouragement to undertake an  overall analysis to increase the added 
value of the informatio n transmitted and propose a standard statement of 
assurance, which, if used, could come closer to a declaration. The recommended 
standard statement reads:  
"Based on the results of the above certification of expenditure and audit 
summaries, it is my opinion that fo r the year ended 31 December 20.. the 
management and control systems for______ structural measures established for 
the programming period 2000-06 and for 2007-13 complied with the applicable 
regulatory requirements and functioned effectively so as to  provide reasonable 
assurance that statements of expenditure  certified to the Commission are correct 
and, as a consequence, reasonable assurance of the legality and regularity of the 
underlying transactions." 
The Commission welcomes the initiative by seven Memb er States to append an 
assurance statement to their annual summa ries for 2008 as is  suggested in the 
revised guidelines. Together with the four national management declarations 
received for 2008, this brings to 11 the number of Member States providing some 
sort of national assurance. 
EN 16   EN Control systems 
19. Manuals, guidance notes and participation rules applicable to  grants should be 
consolidated and Parliament should be involved in discussion on simplifying the 
implementing rules.  (§§ 36 and 37)  
Commission's response:  
The Commission is taking  the requested action. 
The form in which information is given  to beneficiaries on the rules and 
conditions attached to EU funding is important. It can considerably reduce the 
administrative burden if this documentation is  consolidated in an easily digestible 
form. In the shared management area this is the responsibility of Member States. 
The Commission encourages them to prov ide information in such a form, and 
plays its own part in simplifying the implementation of the rules by issuing 
guidance which brings together the requir ements and translates them into good 
practices. For example, the Commission has made available a digest of the 
eligibility rules for Cohesion policy in the 2007-13 period and it is consolidating 
the guidance notes on control and audit requ irements in a single Structural Funds 
Audit Reference Manual.  
Such documents are for use by the Member  States’ management  and audit bodies. 
They will tend to be incorporated into pr ocedure manuals for use by the staff of 
such bodies, but for beneficiaries a more  succinct and user-friendly presentation 
will clearly be needed. 
20. The Commission, along with Member Stat es and regions, should accelerate the 
simplification exercise of regulati ons whilst fully involving Parliament.  (§ 38)  
Commission's response:  
The Commission is taking  the requested action. 
The Commission is engaged in examining th e legal provisions for Cohesion policy 
in the 2007-13 period with a view to amending the regulations to introduce 
simplifications of the rules approved in  2006. Some amendments, for example on 
flat rates and revenue-generating investmen ts, have already been passed into law. 
The remaining ones will be enacted shortly. Parliament is fully involved in this 
process in accordance with the applicable procedures. 
21. The Commission should review the conditions for using the flat-rate method so as to 
increase reliability in beneficiaries' interest.  (§ 39)  
Commission's response:  
Lump sums and flat rate are currently  used extensively in the Marie Curie 
Programme; lump sums have been also established for use by international co-
operation partner countries (ICPC) partners and flat rates for CONCERTO 
actions. Flat rates for indirect costs are also available for certain participants. The 
EN 17   EN Commission has examined the potential use of  flat rates and lump sums under the 
current legal framework and, as a result of  this exercise, is in the process of 
introducing flat rates to cover subsis tence costs incurred by beneficiaries. 
Additional ways of introducing flat ra tes and lump sums representing genuine 
simplification for applicants and complying at  the same time with the principles of 
sound financial management would require changes to the legal basis (revision of 
the Financial Regulation, Framewor k Programme participation rules). 
The Commission has also taken steps to si mplify rules for structural actions by 
amending the relevant legislation to expan d the use of flat rates, lump sums and 
unit costs to all types of expenditure  for both ERDF and ESF. The Commission 
will consider proposing further measures in 2009 to simplify the implementation of 
the Funds on the basis of recommendations of a joint Commission/Member State 
working group.  
The Commission will present its proposal for the future Financial Regulation 
before May 2010. The simplification of rules, in particular for the award and 
control of grants, is one of the main objectives assigned to this exercise. 
22. The implementation of Action 4 of the Acti on Plan towards an in tegrated internal 
control framework, concerning the launching of  an interinstitutional initiative on the 
basic principles to be consid ered regarding the risks to be  tolerated in the underlying 
transactions should be sped up.  (§ 40)  
Commission's response:  
In 2006 the Commission proposed a text in the Financial Regulation concerning 
the tolerable risk of error (within the dead lines laid down in the action plan for an 
integrated control framework).  The proposal was rejected by Council at the end of 
2006.  The Commission immediately started gath ering data on control costs in the 
Member States, which gave rise to the Communication from the Commission of 
16 December 2008 “Towards a common understan ding of the concept of tolerable 
risk of error” (COM(2008) 866). 
23. The Commission is reminded of the importance of Action 10 of the Action Plan, 
which proposes making an 'analysis of the costs of controls', in view of the 'need to reach an appropriate bala nce between the costs and benefits of controls'.  (§ 41)  
Commission's response:
 
The Commission presented an analysis of the costs of control for certain policies 
(structural funds and agriculture) in  its Communication of 16 December 2008 
“Towards a common understanding of the concept of tolerable risk of error” 
(COM(2008) 866).  The Commission undertook to analyse these costs in each 
budget sector by 2012 within the framework of action to develop an approach 
based on tolerable risk of error. 
24. The annual activity reports of the dire ctorates-general should include, again, 
information on the quality of, and improveme nt in, controls in the Member States, 
and the Commission should grade all paym ent agencies and certification bodies.  (§ 
42) 
EN 18   EN Commission's response:  
The requested action has been taken.  The Commission already assesses the 
effectiveness of national control systems in the Annual Activity Reports of the 
Directorates General. It will continue to  promote quality of the annual summaries 
and to encourage Member States to increase their added value.  
It will also continue to present an anal ysis of the quality of the systems in the 
annual activity reports and also to use al l of the information at its disposal to 
present an assessment of Member States' systems in the reports. 
25. The Commission should present regular as sessments of the integrated internal 
control system, and better coverage is expe cted – in the annual activity reports and 
the synthesis report – of Commission depa rtments' and Member States' shared-
management systems, in particular as  regards technical quality and ethical 
considerations, e.g. the level of inde pendence of national audit authorities.  (§ 43)  
Commission's response:  
The Authorising Officers by Delegation alre ady provide, in their Annual activity 
Reports (part 2), a general appreciation of th eir internal control systems and a full 
explanation of weaknesses id entified. Specifically concer ning shared management, 
a clear link between the strands of contro l exercised both by the Commission and 
the member states' administrations has to be demonstrated, evidence should be 
provided on the effectiveness of control sy stems and an assessment of the quality of 
annual summaries has to be presented. 
The Synthesis Report, which is set up on the basis of the assurances and 
reservations made in the Annual Activit y Reports, puts in place measures to 
remedy any weaknesses identified and inst ructs the Commission services to take 
action to address the causes of reservatio ns in their annual ac tivity reports and to 
regularly monitor progress. 
26. The Commission should carry out a more co mplete and exhaustive evaluation of the 
resources given over to control systems,  by spending area, for all Union spending 
areas, as called for by Parliament in its disc harge resolutions in previous years and in 
view of the ‘getting results’ concept.  (§ 44)  
Commission's response:  
The Commission believes that a tolerable risk approach represents a sound and 
efficient stewardship of EU funds. It pr esented a communication on this issue in 
December 2008 (COM(2008) 866), using stru ctural funds and rural development 
as illustrative examples.  
Further data-gathering will be needed to underlie firm proposals on tolerable risk. 
The nature of the work required and ti ming will vary according to the different 
policy areas and will be focused on expe nditure governed by 2007-13 legislation. 
As the statistics on the costs of control from this programming period will become 
progressively available over the next two years, the Commission plans to provide 
analyses of the tolerable risk of error, for the different polic y areas, progressively 
EN 19   EN in the time period until the end of year 2012. It will make concrete proposals for 
tolerable risk in the areas of research, energy and transport and rural development 
in the first half of 2010 and on extern al aid, development and enlargement and 
administrative expenditure in the latter half of 2010. 
27. On the basis of the annual summaries r eceived, the Commission should analyse the 
strengths and weaknesses of each Memb er State's national system for the 
administration and control of Community funds , together with an estimate of the cost 
of national systems for the control of Community funds; this comparative analysis 
should be sent to Parliament, Council a nd the Court of Audito rs in early 2010, and 
serve as a basis for an interinstitutional  dialogue on the tolerable risk of error.  (§§ 45 
and 46)  
Commission's response:  
The Commission is taking  the requested action. 
As noted in the response to the requests in paragraphs 29 and 30 of the European 
Parliament's resolution, the Annual Summa ries do not, on their own, provide 
sufficient information to assess the stre ngths and weaknesses of Member States’ 
management and control systems for th e Structural Funds. The Commission 
makes its assessments from  numerous sources and pub lishes them Member State 
by Member State and programme by pr ogramme in the Directorates’ General 
Annual Activity Reports. 
The Commission will continue to encourage the Member States to add value to 
annual summaries so that they make a bigger contribution to the Commission’s 
assurance on systems. 
With regard to the cost of national cont rol systems, the Commission has already 
carried out a survey of the costs of contro ls in the structural actions area whose 
results were used in the Commission's communication towards a common 
understanding of the concept of tole rable risk of erro r (COM(2008) 866). 
Proposals for cohesion policy will be made  by the end of 2012 on the basis of 2010 
payments, which will be the first year the majority of Structural Funds execution 
will be under the 2007-13 period legislation. 
28. The Commission should use the work  done under the Communication on the 
tolerable risk of error further when prepari ng its proposal on tolerabl e level of risk by 
budgetary area, especially for structural f unds and the EAFRD; the dialogue between 
the external auditor and the auditee should continue to comply with international 
auditing standards which stipulate that it is for the external auditor to decide.  (§ 48)  
Commission's response:  
As mentioned in the reply to paragr aph 44 of the European Parliament's 
resolution, further data-gathering will be  needed to underlie firm proposals on 
tolerable risk. The nature of the work re quired and timing will  vary according to 
the different policy areas and will be fo cused on expenditure governed by 2007-13 
legislation. As the statistics on the cost s of control from this programming period 
will become progressively available over th e next two years, the Commission plans 
EN 20   EN to provide analyses of the tolerable risk of error, for the different policy areas, 
progressively in the time period until the end of year 2012.  
The Commission fully recognises the Court's  independent role, but points out that 
the auditor’s determination of materiality  is a matter of professional judgment 
taking into account legislators' and regu lators' expectations as regards the cost-
effectiveness of controls and non-compliance, as set out by the international 
standards of supreme audit institutions (ISSAI 1320).  
The tolerable risk of error - which as sugge sted by the Court should be decided by 
the political authorities - would inform the Court's judgement on materiality.  
As the Commission has already indicate d in its communicati on COM(2008) 866, it 
would not be appropriate for the Commission, as  the auditee, to fix a tolerable risk 
level. 
29. The Commission should compile fresh statistics  as to the reliability of data provided 
by Member States [on costs of control], plus  an in-depth analysis thereof, once the 
impact of the 2007-2013 rules becomes clear an d forward that analysis to Parliament 
and the Council before the end of 2011.  (§§ 49 and 50)  
Commission's response:  
The Commission has undertaken to present a new study on the costs of controls 
and tolerable risk of error in the Stru ctural Funds. This will be focused on 
expenditure governed by 2007-13 legislation (2010 data) and, as th is analysis will 
need to take account also of the Court's DAS errors for 2010 (for which the 
Court's annual report will be published in  November 2011), it will be presented 
during 2012. 
30. The Commission should ensure a close tie-in  between tolerable le vel of risk and an 
in-depth study into the cost-effectivene ss of Commission and Member State control 
systems for each Community spending area.  (§ 51)  
Commission's response:  
The concept of tolerable risk requires the definition of cost-effe ctiveness of control 
systems. As mentioned in the reply to paragraph 44 of the European Parliament's 
resolution, further data-gathering will be  needed to underlie firm proposals on 
tolerable risk. The nature of the work re quired and timing will  vary according to 
the different policy areas and will be fo cused on expenditure governed by 2007-13 
legislation. As the statistics on the cost s of control from this programming period 
will become progressively available over the next two years, the Commission plans 
to provide analyses of the tolerable risk of error until 2012. 
31. The Commission, with the technical support of  the Court of Audito rs, to carry out an 
in-depth analysis in the areas of resear ch, external relations and administrative 
expenditure, and to submit a report on the findings before the end of 2010.  (§ 52)  
EN 21   EN Commission's response:  
The requested analysis will be delivered be fore the end of 2010, see also the reply 
to paragraph 44 of the European Parliament's resolution. 
32. The volume of Community funds lost because  of errors should also be taken into 
consideration when a tolerabl e error rate is determined.  (§ 53)  
Commission's response:  
Errors, once detected, give rise to financ ial corrections and recoveries, so that 
normally no European funds are lost.  
The Commission presented in its Communication towards a common 
understanding of the concept of toler able risk of error (COM(2008) 0866) an 
economic analysis of the concept (comparin g the costs of control with the amounts 
of error which would be likely to be detected  and corrected). It is clear that under a 
tolerable risk approach the Commission would need to continue to make recoveries 
where it detects errors. The tolerable risk level fixed would therefore relate to the 
estimated error rate in transactions or pr ojects which have not been subject to on 
the spot controls.  
In this respect, any decision on a tolerable risk level has to be taken by the Council 
and Parliament, and would be based on a joint consideration of the political 
imperatives, the benefits of a policy (also non-financial), the inherent and 
reputational risks, the impact of any furt her simplification, and the additional cost 
associated with reducing erro r rates through more control. 
33. Tangible proposals should be produced w ith regard to improving the management 
and control of Community spending a nd, for some aspects, a degree of 
harmonisation, and, during the forthcoming bud getary procedure, Parliament should 
give the Commission the resources needed  to undertake a study. The Commission 
should without delay submit its proposals for achieving the objective of a positive 
DAS.  (§§ 54 and 55)  
Commission's response:  
In recent years, the Commission has put significant efforts into improving its 
control systems, following recommendatio ns made by the Court of Auditors and 
the Discharge Authority. It has set up ac tion plans to address the deficiencies 
noted by its own audit work or those by the external auditor - notably the action 
plan towards an integrated internal co ntrol framework and th e action plan to 
strengthen the Commission's supervisory role for Structural actions. Also, an 
impact report on the action plan towards an integrated internal control framework 
was adopted by the Commission in earl y 2009 (COM(2009) 43). The Commission 
is, on a continuous basis, further improvi ng its control systems and those of its 
partners where it identifies weaknesses. 
The context and scope of such a study can only be defined during 2010 and will 
depend on the progress made in the Inter-Institutional discussions on tolerable 
risk, on which the Commission has committed  to make concrete proposals for the 
EN 22   EN areas of research, energy and transport an d rural development in the first half of 
2010 and on external aid, development and enlargement and administrative 
expenditure in the latter half of 2010. 
EN 23   EN Transparency 
34. Study the possibility of creating with th e European Parliament a common mandatory 
register for lobbyists.  (§ 56)  
Commission's response:  
The Commission seeks the full collaboration of the European Parliament (EP) on 
this issue. A high-level EP-Commission group agreed on 22 April to create a 
common register for interest representatives. 
35. The Commission should establish a new code of conduct for its Members, so as to 
improve and define more clearly thei r individual and collective political 
responsibility and accountability for their decisions and for the implementation of 
their policies by their services.  (§ 57)  
Commission's response:  
The Commission considers that the existin g code of conduct for Members of the 
Commission already contains comprehensive and appropriate rules on 
responsibility and ethics. As regards ethi cal rules, the independent study carried 
out by the European Institute for Public Administration in co-operation with the 
Utrecht School of Governance, the Universi ty of Helsinki and the University of 
Vaasa, which was released by the Commission on 11 December 2007, concluded 
that the European Commission system is sound, and that the necessary rules and 
procedures are in place. The Commissi on will nevertheless also analyse the 
external study commissioned by the European Parliament (Committee on 
Budgetary Control) on the “The code of conduct for Commissioners – improving 
effectiveness and efficiency”. The opinions in the report as well as the experience 
gained by the Commission in the implementa tion of the code of conduct will feed 
the Commission's reflexion about possibl e further improvement of the existing 
framework. 
36. The Commission should ensure the complete ness, searchability and comparability of 
data provided on the beneficiaries of EU funding.  (§ 58)  
Commission's response:  
The Commission believes it has fulfilled its obligations with respect to the current 
requirements. 
In relation to funds that are centrally ma naged by the Commission, information is 
presented through the Financial Transparency System, which provides complete, 
searchable and comparable data. 
In relation to funds under shared manageme nt, the responsibility for the provision 
of data on beneficiaries lies on the rele vant management authority (see art 30 of 
the Financial Regulation). 
EN 24   EN The Commission has adopted implementing regulations or issued guidance notes 
to ensure that the quality and timeliness of  the data is guaranteed within each of 
these policy areas, or has negotiated agreemen ts with the relevant institutions (e.g. 
international organisations and third countries). The Commission encourages 
Member States to publish this information in the most appropriate and user-
friendly way allowing for potential co mparison between the Member States. 
Furthermore, it has set up a web portal on  the Europa site where all available links 
to relevant websites are provided. 
The Commission considers that  the information it provides, through a portal or a 
website, is presented in a clear, ha rmonious and searchable manner. The 
information provided, originating from th e Commission services or from Member 
states' administrations, generally complies with the existing EU law and, when it 
does not, the Commission takes the necessary action to remedy the situation. 
37. The Commission should ensure complete tr ansparency and publicity  with regard to 
the cabinet staff of Members of the Commission not  recruited in accordance with the 
Staff Regulations.  (§ 59)  
Commission's response:  
The Commission underlines that the rule s governing the composition of the 
Cabinets and the Spokespersons are based on principles of rigour and 
transparency and are set out in a document proposed by the President and agreed 
by the College, SEC(2007)2602. 
Officials are seconded to the cabinets in the interest of the service and temporary 
agents are employed in accordance with  the specific rules adopted by the 
Commission. Special Advisers might be recr uited by Commissioners on the basis of 
a transparent procedure but in any case, these do not belong to Commissioners' 
Cabinets. 
Cabinet staff are subject to the Staff regu lations or the Conditions of Employment 
of Other Staff of the Communities like al l the other staff assigned to Commission 
services (the only exception being the so called "blue book tr ainees", but there 
again there is no difference between those a ssigned to a cabinet and those assigned 
to services). 
38. In relation to the publication of the names of recipients of EU funds, the Commission 
should assess the usefulness of the inform ation published by the Member States in 
the light of the policy objectives set forth.  (§ 60)  
Commission's response:  
The Commission regularly monitors the adequacy and the compliance of the data 
it communicates regarding the beneficiarie s of EU funds and it also regularly 
monitors the functionalities of the different websites an d search tools implemented 
by the Member States. 
In order to facilitate access to this information, the European Commission's 
Directorate General for Region al Policy operates a clickab le map with the links to 
EN 25   EN the beneficiaries' lists published on the ma naging authorities' websites. The map is 
accessible from the Inforegio website: 
http://ec.europa.eu/region al_policy/country/commu/ben eficiaries/index_en.htm 
For agriculture, there is now a web page with  links to the different Member States' 
websites publishing information on payments to beneficiaries according to the new 
legislation (EAFRD 2007 as from 30 September 2008 and EAGF-EAFRD 2008 as 
from 30 April 2009). Due to legal procedures by some beneficiaries and to 
local/regional court decisions, the Germ an publication was delayed until 16 June 
2009. Since this publicatio n was covering all Länder except Bavaria, the 
Commission initiated an infringement procedure against Germany. However, the 
Land of Bavaria announced on 13 July 2009 th at it will start pu blication of data as 
from August 2009. The Commission services have assessed the different Member 
States' websites and the various functio nalities of the se arch tool. Some 
shortcomings have been noticed as regards the way the data are published (for 
instance, limitation of results shown, no search tool) and as regards the content 
(public storage not specified), reasons for which reminding letters have been sent 
to all Member States but Belgium, reques ting them to remedy the problems by 30 
September 2009. 
See http://ec.europa.eu/agriculture/funding/index_en.htm 
Information on beneficiaries of the Europe an fisheries Fund is as yet limited, but 
this is linked to the fact that very few Member States have actually made payments 
under the new programmes. A portal leading to the existing national websites 
exists: 
http://ec.europa.eu/fisheries/cfp/struct ural_measures/transparency_en.htm  
The same situation applies for the fo ur funds managed under the programme 
Solidarity and Management of Migr ation flows. Relevant portal:  
http://ec.europa.eu/justice_home/fundi ng/intro/funding_solidarity_en.htm  
In the fields of external relations, th e Commission has negotiated agreements with 
international organisations and third count ries. Links to the relevant websites is 
available through the following portal: 
http://ec.europa.eu/europeaid/wo rk/funding/beneficiaries_en.htm 
39. The Commission should enter the money from the ex-Economat off-budget bank 
accounts in the ordinary budget befo re making proposals for its use.  (§ 61)  
Commission's response:  
The requested action has been taken. The amounts from the ex-Economat have 
been transferred to the Commission's bank accounts (value 21.4.2009) and at the 
same time the corresponding off budget accounts have been closed. 
1. As regards the follow-up to the 2006 and 2007 discharge resolutions. 
EN 26   EN In September 2005 the Commission's Accounting Officer drew up an inventory of 
all bank accounts not established by the Accountant to evaluate if the existence of 
the account was still justified. No irregulari ties were found in the management of 
these funds, which included the ex-Economat accounts. 
Regarding the latter, the conclusion was that their continued existence was no 
longer justified and they were thus to be  closed and the sums transferred to the 
Community budget. 
Since the Commission's decision of  12 November 2008 concerning the 
Commission's ex-Economat off budget bank accounts(COM(2008)692) was taken, 
the funds have been transferred from the external bank accounts to the 
appropriate Commission's budget lines an d the accounts have been closed. 
2. As regards the information of the budgetary authority. 
On 12 November 2008 the Commission transm itted its Communication concerning 
the Commission's ex-Eco nomat off budget bank acco unts (COM(2008)692) to the 
European Parliament and to Council.  
The European Parliament has been full y informed since the decision of ex-
Economat off budget bank accounts was t aken. Moreover a de tailed explanation 
has been provided to Parliament thro ugh the Commission's to parliamentary 
questions. To respond to Parliament's concern about this issue Vice President 
Kallas sent a letter to President Pöttering on 3 March 2009.  
The Commission gave detailed replies, orally in plenary and in writing, to 
parliamentary questions E-4819/05, H-0212/06, H-0758/06, E-5524/06 and E-
5697/08 complemented by letters from Commi ssioner Grybauskaité to Dr Grässle 
on 10 March, 23 March 2006, 2 June 2006, 13 October 2006 and again on 12 June 
2008. 
3. As regards the Commission's participation in the European Parliament's fitness 
centre. 
Over the years an amount of 2.8 million € had accumulated on two bank accounts 
from the operational surplus of the "Eco nomat" i.e. from the difference between 
revenues from sales to staff and operating co sts and from the sale of its stocks to 
Delhaize, when this activity was contra cted out by the Commission in 2002. Since 
then, the amounts on the bank accounts continued to generate interests.  
Given the source of the sums on the account s, i.e. an operating surplus mainly due 
to sales to staff and their fa milies, it was decided to use the funds for social projects 
benefiting the staff. 
One of the four projects is the Commis sion's contribution to the European 
Parliament's fitness centre. Given the recent decision of the Bureau of the 
European Parliament on the scope of the project, the Commission might review its 
position as soon as the scope and calendar of the follow-up project to the current 
renovation is defined more clearly. 
EN 27   EN 40. The Commission should ensure that a co mprehensive, easily accessible public 
database containing information on all final beneficiaries of EU funding be available 
before the next European elections.  (§ 62)  
Commission's response:  
The Commission has set up the Financial Transparency System which provides 
complete, searchable and comparable data on funds centrally managed. 
A portal on the Europa site provides links to national websites where information 
responding to the implementing rules and guidelines adopted is provided. 
EN 28   EN Financial Regulation 
41. The Commission should present by 1 Janua ry 2010 proposals for a revised and fully 
consolidated Financial Regul ation with chapters specifi c to individual expenditure 
programmes which bring together all the requirements which a beneficiary of a 
programme must fulfil in one single comprehensive source and with further 
simplifications as re gards the award and control of  grants; the Commission should 
engage in consultations with the other institutions at a ve ry early stage and the next 
3-yearly review should be carried out by means of the conciliation procedure.  (§§ 64 
and 65)  
Commission's response:  
The Commission will present its proposal fo r the future Financial Regulation in 
accordance with the provisions of the Financ ial regulation currently into force, i.e. 
before May 2010. 
As was the case in the past, the future Financial Regulation will be discussed and 
negotiated in close cooperation with the Parliament and Council and in 
accordance with the legislati ve procedure foreseen in the EC Treaty. In particular, 
if the Lisbon Treaty has entered into for ce, the future Financial Regulation will be 
co-decided by the European Parliament and the Council. Otherwise, the Financial 
Regulation will be adopted as currently, which includes the recourse to the 
conciliation procedure with the European Parliament (Article 184 of the Financial 
Regulation).  
Concerning the content of the future Financial Regulation, the Commission can 
confirm that the simplification of rules, in particular for the award and control of 
grants, is one of the main  objectives assigned to this exercise. However, a 
consolidation would entail an integration in  the FR of all exceptional measures in 
acts that have been decided by co-decision  (for example, the par ticipation rules for 
the 7th Framework Programme). The selection and attribution criteria are specific 
depending on the nature of the actions and are defined per programme. If these 
were integrated in the FR, the latter wo uld become “illegible”. Furthermore, the 
Treaty foresees for certain policies (Resea rch) that specific rules can be adopted, 
whose inclusion in the FR would empty the basic acts of any substance. 
In accordance with established prac tice, DG BUDG will carry out informal 
preparatory discussions with the other Institutions and organs before the adoption 
of the Commission's proposals. 
EN 29   EN Anti-Fraud Office (OLAF) 
42. The Commission should give to OLAF immedi ate access to its databases if this is 
necessary in connection with an investigation, so that investigations can be opened 
and conducted without delay.  (§ 66)  
Commission's response:  
In compliance with the regu lations in place OLAF must and does have immediate 
access to any information held by the Co mmission and required to conduct an 
investigation. 
It is the Commission policy to give to OLAF immediate access to its databases if 
this is required for an investigation or in  the evaluation phase, linked to a specific 
case included in OLAF's Case Management System (CMS). 
43. The Commission should ensure that bene ficiary third countries give OLAF all 
necessary assistance during on- the-spot inspections and ch ecks, together with all 
relevant information on follow-up to inve stigations carried out; the Commission 
should ensure that all future contracts sti pulate that the authorit ies of the countries 
concerned must fully cooperate with OLAF.  (§ 67)  
Commission's response:  
The requested action has been taken. 
The Commission has already incorporated a standardised provision to this effect 
into the General Conditions of all types of standard Financing Agreements with 
beneficiary third countries (cf. Article 20 of the General Conditions of the standard 
financing agreement under decentralised EU Budget; cf. Article 15 of the GGCC 
of the standard financing agreement under centralised EU Budget; cf. Article 19 
of the GGCC of the standard financing agreement under FED Budget). All future 
contracts will (continue to) stipulate that the authorities of the countries concerned 
must fully cooperate with OLAF. 
44. The Commission should use all the powers av ailable to it under th e Treaties to bring 
about effective cooperation among nationa l authorities in the fight against 
Community fraud.  (§ 68)  
Commission's response:  
Contacts are very frequent between OLAF  and the national judicial authorities 
and OLAF is aware of what is going on  at national level. While the Commission 
fully respects the independence of Member  State police and judicial authorities, 
there is of course room for improvement. 
The figure of 6.7% mentione d by the European Parliament in its resolution comes 
from the recent workshop organised by th e Committee on budgetary control of the 
European Parliament on 19 February 2009 and could lead to misinterpretation. 
Figures were provided at the request of the rapporteur, Mrs. Grässle, by OLAF on 
EN 30   EN final follow up results covering the 3 years from January 2006 to December 2008. 
Judicial procedures take on average far longer than 3 years so the period is too 
short to draw any meaningful conclusions. 
45. The European Parliament notes with  concern that between 2006 and 2008 only 37 
out of 222 internal investiga tions gave rise to disciplin ary proceedings and that, of 
these 37 investigations, only two produced ge nuine consequences, three were halted 
for lack of evidence and the other 32 – i. e. 87% – have yet to  produce results; calls 
on the Commission to undertake to pursue inte rnal investigations just as vigorously 
as external investigations and to ensure th at those investigations  which have not yet 
given rise to effective discip linary follow-up produce results.  (§ 69)  
Commission's response:  
The Commission is reviewing its disciplina ry practice with the aim of accelerating 
the procedure, a.o. through a better collaboration between OLAF and the 
Investigation and Disciplinary Office of the Commission (IDOC). In particular, 
cases transferred from OLAF w ill be handled without delay. 
The figure of 87% does not correspond to all cases: it is based on a list of 27 cases 
recently transferred by OLAF. It has also to be noted that since the beginning of 
2009, 2 more cases resulted in a disciplinary penalty and 4 others are waiting for 
the Disciplinary Board's reasoned opinion  which could be delivered before the 
summer break (situation June 2009). 
The Commission services are currently inve stigating the possibilities to increase 
the efficiency of the process and to impose disciplinary measures within a shorter 
time. The recent modification of the tabl es laying down the Appointing Authority 
contributes to this aim. 
46. The Commission should establish a m echanism for exchanges of information 
between OLAF and the Member States c oncerning the follow-up to Community anti-
fraud investigations; in particular, th e Commission should ensure that national 
judicial authorities keep OLAF regularly  informed, by means of progress reports, on 
the outcome of the judicial action taken in the fight against Community fraud, 
following the forwarding of OLAF files.  (§ 70)  
Commission's response:  
The Commission agrees on the importance to improve judicial follow up but is not 
convinced that compulsory reporting is the most efficient approach. OLAF’s 
judicial and legal advice unit was given ex tra staff to cover better the national 
judicial systems of the di fferent Member States. OLAF which is in regular and 
close cooperation with the authorities of th e Member States aims to build further 
on its Europe wide network of special ised magistrates to improve information 
exchange and identify best practice. There is of course  always room for 
development and improvement. 
The second protocol to the Convention on  the protection of financial interests 
enters into force on 19 May 2009. It has been  ratified by most Member States and 
provides specifically for direct cooperation between the European Commission and 
EN 31   EN the judicial authorities of the Member St ates in the protection of the Community's 
financial interests. 
EN 32   EN Own resources 
47. The Commission should see to it that wh en the new own resources decision comes 
into force, and backdated to 1 January 2007, GNI data including FISIMs will be used 
to calculate Community own resources and that, on that basis, past and future 
payments by the Member States will be calculated afresh.  (§§ 71 to 73)  
Commission's response:  
The requested action has been taken. The Commission "proposal for a Council 
Decision on the allocation of financial in termediation services indirectly measured 
(FISIM) for the establishment of the Gr oss National Income (GNI) used for the 
purposes of the European Communities' budget and its own resources", adopted 
on 26 May 2009 (COM(2009)238fin al) provides for the re troactive allocation of 
FISIM to GNI for own resources purpos es from 1 January 2005 - the date the 
allocation of FISIM became compulsory in the European System of Accounts 
(ESA95) (pursuant to Article 2 of Commission Regulation (EC) No 1889/2002 of 
23 October 2002). 
EN 33   EN Agriculture and natural resources 
48. Simplify, strengthen and consolidate the control rules in the rural development 
expenditure, and in particular in the e xpenditure on agri-environmental measures.  (§ 
74) 
Commission's response:  
The requested action has been taken in the rural development area, where most of 
the errors appear (the EAGF part of agric ulture expenditure has an error rate 
below materiality). 
- Member States are obliged to ensure that all rural development measures are 
verifiable and controllable. Member States  must also make sure that the rules 
concerning eligibility are respected.  
- These issues were discussed intensel y between the Commissi on and the National 
Authorities before the rural devel opment programmes for 2007-2013 were 
approved. 
- The Commission has given extra guid ance to Member States on how to 
implement agri-environment measures. 
- Audit missions will take a closer look at the origin of  higher error rates in agri-
environmental measures. 
- The higher error rates in rural development, in particular agri-environmental 
measures seem to be due to the complex nature of the policy rather than problems 
in the controls. 
The Council Regulation 1290/2005 provides for the-post 2007 period to align the 
management and control system for the expenditure under the newly created 
European Agricultural Fund for Rura l Development (EAFRD) with the EAGGF 
guarantee system. Thus, in the future , the advantages of the EAGF Guarantee 
system that are largely recognized wi ll also cover the rural development 
expenditure. 
49. Take the appropriate measures, consisting of  at least simplifying the policy together 
with ensuring clearer and consistent cont rol systems, to correct the errors in 
interpreting the provisions of the regulations as quickly as possible and to inform 
Parliament in late 2009 about the measures taken  (§ 77)  
Commission's response:  
The requested action has been taken. Th e Commission has addressed this issue in 
the Health Check: In the past, the Court has stated clearly that the design and 
implementation of the SPS limits the risk of  irregular payments to farmers. The 
CAP Health Check agreement brings furthe r simplification (e.g. reducing the types 
of entitlements, possibility to merge entitlements) and more decoupling of 
payments (e.g. arable crops, seeds, hops, animal premia). Further decoupling 
means in terms of administra tion a better controllability and that no more specific 
EN 34   EN sectoral criteria have to be respected (i.e . to verify that the coupled crop has been 
indeed produced), but only the general rules of SPS. 
The Commission has already reported to the Parliament on these simplification 
actions, notable in its A nnual Activity Report on 2008 and thus sees the 
information request by end 2009 by  the Parliament as fulfilled. 
The Commission will continue the path of simplification. A communication on 
simplification of the CAP was published in March 2009. This document outlines 
the activities that have b een carried out since the 2005 Communication, take stock 
of the progress that has been made an d sketch out ideas for future action. 
The communication was welcomed in the May Council conclusions, in which the 
Commission was invited to take further ac tion in simplifying the CAP, including 
considering the 39 concrete Member State suggestions until the next Council 
meeting in November 2009 under  the Swedish Presidency. 
In addition, besides CAP specific projects , DG AGRI is actively involved in the 
Simplification Rolling Programme, which in cludes all simplification activities of 
the Commission as well as the Action Programme for Reducing Administrative 
Burdens. This Action Programme is established with a view to the overall objective 
of reducing administrati ve burden by 25% by 2012. 
50. Suspend payments in the framework of the Integrated Administration and Control 
System in Greece if the Greek authorities ar e unable to prove that the problems have 
been resolved by 31 December 2009.  (§ 78)  
Commission's response:  
The requested action has been taken. The Commission was ready to suspend 
payments in case the action plan would not have been implemented by the 31 
December 2008, the date foreseen. The la test update from Commissioner Fischer 
Boel (dated 12 March 2009) confirms that Greece has complied with its action plan 
and has created a new, operational LPIS. The new system will be used by the 
Greek authorities for the first time during the 2009 claims procedure. The 
Commission will continue to closely monito r the IACS procedure in Greece. Also, 
the ongoing conformity clearance procedur es covering the financial risks resulting 
from deficiencies for the years 2006- 2008 will continue. For the future, the 
Commission confirms it will apply appropriate measures proportionate to the 
eventual weaknesses. 
51. Urges the Member States, in cooperati on with the Commission, to step up their 
checks as regards the Single Payment Scheme  management and control and the area-
aid eligibility checks, in particular as  regards beneficiaries' compliance with 
eligibility requirements.  (§ 81)  
Commission's response:  
The Commission has taken the requested action. The Commission has addressed 
these problems in the Health Check: 
EN 35   EN - Member States will have the possibility to exclude beneficiaries from the SPS who 
do not have their main economic activity in agriculture, a point often criticized by 
the Court and in public. 
- Simplification of the entitlements: the rules will be the same for normal 
entitlements and those coming from the national reserve; if a farmer doesn't use 
entitlements for two years, they revert to th e national reserve. In the longer run, 
also special entitlements will be phased ou t, which means that there will only be 
one type of entitlements in stead of three under the current legal situation. 
52. Clarify and simplify the elig ibility requirements of the Single Payment Scheme as far 
as possible.  (§ 81)  
Commission's response:  
The requested action has been taken. The Commission has addressed these 
problems in the Health Check: 
- Member States will have the possibility to exclude beneficiaries from the SPS who 
do not have their main economic activity in agriculture, a point often criticized by 
the Court and in public. 
- Simplification of the entitlements: the rules will be the same for normal 
entitlements and those coming from the national reserve; if a farmer doesn't use 
entitlements for two years, they revert to th e national reserve. In the longer run, 
also special entitlements will be phased ou t, which means that there will only be 
one type of entitlements in stead of three under the current legal situation. 
The Commission will continue the path of simplification. A communication on 
simplification of the CAP was published in March 2009. This document outlines 
the activities that have b een carried out since the 2005 Communication, take stock 
of the progress that has been made an d sketch out ideas for future action. 
The communication was welcomed in the May Council conclusions, in which the 
Commission was invited to take further ac tion in simplifying the CAP, including 
considering the 39 concrete Member State suggestions until the next Council 
meeting in November 2009 under  the Swedish Presidency. 
In addition, besides CAP specific projects , DG AGRI is actively involved in the 
Simplification Rolling Programme, which in cludes all simplification activities of 
the Commission as well as the Action Programme for Reducing Administrative 
Burdens. This Action Programme is established with a view to the overall objective 
of reducing administrati ve burden by 25% by 2012. 
53. The Commission must propose measures to reform the clearance system to make it 
possible to establish clear and valid links  between amounts recovered and the amount 
of irregular payments and ensure, as far as possible, that th e cost of financial 
corrections is met by the final beneficiarie s and not by the taxpayer and that flat-rate 
corrections are applied to those Member St ates which fail to meet their obligations.  
(§ 83)  
EN 36   EN Commission's response:  
The requested action has been taken. The current clearance of accounts practice 
already reflects that "as far as  possible, that the cost of financial corrections is met 
by the final beneficiaries and not by the taxpayer and that flat-rate corrections are 
applied to those Member States whic h fail to meet their obligations". 
1. Under the principle of shared manage ment, the recovery of irregular payments 
from the final beneficiaries is the sole  responsibility of Member States. The 
conformity clearance, in contrast, is designed to exclude expenditure from 
Community financing which has not been executed in compliance with 
Community rules, thus shielding the Co mmunity budget from expenditure that 
should not be charged to it (financial corrections). 
2. Financial corrections are determined on the basis of the natu re and gravity of 
the infringement and the financial damage  caused to the Community. Wherever 
possible, the Commission calculates the am ount on the basis of the loss actually 
caused or on the basis of an extrapolation. However, this often requires the 
cooperation of the Member State concerned which alone is in po ssession of all the 
financial information required. Only where th is is not possible, flat-rates are used 
which take account of the severity of th e deficiencies in the national control 
systems in order to reflect the financia l risk for the Community. Therefore, it 
would be wrong to say that there is no link between the amount of the financial 
corrections and the level of irregular payments made to final beneficiaries. 
3. Where irregular payments to final benefi ciaries are or can be identified as a 
result of the conformity clearance proced ures, Member States are required to 
follow them up by recovery actions against the final beneficiaries. Moreover, the 
new 50/50 rule enshrined in Article 32(5) of Council Regulation (EC) No 
1290/2005 is a strong incentive for Member States to ensure an expeditious and 
effective recovery of irregu lar payments from the final beneficiaries. However, 
recovery from the final beneficiaries is often not possible because the financial 
corrections only relate to deficiencies  in the Member States' management and 
control systems and it is primarily in these cases that the corrections take the form 
of flat rates. Still, such financial corr ections are an important means to improve 
these systems and, thus, to prevent or de tect and recover i rregular payments to 
final beneficiaries in the future. 
EN 37   EN Fisheries subsidies 
54. Exclude Member States which fail to im plement adequately the rules of the CFP 
from Fisheries Partnership Agreements;  (§ 87)  
Commission's response:  
The current legal framework does not allow for it. However, according to Article 5 
of Council Regulation (EC) No 1006/2008 con cerning authorisations for fishing 
activities of Community fishing vessels outside Community waters and the access 
of third country vessels to Community wa ters, a Member State may not submit to 
the Commission applications for a fishing au thorisation for fishing vessels flying 
their flag who do not respect a fisheries agreement. 
55. Introduce EU legislation th at excludes all vessel owne rs convicted of serious 
infringements in accordance with Council Regulation (EC) No 1447/1999 from receiving Community aid under the European Fisheries Fund and/or benefiting from 
Fisheries Partnership Agreements  (§ 88)  
Commission's response:
 
Regulation(COM(2008)0721): Article 82 (1) of this proposal est ablishes that the 
range of sanctions and measur es provided for in Chapter IX of Council Regulation 
(EC) No 1005/2008 apply to Community fishing vessels or nationals of Member 
States. Article 45 (7) of Council Regu lation (EC) No 1005/2008 foresees the 
temporary or permanent ban on access to public assistance or subsidies, as an 
accompanying measure to the sanctions pr ovided for in Chapter IX of Council 
Regulation (EC) No 1005/2008. 
56. Ensure that Community aid is not used to  modernise fleet segments characterised by 
overcapacities  (§ 89)  
Commission's response:  
This is already the case. The use of aid to  modernise fleet is a competence of the 
Member States. However, according to Articles 6(5) and 25(2) of Council 
Regulation (EC) No 1198/2006, operations fi nanced by the EFF shall not increase 
fishing effort, and the aid sh all not increase the ability of the vessel to catch fish. 
57. Reminds the Commission of its commitments, within the framework of the EU 
Sustainable Development St rategy approved by the Europ ean Council in Göteborg in 
June 2001 and revised by the European Counc il in Vienna in June 2006, to abolish 
environmentally damaging subsidies and to put forward by 2008 a roadmap for the reform, sector by sector, of these subs idies with a view to eliminating them  (§ 90)  
Commission's response:
 
The Commission has been mainstreaming th e issue into its different sectoral 
policies. For example: In the area of fisheries, the 2002 reform of the Common 
Fisheries Policy (CFP) made already importa nt progress in the right direction, in 
EN 38   EN particular by moving towards better inte gration of environmental concerns into 
fisheries management and by removing some  of the financial support that directly 
contributed to overcapacity. The Green Paper on the reform of the CFP of April 
2009 launched a public consultation which is ongoing and covers inter alia the 
question of public financial support to fish eries that contradict s CFP objectives. In 
the framework of the Health Check of the Common Agricultural Policy the 
Commission promoted agricultural aid that  is oriented towards sustainability 
objectives. New State aid guidelines on environmental protection were adopted in 
2008 (OJ No C 82, 01.04.2008, p.1.), which strike a balance between delivering 
larger environmental benefi ts and minimizing distortions of competition, thus 
helping Member States to develop sustainable environmental policies. 
The Budget review will also provide for an opportunity to make sure that EU 
financing fully complies with the Union' s environmental and climate objectives. 
EN 39   EN Cohesion 
58. Report to Parliament in early 2010 on the further actio ns carried out in 2009 to 
improve management and control system s both at Member State level and at 
supervisory level at the Comm ission and on the initial imp act of the actions under the 
Commission's action plan.  (§ 94)  
Commission's response:  
The Commission is taking  the requested action. 
In the report on the implementation of  the action plan to strengthen the 
Commission's supervisory role for st ructural actions (COM(2009) 42), the 
Commission has committed itself to reporting  in early 2010 on the further actions 
carried out in 2009 and on the fi rst impact of all the actions. 
59. Continue the revision procedure and to simplify existing regulations without delay.  
(§ 95)  
Commission's response:  
The Commission is taking  the requested action. 
The Commission has continued the revision  of the 2007-13 rules with a view to 
amending the regulations to introdu ce simplifications. These include the 
Commission implementing regulation, Regulation 1828/2006, in which in 
particular simplifications to the system  for reporting irregu larities are being 
introduced. Reference is also made to  the response to paragraph 38 of the 
resolution. 
60. Make as much use as possible, without undermining the effectiveness of spending, of 
the scope for simplification provided for by the spending rules, and calls on the 
Commission to launch a discu ssion exercise on new simplification measures that 
might be adopted, including computerisati on of the system; exp ects the Commission 
to come forward with concrete simp lification proposals fo r the period 2007-2013 
based on the outcome of the proceedings  of the Simplification Working Group.  (§ 
96) 
Commission's response:  
The Commission is taking the requested actio n. It refers to the answer to point 95 
of the resolution. 
The systems for communications between Member States and the Commission on 
2007-13 programmes are fully computer ised in the “SFC 2007” network. 
61. Make an estimate of the positive impact of cohesion policy, by Member State, and to 
submit to it a report on its Union-level added value.  (§ 97)  
EN 40   EN Commission's response:  
The Commission has taken the requested action. 
It already publishes an Annual Report on  the Implementation of the Structural 
Funds and a Report on Economic and So cial Cohesion once every three years. 
62. Bring its control requirements into line w ith the frequency and se riousness of errors 
found under the European Regional Development Fund (ERDF) from 2000 to 2006 in the Member States most affected; calls also on the Commission to inform 
Parliament about its response to these high ra tes of error in the three Member States 
concerned (Spain, Italy & UK).  (§ 98)  
Commission's response:
 
The Commission has taken the requested action. 
The Commission's audit work is based on a comprehensive risk assessment, which 
is regularly updated. This risk assessment takes into account previous results, 
including the level of financial corrections , and leads to more rigorous audit work 
in more risky areas and programmes.  
The level of financial corrections made in 2008 as a result from EU audit work 
reflects the previous distribution of aud it work, based on the assessment of the 
risks at the end of 2007 and in previous years. As the risk a ssessment takes into 
account the level of funds allocated, it is  reasonable that programmes with higher 
volumes of EU funds are subject to more  EU audits and hence more corrections. 
In many cases the corrections result from  remedial action plans to clear out 
irregular expenditure due to general weaknesses in control systems or systemic 
errors. The current level of corrections is thus by no means always an indicator of 
the degree of further action required. 
A summary of the Commission’s current assessment of the effectiveness of systems 
in the different Member States  and the degree of risk atta ching to them is given in 
the Directorates’ General Annual Activity Reports for 2008. The Commission’s 
audit strategy for 2009 is based on its asse ssment of the residual  risk after taking 
account of the corrections applied. 
The figures for corrections resulting from EU  audits should also be taken together 
with the figures for recoveries reported by the Member States themselves, partly 
resulting from their own control and au dit work. A breakdown of these recoveries 
by Member State was given in an annex to the Commission's Annual Report on the 
Implementation of the Structural Fund s for 2007 (SEC(2008) 2649). There will be 
a similar breakdown in the 2008 implementation report. 
Thus, it would be mistaken to assume that Member States showing lower 
corrections resulting from EU  audit work in 2008 no long er need to improve their 
systems or that higher figures in certain Member States reveal a low level of 
control activity. 
63. Bring its control requirements into line w ith the frequency and se riousness of errors 
found under the Cohesion Fund from 2000 to  2006 in the Member States most 
EN 41   EN affected; calls also on the Commission to inform Parliament about its response to 
these high rates of error in the two Memb er States concerned (Greece & Spain).  (§ 
99) 
Commission's response:  
The Commission has taken the requested action. 
Parliament is referred to the respon se to paragraph 98 of its resolution. 
It should be noted that Greece and Spain account for the bulk of Cohesion Fund 
projects that have already been implemented  or closed. Therefore, the distribution 
of financial corrections is not surprising. 
64. Bring its control requirements into line w ith the frequency and se riousness of errors 
found under the European Social Fund (ESF) from 2000 to 2006 in the Member States most affected; calls also on the Commission to inform Parliament about its 
response to these high rates of error in th e two Member States concerned (Spain & 
Italy).  (§ 100)  
Commission's response:
 
The Commission has taken the requested action. 
Parliament is referred to the response to paragraph 98 of its resolution. Other 
important factors when drawing comparisons are the number of programmes and 
the management structure, whether at centr alized national or at regional level. 
As for the other funds, the audit work on  ESF programmes is targeted at the most 
risky Member States and programmes. For Spain in 2009 DG EMPL will carry out 
three follow-up audits and five audits to verify preparations for closure. As from 
2010 three audits will be carried out in Spain to verify the effectiveness of 
management and control systems for the 2007-13 period. For Italy four ESF audits 
for are planned in 2009. 
65. Continue to apply financial corrections, in confor mity with the regula tion in force, in 
order to remove any irregular items of expenditure declared at an earlier stage and to 
employ rigorous closure procedures for the 2000-2006 ERDF, Cohesion Fund and ESF programmes so that, when the accounts are closed, such ite ms of expenditure 
have been largely eliminat ed; calls on the Commission, fu rther, to continue to 
provide it with detailed information about the financial corrections applied and, once 
the closure procedure has started, to provide an estimate of the residual error rate in 
the programmes closed in this way.  (§ 101)  
Commission's response:
 
The Commission is taking  the requested action. 
It will continue to apply financial correct ions to remove irregular expenditure 
declared earlier and will employ rigorous cl osure procedures as a final safety net. 
It will also continue to provide Parlia ment with detailed information about the 
EN 42   EN financial corrections applied and once closure has started will attempt to provide 
an estimate of the level of residu al error in closed programmes. 
66. Continue to identify, in annual activity reports, contro l problems relating to shared 
management in the Member States, including at payment authority level, so as to 
identify the specific weaknesses, by Memb er State and by programme, and for there 
to be a direct tie-in between  reservations and those probl ems; calls on it to produce 
an annual grading of Member States, for each European fund, and to forward it to 
Parliament, specifying the error rate established.  (§ 102)  
Commission's response:  
The Commission is taking  the requested action. 
Annual Activity Reports identify problems with control systems, including those 
relating to paying authorities, and reservat ions are made to the Director General’s 
declaration in appropriate cases. 
The Commission cannot give an error rate per Member State, as comparable data 
are not yet available from Member States and the Commission itself does not audit 
a representative sample of transactions in all Member States every year. For the 
2007-13 period programmes, Member States will  be required to report error rates. 
67. Apply strictly the Community rules on th e suspension of payments where a Member 
State fails to provide  the guarantees sought.  (§ 103)  
Commission's response:  
The Commission is taking  the requested action. 
In 2008 the Commission demonstrated a more rigorous approach to suspending 
payments in cases where it had evidence of serious deficiencies in control systems. 
It adopted 10 payments suspension decisi ons in 2008. Reference is made to the 
final report on the Action Plan to streng then the Commission's supervisory role in 
structural actions (COM(2009) 42). 
68. Ensure that the simplification procedures contribute to a re duction in the error rate in 
the future.  (§ 106)  
Commission's response:  
The Commission is taking the requested action. It refers to its responses to 
paragraphs 38 and 95 of the resolution about the simplifications underway. 
The Commission is taking care to avoid any dilution in control standards as a 
result of the simplifications. For example, the compliance assessment procedure, 
which is an important safeguard that good control systems are in place before 
interim payments begin to be made, has not been changed. 
The Commission has issued multiple gu idance notes for the 2007-2013 period that 
facilitate the practical application of the rules for management and control. 
Further simplifications on the manageme nt and control of the EU funds are 
EN 43   EN underway. The Commission holds annual mee tings with national audit authorities 
on management and control issues and he ld seminars in 2008 and 2009 targeted to 
managing and certifying authorities. 
The Commission does not expect a signific ant decrease in the error rate until 
2007-13 programmes begin to account for th e bulk of expenditu re included in 
interim payments. The Commissi on is to carry out an audit of a sample of 2007-13 
operations in the second half of 2009 to prov ide a first estimate of the error level in 
the new programmes. 
69. Further clarify the difference of interp retation between the ECA and the Commission 
concerning rules relating to the eligibility of expenditure and calls for the interpretation of the rules as to the application of financial corrections to be harmonised.  (§ 108)  
Commission's response:
 
The Commission is taking  the requested action. 
It is using various means to narrow the di fferences of interpretation that arise in 
relation to the Court’s audit findings: The Commission and the Court hold “inter-
institutional colloquia” on a verage twice a year to discuss such questions. A joint 
working group prepares the discussions of interpretation issues. Another means of 
reducing differences of interpretation is the procedure of tripartite meetings 
between the Court, the Commission and th e Member State concerned before audit 
findings are reported in the Court’s a nnual report. The procedure was introduced 
for the first time for the 2007 DAS and has been widely welcomed. 
The different time perspectives adopted by the Court and the Commission in their 
audit work accounts for many of the diffe rences of assessment of the financial 
impact of errors. The Court adopts a stri ctly annual perspective; the Commission 
looks at the entire multi-annual control cycle up to closure. There are also 
differences with regard to public proc urement irregularities. The Commission 
applies a sliding scale of financial corrections depending on the seriousness of the 
infringement. The Court applies a 100% erro r rate for all serious infringements of 
the EU or national rules (for example failure  to put a contract out to competition), 
but treats minor breaches of the rule s as compliance errors which do not count 
towards the error rate. 
70. Make (Commission and ECA) a clear distinc tion between level of errors and fraud in 
future documents.  (§ 110)  
Commission's response:  
The Commission has taken the requested ac tion. Whenever fraud is confirmed, the 
Commission will disclose the fact in its pu blic statements on the case. OLAF also 
publishes statistics of cases of suspected fraud that Member States identify in their 
reports of irregularities, in its annual Article 280 report. 
EN 44   EN Internal policies 
71. The European Parliament deplores the fact that according to the ECA, while the 
Commission manages internal policy acti ons directly, the same problems from 
previous years are persisting (cost reimbur sement errors, complexity of the rules 
applied, and lack of an effective pe nalising mechanism), and calls on the 
Commission to continue its efforts to simp lify, and further clarify, the proportionality 
rules applicable to shared-cost programmes.  (§ 112)  
Commission's response:  
The Commission has committed itself to s eeking simplification where possible and 
will pursue this objective further. 
High error rates are due in a large part to complex eligibility rules. The 
Commission acknowledges that simplificatio n has an important role to play in 
reducing error rates, but poi nts out that a certain degree of complexity in rules and 
eligibility criteria is unavoidable as these are often fixe d in order to achieve desired 
policy objectives. 
The action already taken to address the risk  of error in cost statements from 
beneficiaries has contributed to a reduction in error rates of more than 50% in the 
space of three years. 
When errors are detected, the Commission will correct them rather than penalise 
the beneficiaries. Further, it is impleme nting a dissuasive mech anism to encourage 
avoidance of errors ("liquidated damages"). 
In addition, FP7 has already brought about a number of important simplifications. 
The Commission has implemented measures to  reinforce the effe ctiveness of audit 
certificates by improving support to certifying entities, beneficiaries and 
operational services within the Commissi on, and for FP7 two further measures 
were introduced: 
(1) audit certification based on "agreed  upon procedures" which consist of a 
compulsory set of procedures to be used  b y  c e r t i f y i n g  a u d itors; and (2) optional 
cost calculation methodology certifica tion for beneficiaries with multiple 
participations in order to  prevent common methodological errors. These measures 
are expected to ensure, before payments ar e authorised, that beneficiaries' costing 
methodologies better comply with  the contractual provisions. 
The unique registration facility for parti cipants avoids repeated requests to 
beneficiaries and improves data quality and coherence in all grant management 
systems. The project reporting was streamlined, including reduced data 
requirements, simplified reporting gu ides and longer reporting periods. 
However, it should be noted th at the impact of simplification  will only be  visible in 
the medium-long term. Further improvem ents will be achieved by the gradual 
introduction of fully electronic exchange  systems for the whole chain of proposal 
EN 45   EN and grant management procedures in th e frame of the e-FP7 initiative (the 
Participant portal). 
72. The European Parliament calls on the Commission to continue to exploit the 
reimbursement possibilities offered by the 7th Framework Programme, in particular 
to analyse further the appropriateness of the rules of the programme on flat-rate 
payment procedures, and to inform the pa rliamentary committee responsible in the 
context of the mid-term review of its cont ribution to the simplification of the rules 
for beneficiaries and to the necessary improvements to the system.  (§ 116 )  
Commission's response:  
A first tangible step was taken on 4 J une 2007, when the Commission decided on 
lump sums for International Cooperation Partner Countries' beneficiaries. The 
Commission continues to work towards a simplification of the cost reimbursement 
system, gradually introducing the use of flat rates and lump-sums where 
appropriate (for example for subsistence an d accommodation costs). Defining flat 
rates and lump sums for major budget it ems like personnel costs is a very complex 
task because of the difficulty of having sufficiently reliable st atistical information 
to fix the level of the lump  sum of flat rates. Wider acceptance of flat rates and 
lump sums will have an impact on the risk  of error and therefore is relevant in 
fixing an appropriate tolerable rate of error for the research area. So the 
Commission has to move step by step, also taking account of the fact that 
beneficiaries do not consider flat rates and lump sums to be a simplification in all 
cases. Further steps will be taken after careful consideration of their likely 
consequences and with due regard to the principle of sound financial 
management. 
73. The European Parliament is concerned about 7th Framework Programme rules which 
deviate from the common nationally and in ternationally acknowledged and certified 
accounting and calculation methods and wh ich do not accept th e results of the 
national audit authorities c oncerning the nationally certifi ed average hourly rates per 
cost centre; regards the 7th Framework Progr amme rules as clearl y contradicting the 
modern accounting and calculation standard s of European industry in asking for 
individual costs of persons actively involved in a specific research programme; asks 
the Commission to start a procedure making 7th Framework Programme rules 
compatible with general business practices that allow for calculation and charging of 
average hourly rates per cost  centre and do not ask for in dividual costs of persons 
actively involved in a specific research programme.  (§ 117)  
Commission's response:  
The Commission very much welcomes the su pport of the European Parliament in 
its endeavours to efficiently implemen t the Framework Programme within the 
particular context of the modernisation of the research institutions´ administrative 
and management practices. However, the Commission cannot implement the 
specific request for the following reasons: 
The Rules for Participation for FP7 (Art. 31) provide that av erage costs can be 
charged as long as they do not deviate "significantly" from actual costs. However, 
the Rules do not define "significantly" in terms of the permissible deviation which, 
EN 46   EN in view of the 2% materiality threshold applied by the Court of Auditors, offers 
little flexibility in practi ce. The Commission has stipulated (in the model grant 
agreement) that beneficiaries may claim average costs where their cost calculation 
methodologies have been approved ex an te by the Commission. The Commission 
decided in June 2009 to work on the basis  of deviation of max. 5% for cost 
methodologies. 
The use of average costs needs to be reco nciled with the "non -profit rule" in the 
Financial Regulation. Implementing the sp ecific request would mean that the link 
between average and actual costs at benefi ciary level would be lost: such globally-
applied average rates would cause a considerab le risk of significant deviations on 
individual transactions and beneficiaries (especially those with few participations 
in FP7). 
Moreover, the types of system referred to in the request are applied only in some 
Member States: implementing this reques t would therefore require accepting all 
national systems (or developing them wher e these are not available) to ensure 
consistency of treatment. 
Finally this matter should cer tainly be revisited in light of the progress of the inter-
institutional discussions on the tolerable level of error in th e field of European 
research policy. 
74. As regards the certificates on the me thodology (CoM and CoMAv), the European 
Parliament is concerned at as yet unapproved ce rtificates and urge s the Commission 
to establish the necessary comprehensible criteria for approving certificates on the methodology for both personnel and indirect costs; believes that beneficiaries should 
be allowed to use average personnel cost s and to apply an established methodology 
for calculating the indirect cost ; calls for a timely start to  the process of approving (or 
rejecting) the certificates to make sure th at the funds earmarked for research can be 
used; asks the Commission to accept such  average hourly rates per cost centre 
without a certification as regards the me thodology at least if they are audited and 
certified by a national authority  (§ 118)  
Commission's response:
 
The Commission fully shares the concern expressed by the European Parliament. 
FP7 provides two types of cost methodology  certification: the mandatory certificate 
on the methodology on average personnel costs (CoMAv) and the certificate on the 
methodology for personnel and indirect co sts (CoM), optional for any beneficiary 
of multiple grants fulfilling the eligibil ity criteria set by the Commission. The 
certification of average personnel cost s was introduced to accommodate those 
participants who, as derogation to the gene ral rule of actual costs, use average 
costs for charging personnel. FP7 rules provide that averag e personnel costs may 
be used if they are consistent with th e management principles and accounting 
practices of the participant, do not differ si gnificantly from actual costs, are based 
on a methodology certified by an indepe ndent auditor and finally approved by the 
Commission. The meaning of "significant deviation" has not been defined by the 
legislator in the FP7 rules for participation. In this context the Commission has 
assessed several possibilities striving to balance the need for simplification while 
ensuring the legality and regularity of e xpenditure. It is to be noted that the 
EN 47   EN acceptance of average rate methodologies is based on the hypothesis that upward 
and downward deviations between actual an d average personnel costs within grant 
payment transactions towards a certified be neficiary should be set-off against each 
other over all its grants for the whole duration of the Framework Programme. The 
Commission will very shortly decide on a num ber of criteria that could at the same 
time provide a reasonable level  of assurance in terms of  the DAS and a substantial 
degree of simplification for the beneficiar ies. The Commission also considers that 
this matter will need to be revisited in the future with a view to further 
simplification. Finally, the Commission takes note of the request to accept average 
hourly rates per cost centre without a ce rtification on the me thodology. It cannot 
implement it, however, for the reasons already highlighted in the reply to 
paragraph 117 as such an acceptance would be in breach of the applicable 
regulatory provisions. 
75. The European Parliament recalls its request, with a view to simplifying the 
administrative procedures and grant applica tions, for one single contact point to be 
set up for beneficiaries with the compet ence to decide on issues regarding the 
research framework.  (§ 119)  
Commission's response:  
A single contact point for beneficiaries regarding the research framework related 
issues has been established. Since the start of the 7th Framework Programme, the 
Commission operates a central enquiry servi ce for all questions related to proposal 
submission and research grant management 
(http://ec.europa.eu/research/index.cfm?pg= enquiries), providing centralised and 
harmonised replies wherever possible, wh ile detailed issues related to the 
implementation of individual grants requir ing an analysis on a case-by-case basis 
stay under the responsibility of the rel evant authorising offi cer. These services 
complement the continued role of the National Contact Points in Member States 
and of Cordis. 
76. The European Parliament calls on the Commission, as a requirement for legal 
certainty, to refrain from re -calculating the financial stat ements of projects under the 
6th Framework Programme that it has alre ady approved and settled, by applying new 
interpretations to the eligibility criter ia for costs established in the General 
Conditions (Annex II) of the FP6 model contract.  (§ 120)  
Commission's response:  
The Commission has devised a control stra tegy aimed to ensure the legality and 
regularity of the 6th Framework Programme on a multiannual basis. It is based on 
the detection and correction of any errors which could not be identified before 
making the payment. This is achieved by ex-post auditing and thoroughly 
recovering any amount found to be overpaid to the audited beneficiaries, even for 
non-audited contracts. 
The re-calculation of the financial statemen ts of projects is a necessary condition 
to correct the detected systematic errors lik ely to affect non-audited contracts. The 
acceptance of this particular request would therefore mean that amounts 
receivable would not be recovered.  
EN 48   EN  
Refraining from re-calculating the financial statements affected by detected errors 
requires a clear commitment from the Eu ropean Parliament and the Council to 
take this political decision into acco unt in the framework of the discharge 
procedure, in particular with reference to  the opinion of the Court of Auditors, 
since it should be noted that this will potentially lead to increased residual rates of 
error. This should be taken into account  when a tolerable risk of error will be 
discussed. 
The split of responsibility between the Co mmission and the beneficiaries in this 
respect should be maintained. When the Commission proves the existence of an 
error and its systematic character, the be neficiary is responsible to quantify the 
financial consequence of those errors. In some specific cases (lack of reliable time 
recording system) the assessment of th e financial conseque nces of this non 
compliance of the contractor is particular ly difficult or time-consuming and may 
even require that in specific cases the non audited closed contracts be subject to 
further scrutiny. 
In order to avoid any misunderstanding, the Commission wishes to clarify that 
these corrections do not result from the application of new interpretations, but 
from the audit of cost statements subm itted by beneficiaries within the same 
Framework Programme. In accordance with the provisions of the model grant 
agreement, the Commission may carry out audits up to five years after the final 
payment of a project and make the relevant financial adjustments.  
 
77. The European Parliament notes that the two-stage procedure for the 7th Framework 
Programme is being applied in certain areas; calls on the Commission to consult with 
research organisations on the appropriaten ess of extending this experiment to other 
types of project where this would result in considerable reductions in the preparation 
costs of initial project applications  (§ 121)  
Commission's response:  
A two-stage procedure is indeed used in some FP7 calls for proposals, particularly 
where a high subscription rate is expect ed, including in calls which are more 
bottom-up in nature. While this works we ll in many areas, it is not a panacea, 
since experience shows that often the effo rts required to prepare a good first-stage 
proposal (including formulation of idea, gathering of a consor tium etc.) represent 
a substantial part of the effort to write a full proposal. Consultations during FP6 
led to an estimate that this part is aro und 80%. Informed observers and applicants, 
when consulted during FP7, have remained ambivalent about the possible benefits 
of two-stage procedures. Moreover, it should  be recalled that two-stage procedures 
prolong the "time-to-grant". The Commission  will continue to monitor this issue 
in its informal contacts with stakehol der groups, but does not consider a new 
specific consultation to be necessary at this stage. 
78. The European Parliament points out that, in the research field, the Commission has 
increased the number of research bodies , cooperation models and management 
EN 49   EN mechanisms; recalls that this  is due to the considerab le increase in funds made 
available under the financial framew ork 2007-2013 for research and innovation; 
invites the ECA to assess possible problems of transparency vis-à-vis the budgetary 
authority and the differing way of dealin g with beneficiaries under those models; 
calls for the Director-General to give over a chapter of his AAR to each such body, model and mechanism in order to provide information on the use of funds and the 
outcomes sought with these public -private cooperation models.  (§ 122)  
Commission's response:
 
The principal means to achieve transparen cy towards the Budgetary Authority is 
the discharge by the European Parliament  for different management models. The 
Directors of executive agencies receive discharge from the European Parliament 
on their implementation of administrative costs; operational costs are part of the 
Commission's discharge. The Executive Directors of the Joint Undertakings 
receive discharge from the European Par liament on the imple mentation of the 
entire budget of the Joint Undertaking. In  addition, the agencies' Annual Activity 
Reports (AARs) are annexed to the AARs  of the parent DGs. Within this 
framework, the Commission is actively laying the ground  to allow these bodies to 
operate autonomously. 
In particular, in order to be  able to report in the AAR: 
The agencies and Joint Undertakings must implement in practice the governance 
and accountability model outlined in the in ternal control framew ork applicable in 
the Research DGs. For Art. 169 bodies, the Financial Regulation lists the 
conditions, which are largely equivalent. 
The legal instruments that bind the body with the Commission (Delegation Act and 
Memorandum of Understanding for the agencies and the contracts with the Joint 
Undertakings and Art. 169 bodies) require reporting on the operation of the 
internal control systems in line with, and using the same indicators as, those 
agreed by the Research DGs. In addition, th e DGs have the right to request further 
information if and when needed. 
Furthermore, as before, the Directorates must report on the achievement of their 
political objectives in part 1 of the AAR,  including the activities of these bodies 
where applicable. 
79. The European Parliament calls on the Co mmission to offer further assistance to 
applicants in the context of multiannual programmes, especially by providing specific training for applicants and user-friendly guidelines; 
 Welcomes the efforts to target calls for te nders more effectively and to provide more 
assistance to applicants, esp ecially in public health progr ammes, in order to prevent 
the submission of project applications whic h are clearly not eligible for funding or 
are of poor quality, but notes  that further work is needed in order to obtain a 
satisfactory situation.  (§§ 127-128)  
EN 50   EN Commission's response:  
The Commission has taken the requested actio n. In the area of public health, in 
2008 and 2009, EAHC introduced national info days in addition to the European 
info day in Luxembourg, to allow more par ticipants to have first hand information 
on the annual call for proposals. In 2008, 12 national info days took place. In 2009 
the number was 16, and a specific effort wa s made to reduce the high number of 
ineligible or low quality proposals in previous calls. 
A "Guide for applicants" is produced yea rly and is accessible on-line to help 
applicants to submit proposals that  meet the required standards. 
A special training on the application process was provided to the national focal 
points of the health programme in 2008, in order to enable them to provide a better 
service for potential applicants at national level, according to a 'train the trainers' 
approach. 
Applicants receive routinely a copy of the independent evaluation of their proposal, 
which sets out in detail the weaknesses of  proposals. This allo ws applicants to 
submit better proposals in the next round. 
In 2009, the application process was made e ven more user friendly for applicants, 
by improving the application form based on  the results of a satisfaction survey 
among persons submitting proposals in 2008. This resulted in fewer questions to 
the help desk in 2009, despite a higher number of proposals. The satisfaction 
survey launched in 2008 showed that 91 % of the applicants in the call for 
proposals considered the documentation prod uced useful to very useful and 92% 
judged the support received from the help desk good to very good. 
In September 2009, EAHC will support a specific training seminar for potential 
beneficiaries hosted by the Spanish nationa l focal point, with the aim to improve 
the quality of proposals. 
In the environment field, DG ENV started in 2008 to organize workshops in all 
Member States to provid e information to potential applicants about LIFE+. For 
what concerns guidelines, a full set of  guidelines for applicants and for the 
evaluators of proposals are published each year, at the same time as the call for 
proposals. The feedback received from app licants show that th ese guidelines are 
user-friendly and very helpful in the preparation of proposals. From one year to 
the next the guidelines are fine-tuned to address specific issues raised by 
applicants or potential applicants. 
80. The European Parliament points out that part of the Health Action Programme is 
implemented by the Executive Agency for Health and Consumers; reminds the 
Commission in this context to use program me funds of an operational nature very 
cost-effectively as they are also  used for administrative tasks.  (§ 129)  
Commission's response:  
The implementation of the Health Action Programme by the Executive Agency for 
Health and Consumer Protection is performe d on the basis of the delegation of the 
EN 51   EN Commission and under its control and res ponsibility. The Commis sion ensures the 
setting up within the Agency of grant aw ard and procurement procedures, internal 
control and accountancy systems, which, at the same time, comply with sound 
financial management and the general Fina ncial regulation and ensure the use of 
the Public Health Programme fund s in a cost effective manner. 
81. The European Parliament points out that compliance with the administrative and 
financial provisions of Regul ation (EC, Euratom) No 1605/2002 should not lead to 
unnecessary delays in awarding grants or selecting projects to be financed and calls 
on the Commission to continue its efforts to improve administrative procedures 
which have an impact on the implementation of commitment and payment appropriations.  (§ 130)  
Commission's response:
 
The Commission has taken the requested actio n. A recent report from the Court of 
Auditors clearly demonstrates that, since the Public Health Programme has been 
put in place, significant improvements have been made in the reduction of the time 
to contract. 
Since 2008, habilitation is given from the Commission to the Director General of 
DG SANCO in order to simplify the admin istrative procedures  and significantly 
reduce the delays for awarding grants. 
DG ENV has also implemented several measures to accelerate commitments and 
payments, in respect of the financial regulation. 
DG ENV has in particular taken steps to  adopt the annual financing decision 
foreseen by article 75 of the Financia l Regulation as soon as possible (for 
example, in October 2008 for the 2009 budg etary year) in order to be able to 
launch the award procedures as soon as possible. 
As regards the LIFE+ call for proposals for action grants, the Commission is 
aware of the length of procedures, but considers that the margin available to 
shorten the procedures is li mited as the length of selection procedures is largely 
conditioned by the comitology requirements of the Regulation. 
As regards payments, DG ENV revised its financial circuits for pre-financing 
payments in 2008. This allowed a reductio n from 28 to 18 days for payment of 
these pre-financings. 
Delays in payments for LIFE+ project grants are largely due to incomplete 
reporting by many grant beneficiaries, which leads to sometimes lengthy 
exchanges of correspondence concerning th e eligibility of certain costs declared. 
The procedures for assessment of payment requests have been reviewed with a 
view to reducing the payment delays whils t maintaining a high level of control. 
82. The European Parliament calls on Member States to further improve their internal 
control systems to prevent the placing of unauthorised goods  on the Community 
market; calls furthermore on the Commi ssion to follow up on any shortcomings 
detected in the area of c onsumer protection in 2007.  (§ 132)  
EN 52   EN Commission's response:  
The Commission works closely with Member States to enhance market 
surveillance and consumer protection. Fo r details of its work in the area of 
consumer safety, the Parliament is re ferred to the 2008 Annual Report on the 
operation of the Rapid Alert System for non-food consumer products. In addition, 
the Commission intends to issue a Communi cation on enforcement in the area of 
Consumer Policy later in 2009. 
83. The European Parliament notes that th e implementation rate of 77% for budget line 
17 02 02 (consumer protection programme) is lower than in previous years; notes 
further that, according to the Commission, the reasons for this are the transfer of non-
differentiated appropriations from the Execu tive Agency for Health and Consumers 
back to the consumer protection program me, and some late commitments made 
during the year 2007, with the result that payments planned for 2007 were not made; 
calls therefore on the Commission to im prove budget planning in this area.  (§ 136)  
Commission's response:  
The Commission has implemented 96,35 % of payment credits from budget line 17 
02 02 in 2008, which confirms the exceptional situation in 2007. 
84. The European Parliament notes with satisfac tion that, as a result of reactions to the 
Court of Auditors' Special Report No 6/2005 on the trans-European network for 
transport , the maximum rate of financial aid for cross-border projects has been 
increased to 30% and the minimum f unding threshold to EUR 1 500 000; notes 
further that the evaluation procedure for th e selection of projec ts has been improved 
and monitoring has been enhanced, but deplor es at the same time the fact that the 
structure for the description of works ha s not been harmonised and technical and 
financial monitoring has not been standardised.  (§ 140)  
Commission's response:  
Several new requirements an d modifications to the exis ting system have in fact 
been put in place in order to standardise and improve the technical and financial 
monitoring of projects. The TEN-T Ex ecutive Agency and the Commission worked 
together to prepare a new model financ ial Decision for the programming period 
2007-2013. Particular attention was paid to an  improvement of the elements which 
allow technical and financial monitoring of the actions funded under the TEN-T 
programme. At the same time the definitio n of works and studies was also revised, 
taking into account the comments of th e Court of Auditors on this subject. 
85. The European Parliament notes the ECA' s finding that the approaches taken by the 
national authorities with a vi ew to obtaining a basis for the ex ante declaration of 
assurance differ and that the degree of disclo sure as to the proce dures carried out by 
those authorities varies greatly; calls on th e Commission to commence an exercise to 
harmonise those declarations  and to keep Parliament and the ECA informed about 
the exercise.  (§ 146)  
EN 53   EN Commission's response:  
The request has been implemented. Guide lines for the National Authorities have 
been issued already in 2007 and updated in March 2009. Copies of those 
Guidelines have been transmitted to the Eu ropean Parliament and to the European 
Court of Auditors. 
86. The European Parliament welcomes the fact  that the number of late payments in the 
area of education and culture  is decreasing, and expects the Commission to continue 
its efforts to further reduce them.  (§ 150)  
Commission's response:  
The requested action has been impl emented. During 2008, DG EAC has taken 
further measures to closely monitor th e development of payment delays. The 
monthly reporting to management has b een extended and includes both the 
average payment delays as well as an analysis of payments made within the 
different contractual time limi ts or exceeding those limits. 
The regular follow-up of payment delays has resulted in a clear reduction of the 
average payment time (an average in  2007 of 38,80 days for procurement and 
54,12 days for grants is down to a total average of 28,89 days in 2008). 
87. The European Parliament expresses its hope  that the control sy stem established by 
the Directorate General for Communica tion at the end of 2007 will make it 
unnecessary to enter a reserv ation regarding its budget mana gement in the future, as 
was the case for the financial year 2007.  (§ 151)  
Commission's response:  
The Commission has taken the action required.  In the light of the new control 
system, which has highlighted a number of  errors in budgetary management for 
2008, DG COMM has entered a reservation in respect of that year.  The action plan 
introduced is designed to improve budgetary  management and, if that is found to 
be the case, avoid the need to re new this reservation in future. 
88. The European Parliament requests further information from the Commission 
concerning the creation of admi nistrative structures in Member States to assist in 
town-twinning activities, especially as regard s the need for such structures, the costs 
involved and their purpose.  (§ 152)  
Commission's response:  
As of 2008, Europe for Citi zens Contact points began to  be established in the 
countries participating in the Europe for Citizens Programme. They are intended 
to be decentralised communication co-coordinating bodies providing information 
on the Programme to potential benefici aries and the general public. They are 
expected to play an intermediary role be tween the wide diversity of stakeholders of 
the Programme and the European Commission as well as to actively mobilize all 
relevant national networks. An overview  of Contact Points is available at 
http://ec.europa.eu/ci tizenship/how-to-participate/doc714_en.htm. 
EN 54   EN The initiative to create the Contact Points  came through the Europe for Citizens 
Programme Committee which comprises go vernment representatives from the 27 
Member States and other countries participating in the Programme. The 
Committee identified a lack of awareness of the Programme, especially amongst 
civil society. It was decided that decentr alized co-coordinating bodies offering close 
proximity to citizens and stakeholders and the ability to communicate in the home 
language were the most appropriate way to  respond to this need and facilitate 
information dissemination at national, regi onal and local level. The Contact Points 
also have a key role to play in providin g guidance and assistance to broaden access 
to the Programme to the many small organisations active in civil society who have 
little or no experience of European  co-funding application procedures. 
The co-coordinating bodies were designat ed by the Member States and are now 
operating in 23 countries. In some cases,  the bodies work alongside the Cultural 
Contact Points supported within the EU Culture Programme. 17 of the Europe for 
Citizens Contact points have applied for, an d been awarded, co-financing to help 
cover the operating costs of the new info rmation and liaison activities to be 
undertaken. A total of just over 417.000 Euro of Community co-financing was 
provided for this purpose in 2008. 
The Europe for Citizens Contact point s, which cover the whole Programme, 
complement the information and awaren ess-raising efforts of the Council of 
European Municipalities and Regions (CEMR) and its national member 
associations concerning the Town-Twi nning possibilities supported by the 
Programme. 
89. The European Parliament requests the Co mmission to examine ways of making the 
Youth Programme more capable of reach ing new groups of young people, in 
particular those from disa dvantaged backgroun ds; to this end, suggests that youth 
organisations, including the European Youth Forum, increase efforts to target such 
groups, to improve reporting standards a nd funding criteria and to disseminate 
information on the programme itself more widely amongst young people  (§ 153)  
Commission's response:  
The Commission fully shares the objective to reinforce the participation of 
disadvantaged young people in the Youth pr ogramme. For this reason an inclusion 
strategy has been developed in 2007, aiming  both at increasing participation in the 
programme of youth with disadvantaged bac kgrounds and inclusion of this topic in 
the projects supported by the programme. In  this framework, an explicit selection 
criterion has been introduced in the us er guide in 2008, and in 2009 particular 
attention shall be paid to disabled yo ung people and young people with a Roma 
background. The Commission has also revised reporting in order to allow a proper 
monitoring of the participation of disadvantaged young people.  
Provisional results of the Youth progr amme for 2008 indica te that about one 
quarter of the participants of the progra mme can be considered as having fewer 
opportunities and about 40% of all projects aim, among other things, at promoting 
the inclusion of disadvantaged young people. 
EN 55   EN 90. The European Parliament calls on the Dire ctorate-General for Freedom, Security and 
Justice to try to maximise the level of implementation of commitment and payment 
appropriations in 2008.  (§ 154)  
Commission's response:  
The Commission closely monitors the bu dget implementation and works for the 
maximisation of the implementation rate in the area of Freedom Security and 
Justice, in the respect of sound financ ial management of budget appropriations. At 
the end of 2008, including the transactions in the 'carry-over', the implementation 
rate for commitments was 98% and 88% for payments. 
91. The European Parliament reiterates its ca ll to the Commission fo r gender equality to 
be taken into due consideration as an  ongoing priority obj ective during budgetary 
planning, in accordance with the principl e of gender budgeting, as it requested in its 
resolution of 3 July 2003 on gender budgeting, building public budgets from a 
gender perspective, and criticises the delay in completing the Commission's feasibility study on the topic.  (§§ 157-158)  
Commission's response:
 
The Commission has taken the requested action. 
• The study on gender budgeting was launched in 2007 in order to further explore 
the feasibility of and options for introduci ng elements of gender budgeting in the 
budgetary process. The study was finalised in June 2008 and was transmitted to 
the European Parliament  (FEMM) in July 2008. 
• The study focused on experience of ge nder budgeting initiatives in relevant 
countries. Gender budgeting raises some conceptual and methodological 
challenges: 
Firstly, to do a credible and comprehensive gender budget analysis is complex and 
it can only be carried out gradually. Fo r example, gender budgeting requires 
gender specific data and few budgetary  figures are broken down by gender. 
Secondly, in a gender analysis of expenditu re it is important to make a distinction 
between the initial effect of spending and the long term impact, since there is not 
necessarily an obvious correlation between  the two. To determine the long term 
impact of an activity is more  relevant and challenging. 
Thirdly, whereas no Member State of the EU has comprehensively implemented 
gender budgeting in accordance with the EP's definition, some gender budgeting 
initiatives exist. These initiatives take diff erent forms in terms of both strategy and 
implementation, as well as the context in which the gender budgeting initiatives 
are carried out. Moreover, th e EU budget exhibits certain  differences with national 
budgets (no direct taxes, no social security system etc.), which influence the 
manner in which gender budgeting could pos sibly be applied at the EU level. 
• The Commission has examined the conc lusions which can be drawn from the 
study. One of the options put forward by the study is to consider the gender 
dimension in the impact assessments.  Impact Assessment (or the ex-ante 
EN 56   EN evaluation) of new proposals is a key mo ment to consider the implication of 
policies on women and men. The Commission's new impact assessment guidelines 
(2009) provide ways to ensure that impac ts on women and men are studied when 
designing new policies and programmes and that their effects on women and men 
are properly evaluated. A toolkit on assessme nt of social impacts (including impact 
on gender) has been developed. 
• Another option is to improve the reportin g to the Budgetary Authority on gender 
equality policies. Consequently, a new inst ruction for the Activity Statements for 
Preliminary Draft Budget 2010 requires, wher e appropriate, that gender aspects be 
considered. 
EN 57   EN External actions 
92. The European Parliament notes that extern al aid was virtually unaffected by the most 
recent revision of Regulation (EC, Eurato m) No 1605/2002, and calls for a revision 
of Title IV, 'External action', of Regulation (EC, Euratom) No 1605/2002 so as to bring it more closely into line with the sp ecial conditions relating to contracts and 
grants in this area.  (§ 162)  
Commission's response:
 
Title IV of the Part 2 of the Financial Re gulation, like all other provisions of the 
Financial Regulation, will be examined as  part of the three- yearly review in 2010.   
On the basis of experience and wide consultation within its services, the 
Commission will make the relevant pr oposals in order to promote further 
simplification of the financial management system for external aid. Provisions 
concerning grants and contracts in the ar ea of external aid will naturally be part 
of this exercise. 
93. The European Parliament calls on th e Commission to ensure full financial 
transparency in external aid, in accordance with Articles 53 to 56 of Regulation (EC, 
Euratom) No 1605/2002, and to honour its undertaking to Parliament that any international organisation receiving Community funds w ill be required to submit the 
results of all internal and external audits of the use of those Community funds to the 
ECA and to the Commission's Internal Audito r; calls also for OLAF to be given 
access to data where fraud is suspected.  (§164)  
Commission's response:
 
As explained by the Commission during the 2009 budgetary procedure, the 
Commission cannot accept this request because it is not in conformity with the 
Financial Regulation. The Financial Regulation specifies the conditions under 
which the Commission can entrust the management and implementation of 
projects to international organisations through joint management. The 
Commission must check that the key financial procedures (including internal 
control and external audit) of each international organisation comply with 
international standards, and the FR provides  for the internal organisation then to 
apply these procedures. Moreover, the terms of the standard contribution 
agreement (SCA) applicable to contracts si gned between the Co mmission and these 
organisations already provide for the Commission to rece ive a copy of the audited 
financial statements of the organisation as  well as for access to project documents 
to be given to the Court of Auditors and OLAF.  
For the UN, external audit reports issued by the UN Board of Auditors, which 
certify a given UN organisation's accounts for a given biennium, are public 
documents. Concerning internal audit re ports, practice varies between agencies; 
for the Commission's biggest partner, UNDP,  internal audit reports are internal 
documents, but the Commission's verifica tion teams may request a summary of 
such reports and, where confidentiality co nsiderations allow, the Commission has 
EN 58   EN received the information requested. OLAF  will (continue to) be given access to 
data where fraud is suspected. 
94. The European Parliament notes that, on the basis of a number of hypotheses ('best 
estimates'), the total cost of the checks carried out by the Directorate-General for Humanitarian Aid (DG ECHO) has been put at EUR 25 000 000 for the financial 
year 2007, this being equivale nt to 3.2% of the total humanitarian assistance budget 
for that year; deplores the lack of procedures for risk  management by DG ECHO and 
calls for such procedures systematically to be incorporated into the control arrangements; 
 Notes that, according to information fro m the Commission, that es timate covers only 
part of the costs relating to humanitari an operations funded by DG ECHO, because 
the cost of checks carried out by humanita rian organisations, which are included in 
the overall cost of the grant agreem ents, are also funded by DG ECHO.  (§§ 165-166)  
Commission's response:
 
The requested action linked to risk management is implemented. The risk 
management procedures and their link  with control arrangements are the 
following: Firstly, an annual risk analysis is carried out by th e management of DG 
ECHO. This analysis takes into acco unt DG ECHO controls set up and the 
mitigation measures to strengthen the latt er. Secondly a specific analysis of the 
risks is carried out before establishing th e ex-posts audits' yea rly planning. Lastly, 
the past 2007 IAC structure correspondi ng to a common IAC for both DG AIDCO 
and ECHO was split as from 1/1/2008 in tw o separate entities. The Internal Audit 
Capability Sector for DG ECHO became operatio nal in July. After a detailed risk 
analysis, a revised work plan was adopte d, taking into account the key risks 
identified by the DG and the work performe d by the Internal Audit Service of the 
Commission for the period 2007-2009. 
95. The European Parliament regrets that in Kenya the Commissi on disbursed budgetary 
support straight after the elections of 27 December 2007, thus giving the impression 
of taking sides in the debate on the leg itimacy of the election results; recalls its 
resolution of 17 January 2008 on Kenya, and looks to the Commission to take due 
account thereof.  (§ 169)  
Commission's response:  
In hindsight, the Commission also regrets that this budget support payment was 
made. Nevertheless, the Commission wishes to recall the course of the events in 
this specific case:  
A payment under the Poverty Reduction Budget Support programme (PRBSII) of € 
40.6 million was agreed by letter from the Commission to the Kenyan Minister of 
Finance of 28 November 2007. The release of this tranche was, amongst others, 
agreed on the basis of and approval by the IMF Board of Directors in November 
2007 of the completion of the third revi ew of the IMF PRGF programme. The 
Commission approved the release in November 2007 on the basis of: 
EN 59   EN - satisfactory implementation of the o verall macro-economic reform programme 
underlying the IMF PRGF agreement, 
- improvement in public financial man agement based on th e assessment of the 
implementation of the PFM action plan (on budget formulation, execution, 
reporting and control) reflected in the achievement of additional PEM-AAP 
(Public Expenditure Management Assessm ent and Action Plan) benchmarks, and 
on the basis of achievement of indicator targets in the health and education 
sectors. These targets are enshrined in  the PRBSII Financing Agreement, as 
signed on 30 November 2005. Payment on 28 December 2007 General elections 
consisting of Presidential, Parliamentary and local elections, were held on 27th of 
December in Kenya. In view of the on going election process the European 
Commission decided, in consultation with Member States, to schedule the payment 
after the elections. Following the contract stipulations the payment had to be made 
before the end of the year. It was theref ore decided to schedule the payment for 28 
December 2007. The EU Election Observatio n Mission observed the Presidential 
and Parliamentary elections. The Parl iamentary elections went well. The 
Presidential elections initially went well, but were marred by irregularities in the 
processing and tallying of vo tes. These irregularities on ly became apparent as from 
Friday night - Saturday 29 December, when the result aggregates of the last 49 
constituencies (out of 210) faced delays in reporting at the central level. The 
preliminary analysis of the EU EOM (tha t the General Elections had fallen short 
of key international standards), was reported on Monday, 1 January 2008. At this 
stage it was too late to block the payment. 
Since then, and based upon this experien ce, the Commission has put in place an 
enhanced approval process for budge t support payments scheduled during 
electoral periods in order to avoid similar situations. 
96. The European Parliament notes the Cour t's assessment that the supervisory and 
control systems for external relations, enlargement and hum anitarian aid are partially 
effective; accepts that many of the errors detected concern advance payments and are 
then rectified when final payments are ma de; nevertheless, invites the Commission to 
make the necessary improvements to its monitoring and verification procedures, 
especially at the level of implementing organisations, without  this leading to 
unnecessary administrative burdens for the fi nal beneficiaries; recognises at the same 
time the progress made by the Commission and the United Nations to date.  (§ 170)  
Commission's response:  
During recent years, measures to reinforce the controls at the level of 
implementing organisations were introduced by the Commission. The report from 
the Court of Auditors for 2007 reflects a number of improvements in the quality of 
such controls, leading to a reduc tion in the estimated error rate. 
These include in particular the new standard Terms of Reference for the different 
types of audits and the introduction of CRI S-Audit for their follow-up. Given their 
recent introduction the full be nefits of such measures were not fully apparent in 
2008, but the Commission expects they will become more evident in the future. 
Meanwhile the Commission continues its efforts to further improve its systems – in 
line with the Court's recommendations – an d plans to put in place complementary 
EN 60   EN measures, like the development of a specific tool to help implementing 
organisations better manage EC funds an d respect EC rules, thus reinforcing 
preventive measures. 
97. The European Parliament deplores the c ontinuing lack of tran sparency concerning 
the use of Community funds channelle d through United Nations organisations; 
supports the Commission's effort s to find a solution and to ensure that the Court of 
Auditors receives all requested information in a timely fashion; welcomes the increasing number of verification missions  performed by the Commission under the 
Financial and Administrative Framewor k Agreement between the European 
Community and the United Nations (FAFA agreement); expects these missions to 
further enhance the transparency and visibi lity of Community contributions to UN-
led activities.  (§ 171)  
Commission's response:
 
The Commission will continue to work clos ely with the UN to improve the conduct 
of verification missions and to enhan ce the transparency and visibility of 
Community contributions to the UN. In this regard, the 6th Annual FAFA 
Working Group meeting, which took place in April 2009, has agreed on terms of 
reference for verification missions - these TOR have already been successfully 
used on a trial basis for the past year.  The Commission will also continue, in 
accordance with Article 30.3 of the Fi nancial Regulation, to ensure that 
information on the beneficiaries of fund s is made available by the UN. This 
information will be published either by the UN through its local offices or on 
Delegation websites. The Commission will also publish consolidated information 
centrally. Updates to the European Par liament on the situ ation in Pakistan, 
Afghanistan, Georgia and Palestine are being sent regularly. The European 
Parliament is also provided with updated information on Multi-donor trust funds. 
The Commission considers that these actions will significantly contribute to 
further enhancing transparency . 
98. The European Parliament calls on the Comm ission to further improve, and to define 
more clearly, the conditions and performan ce indicators used for the disbursement of 
budgetary support to third countries, so as to provide for clear, unambiguous and measurable assessment criteria with a specific timetable, if applicable.  (§ 172)  
Commission's response:
 
The Commission has already establishe d a leading role among the donor 
community in the promotion of the use of  results and performance indicators. It 
continues to refine this approach and strive to ensure that criteria for 
disbursement are as clear and unambiguous  as possible, in line with existing 
guidelines. Recently developed guidelines on budget support - in crisis situations - 
will be submitted to Parliament in September 2009. 
99. The European Parliament notes the ECA’S Special Report No 5/2007 on the 
Commission's management of the CARDS programme ; emphasises the importance 
of reinforced strategic guidance from the Commission to ensure, in close cooperation 
and dialogue with Parliament, an appropr iate focus in sele cting key areas of 
intervention within the framework of the Instrument for Pre-accession Assistance; 
EN 61   EN calls on the Commission to devise a co mprehensive strategy to improve local 
ownership of the design and implementation of projects.  (§ 175)  
Commission's response:  
The Commission considers that the necessa ry actions, developed in the following 
paragraphs, have been taken to  implement the request. 
IPA strategy papers, notably the Multi–a nnual Indicative Planning Documents 
(MIPDs) allow for better match betw een resources, needs and absorption 
capacities of the beneficiaries. They ar e reviewed annually by the Commission in 
close cooperation with the beneficiary count ries in the light of the Enlargement 
Strategy papers. This mechanism a llows maintaining the balance between 
flexibility and sustainabili ty of the assistance. The cooperation and dialogue with 
European Parliament plays a very important  role in this process. The MIPDs are 
made available to the EP at the same time  as they are circulated to Member States 
within the comitology procedure.  
After the launch of IPA, the Commission launched new initiatives in the Western 
Balkans and Turkey such as the Infrastr ucture Projects Facility, the Energy 
Efficiency Facility, and the European F und for South East Europe for small 
businesses development. Education is a k ey priority for IPA (participation in 
Erasmus Mundus, Youth in Action, Tempus ). All these programmes are intended 
to catalyse and support regional coope ration initiatives such as the Regional 
School of Public Administration, Disaster  Risk Reduction, and cultural heritage 
rehabilitation. Special attention is given to development of civil society and civil 
society dialogue – the Commission, follo wing the request of the European 
Parliament, set up a new Financing Facili ty under IPA (Civil Society Facility) in 
2008 which is focused on capacity  building at local level.  
Over the last two years, the beneficiary countries have made progress towards 
assuming a greater ownership and respon sibility in the management of IPA 
programmes. In order to further advance the ownership, the Commission has 
catalysed additional mechanisms such as donor coordination. During the last years 
the Commission succeeded to promote broad consensus among donors of the 
Western Balkans and Turkey to foster th e "ownership" of the coordination of 
assistance by the beneficiary countries as a vital element to maximise the impact of 
aid, as well as to support the national authorities in their efforts to assume 
responsibility of donor coor dination. In this process th e MIPDs together with the 
National Strategies have been recognised as key donor coordination tools. 
100. The European Parliament expects to be ke pt regularly informed about steps taken by 
the Commission concerning the implementatio n of the significant pledges made in 
support of Georgia's post-conflict rec overy and future development at the 
international donors' conference he ld in Brussels on 22 October 2008.  (§ 176)  
Commission's response:  
The Commission Delegation in Georgia issu es a quarterly bulle tin to keep all 
stakeholders informed on the status of its activities. 
EN 62   EN The first issue was published in December 2008, while the second one was released 
in April 2009. The third state of play update report will be sub mitted to Parliament 
in September 2009. 
101. The European Parliament reiterates its re quest that the Commission regularly present 
to Parliament specific measures to further increase Union ownership of its external actions in their geographical contexts, in accordance with the principles of efficiency, accountability and visibility.  (§ 177)  
Commission's response:
 
The European Commission has put in place over the last few years several actions 
that will increase EU owne rship of external actions: 
- Expenditure verifications cover 98% of the amount of the grants. They are 
conducted according to Terms of Refe rence (ToR) which are mandatory since 
2006; 
- Since October 2007, standard ToR for audits (financial and systems) are 
mandatory for all kind of projects finan ced by the external headings of the Budget 
and managed by AIDCO; 
- The compliance analysis of UN organisa tions' procedures with internationally 
accepted standards in terms of audit, a ccounting internal control and procurement 
(the "four pillars" exercise) has been performed for 15 UN organisations; 
- Common ToR for verification missions are in the process of being agreed with 
the UN; 
- The Commission and the UN have signed  joint guidelines on reporting to 
improve the reporting practises; 
- A new version of the Practical Guide to  Contract procedures for EC external 
actions applicable as from 01/01/ 09 has been released in 12/2008; 
- The Commission has signed an action plan  on visibility in 2006, followed by the 
approval of joint guidelin es indicating how this should be implemented. The 
guidelines have been incorporated in the Communication and Visibility Manual 
for EU External Actions, adopted in April 2008. 
- The Trust Funds and Co-financing Fr amework Agreement between the EC and 
the World Bank Group was signed on 20 March 2009 by Presidents Barroso and 
Zoellick, including a new annex on visibility; 
- Efforts are exercised for the Commission to be part of the governing structures of 
trust funds and implementing organisations, al though the fact that the EC is not a 
member of the UN nor shareholder of  the WB makes this difficult. 
The choice of delivery cha nnels is made on a case  by case basis and the 
Commission cannot, and would not, always decide to undertake actions directly. 
This is the reason for the provision in the Financial Regulation for joint 
management and for more co-financing. 
EN 63   EN Non-governmental organisations (NGOs) 
102. The European Parliament takes note of th e role and growing number of NGOs in the 
administration of Community funds; calls  on the Commission to evaluate the 
effectiveness of operating grants for the NGOs' Brussels headquarters, and to apply 
strictly the principle of the degressivity of  operating grants laid down in the Financial 
Regulation.  (§ 178)  
Commission's response:  
In the framework of its external actions  the Commission provides funds for non-
state actors to implement d evelopment projects. The Comm ission conducts regular 
evaluations and audits on all operating grants, including those given to NGOs. 
When an operating grant is granted the Commission will continue to strictly apply 
the Financial Regulation including the principle of degressivity. Performance 
audits and/or evaluations will be launched for any ongoing Non State Actor 
operating grants. 
103. The European Parliament asks the Commission to compile, by the end of 2009, a 
comprehensive list of all NGOs which have received EU funds.  (§ 179)  
Commission's response:  
Since 2008, the Commission publishes the name  of all beneficiaries of external 
actions funding in compliance with Article  30.3 of the Financial Regulation. This 
list is comprehensive, and therefore not limited to "NGOs", a generic term for 
which there is no commonly agreed legal definition. For contractual aspects of 
funding, the Commission identifies the elig ibility of Non-State Actors (NSA) for 
EC funding on the basis of their own national legal framework. 
(http://ec.europa.eu/europeaid/work /funding/beneficiaries_en.htm) 
EN 64   EN Development 
104. The European Parliament notes that the ECA has conclude d once again that DG 
ECHO should enhance its audit strategy by en suring better coverage of operations at 
implementing organisation-level and, more sp ecifically, in the field for all types of 
partners (paragraph 8.33(f) of  the annual report for 2007); 
 Encourages the Commission, in connecti on with the objective it set in 2007 of 
having each project visited at least once a ye ar by an expert, except where this cannot 
be done on account of security conditions or access difficulties, to continue to check 
that humanitarian aid specialists are permanently  in the field in order to facilitate and 
maximise the impact of the humanitarian operations financed  by the Commission, in 
whatever country or region.  (§§ 180-181)  
Commission's response:  
The requested action has been taken. In  line with the requirements of the 
Financial Regulations, DG ECHO undertake s audits of partner organisations 
adhering to the FPA. The audit strategy is risk based which considers financial 
and operational strengths of the partners,  the results of past audits, assessments 
and feedback received from ECHO staff. The strategy also ensures that all 
partners are audited over a 2 to 3 years cycle depending on whether the partner 
has been classified as having 'A' or 'P' control mechanisms. The audits themselves 
follow a 2-track approach: audits are performed both at DG ECHO partners' 
headquarters for finalised projects (at least once every thr ee to four years and 
more frequently where higher risk is determined or the partner receives significant 
DG ECHO funds) and in the field for on going projects (determined by an 
assessment of risk and the past coverage of the partner concerned). Headquarters 
audits consist of two phases. Firstly, an analysis of partners’  internal control 
systems and in particular the financial syst ems put in place to record and account 
for expenditures incurred on DG ECHO funded projects. Secondly, a control of 
expenditures against supporting do cuments for a sample of contracts. The level of 
transactions controlled is based on the results of the assessment of the internal 
control system. The results of the audits are used for the periodic assessments of 
the partners and for ensuring the eligibil ity of the funds claimed. The later may 
also lead to a recovery of f unds due to the Commission. 
The number of field audits had already b een increased in 2007 fr om 20 in 2006 to 
37 in 2007. For 2008, 47 field audits were initiated and 31 reports finalised. In 
2009, 40 to 45 field audits are planned.  
In addition to these financial audits which are carried out by external auditors, the 
monitoring of projects is also undertaken through DG ECHO which supervises 
projects and draw up regular reports (notably through a wo rldwide network of 
around 100 field experts continuously working for DG ECHO. These 
Humanitarian Aid specialists are permanentl y on the ground in order to facilitate 
and maximise the benefits of the hum anitarian operations financed by the 
Commission).  
EN 65   EN Moreover, since 2007, each project is supposed to be visited at least once during its 
lifetime. In 2007 and 2008, 90% of projects we re directly monitored in the field, the 
remaining 10% being projects where access, security and nature of project did not 
permit direct monitoring. 
Therefore, audits have to be appreciat ed in the context of DG ECHO's overall 
control strategy which also includes th e follow-up carried out by its headquarter 
staff and the analysis of the informatio n provided by partners in their various 
reports. Indeed, the information which result s from such controls is used by the 
external auditors when audits are ca rried out at partners' headquarters. 
105. The European Parliament considers that, in connection with project implementation, 
the Commission should ensure that the reporting requirements agreed with the United Nations in April 2007 are strictly applied and that financial reports are 
produced in accordance with those requirements.  (§ 182)  
Commission's response:
 
The Commission attaches great importanc e to ensuring that provisions on 
reporting are fully respected, especially in terms of content and deadlines. The 
entry into force of reporting guidelines in 2007 has been very helpful in clarifying 
the responsibilities of our partners. Reporting has subsequently been addressed in 
the Joint Reference Group established to review implementation questions with the 
UN. In addition, the Frequently Asked Questions published on the EuropeAid 
internet site at the begi nning of 2009 address reporting matters and provide further 
assistance to staff both from the Commissi on and from international organisations 
on the interpretation of certain reporting provisions. With regard to financial 
reporting, international organisations are no t obliged to use a standard reporting 
format; however they are obliged to report in a way that enables the Commission to 
compare planned expenditure with  that effectively realised. 
106. The European Parliament considers that  thought should be given to clarifying 
funding structures (European Developm ent Fund (EDF), Commission, European 
Investment Bank, etc.) in the development and external actions fields, with a view to 
giving greater visibility to Community ac tion and ensuring better auditing of the 
funds committed; calls for a study to be carri ed out into the incorporation of the EDF 
into the Community budget, in preparation for a political debate on this subject. 
 It calls for the ending of the previous system of consecutive EDFs by means of the 
full consolidation of the financing of EU/A CP cooperation in the EU budget in order 
to ensure parliamentary oversight of th e allocation of res ources under the EDFs; 
 Welcomes the Commission engagement to  "raise again its proposal to fully 
incorporate the EDF into the budget dur ing discussions on the next financial 
framework" [Note: (SEC( 2008)2579) Commission Staff Working Document. Annex 
to the report from the Commission to the European Parliament on the follow-up to 2006 Discharge procedure, p. 86.]; invites the Commission to keep its Committee on 
Budgetary Control fully informed as rega rds the preparation of  this initiative; 
 Reaffirms its support for the incorporation of the EDF into the general budget of the 
European Union, which it considers w ould make it possible to enhance the 
EN 66   EN coherence, transparency and effectiveness of  the EDF and to strengthen its oversight 
system.  (§ 185 + EDF §§ 41, 77 and 78)  
Commission's response:  
The Commission agrees with the European Parliament on the appropriateness of 
consolidating the financing of EU/ACP cooperation into the Community budget, 
which would ensure parliamentary oversigh t of the allocation of resources under 
the EDF and would contribute to aid eff ectiveness through further harmonisation 
of aid implementation.  
The Commission expects to resubmit the proposal for post 10th EDF budgetisation 
in the framework of the performance review  of the 10th EDF, foreseen by the end 
of 2010 (in accordance with the 10th EDF In ternal Agreement art. 1.10). It would 
allow to bring the proposal in line with the next fina ncial framework after 2013. It 
would also follow the budget review for whic h the EU's role in the globalised world 
will be a central issue, including ques tions on more effective delivery of 
development aid and thus also in cluding the future of the EDF. 
The Commission will keep the European Parliament informed as regards the 
preparation of this initiative. 
107. The European Parliament draws attenti on to the Commission's commitment to take 
steps to ensure that by 2009 a benchmark of  20% of its allocated assistance [under 
the Development Cooperation Instrument (D CI)] is devoted to basic and secondary 
education and basic health; calls on the Commission to provide detailed information on how this benchmark will be met through projects, programmes and budget support; calls for greater consistency be tween the Thematic, Country and Regional 
Strategy Papers in the areas of health a nd education, in partic ular when aid is 
provided via budget support; calls for reporting  against the same benchmark to be 
provided for the EDFs; calls on the Commissi on to prioritise s upport to health 
systems and identify the most appropriat e aid delivery instruments for this area. 
 Stresses that priority must be given to th e enrolment in schools of children, including 
disabled children, from hard-to-reach groups in countries with critical MDG 
indicators.  (§§ 186-187 + EDF §§ 8-9)  
Commission's response:
 
The Commission reaffirms its commitment in the limits of th e respect of the 
ownership and aid effectiven ess principles according to which it is up to the 
beneficiary countries to identify their prio rity sectors and take the lead of the donor 
coordination. The Commission’s basic development approach focuses on poverty 
alleviation and, within this context, on improvements within the social sectors. 
Thus, the Commission concentrates on achi eving development results as measured 
by performance indicators. The Commission  will continue to promote the use of 
outcome indicators, not only in Performa nce Assessment Frameworks, but also in 
sector reviews thereby significantly contri buting to sector dialogue and to progress 
towards the MDGs. The Commission is comm itted to ensure th at the articulation 
between general budget support, sector budget support and sector programmes is 
clarified in order to ensure better sy nergies. In addition, the Commission is 
EN 67   EN improving the predictability of its Gene ral Budget Support instrument through the 
provision of "MDG Contracts" in performing partner countries within the 
framework of the 10the EDF. The Commis sion continues to be committed to 
supporting the achievement of the education and gender MDGs as well as 
Education For All goals, through use of a wide selection of the instruments 
available: the MDG-Contract, budget suppor t, sector support, specific projects 
where appropriate, and through support to the Education For All Fast Track 
Initiative. On an international policy level the Commission has repeatedly 
reiterated this commitment with specifi c statements drawing attention to the 
necessity to ensure inclusive education if  we are to achieve the MDGs. The prime 
responsibility for reaching all children however, remains with developing countries 
themselves. 
Most of the hard to reach children are in the so called 'fragile states', where the 
Commission intends to support education service delivery and capacity 
development; the EC contribution will be channelled through the 'education 
transition fund', under the umbrella of the Education For All Fast Track 
Initiative, financed under the DCI Inves ting in People programme. A statistical 
update is to be submitted to Parlia ment in September 2009 regarding 2008 
performance and 2009 projections on he alth and education interventions. 
108. The European Parliament urges the Comm ission to prioritise support for partner 
countries in developing parliamentary contro l and audit capac ities, in particular when 
aid is provided via budget support, and inv ites the Commission to report regularly on 
the progress achieved. 
 Is of the view that the involvement of national parliaments, ci vil society and local 
authorities in partner countri es is indispensible for achie ving genuine ownership of 
the process; urges the Comm ission to make every effort  to improve dialogue with 
these bodies at all the different stages of the programming process.  (§ 188 + EDF §§ 
55-56)  
Commission's response:  
In line with its policy to foster Count ry Ownership, the Commission encourages 
and supports efforts of partner countries  to develop parliamentary control and 
audit capacities. Thus, the Commission ha s been and is supporting many capacity 
building initiatives in this area and will re port on this within its annual reports on 
external assistance. A study on the support to parliaments in ex ternal development 
and cooperation programmes (inc luding statistics per region on funding in support 
of parliaments) will be submitte d to Parliament in November. 
109. The European Parliament points out that  due attention must be paid to the 
sustainability of the Commission's interventi ons, including the formulation of a clear 
exit strategy which does not compromise re sults and monitoring of implementation; 
considers that enhanced evaluation of result s represents a major factor in ensuring 
the democratic legitimacy of Union development cooperation.  (§ 189 + EDF § 5)  
EN 68   EN Commission's response:  
The European Consensus states that th e European Communities will consistently 
use an approach based on results and performance indicators. The quality of 
projects funded by the European Communities is assessed on the basis of 
relevance, feasibility and effectiveness.  Corresponding indicators are identified, 
monitored and referred to in evaluation. The evaluations realised by EuropeAid 
mainly consist of thematic, sectoral an d geographical as well as evaluations of 
regulations and instruments, whose results  are integrated in the decision-making 
process and policy/programme design on  the basis of different feed-back 
mechanisms. At the level of projects or programmes, the results-oriented 
monitoring system provides the Commis sion with a rapid appreciation of 
performance. 
110. The European Parliament welcomes the adoption in 2007 of the Union Code of 
Conduct on Complementarity and Division of Labour in Development Policy, which is geared towards enhancing cooperation and coordination betw een the Commission 
and the Member States; calls on the Commi ssion to redouble its efforts to ensure 
genuine implementation of the Code of C onduct, including by addressing persisting 
problems in the best interest s of the partner countries.  (§ 190)  
Commission's response:
 
Since May 2007 the Commission has been wo rking on the implementation of the 
EU Code of Conduct on complementarity an d division of labour in various ways.  
Starting with the dissemination of the EU  Code of Conduct in June 2007 with a 
note signed by DG DEV and 27 DGs of the Member States (MS), followed in July 
2007 by a joint note from Commissioners Mi chel and Ferrero-Wa ldner, asking to 
take concrete steps towards its implementation, and with continuous staff 
awareness raising through trainings, seminars and specific support to EC 
Delegations. 
The action continued with the commissionin g by the EC of various studies (EU 
Donor Atlas (2008), Compendium on divi sion of labour (2007), study on co-
financing (2007)) on current practices. And, as stated in the Council Conclusions 
of 27 May 2008, the Fast Tracking Initiative for division of labour was launched: 
In a letter addressed to 27 EU Development  Ministers, Commissioner L. Michel 
suggested adopting a pro-active approach by applying two of the guiding principles 
of the Code of Conduct: delegated cooperation and establishing a lead donorship 
arrangement for the coordination of all don ors in a given sector. This combines 
with action by EC and MS to facilitate th e division of labour process in partner 
countries. The process is further supporte d by an EU Toolkit with practical 
information on in-country division of l abour processes, writte n by the EC together 
with the MS, and distributed to MS and EC Delegations. 
Furthermore, at the international policy leve l, division of labour was one of the EU 
priorities in the EU common position fo r the EU participation at the IIIrd High 
Level Forum in Accra in September 2008. Since then the implementation of 
division of labour is one of the priori ty actions in the EC internal operational 
action plan for follow up of Accra. Tec hnical seminars were organised by the 
EN 69   EN Commission with the Member States to prepare for Accra, and subsequently to 
work on the follow up. Aid effectiveness in cluding division of labour is a recurring 
subject in EU-DGs meetin gs and the EDF Committee. 
And finally, at the operational level EC Delegations received guidelines on the 
practical application of delegated coope ration. Concerning EDF Programming the 
Guidelines for 10th EDF annual operational reviews 2007 and 2008 ask 
specifically for progress on division of labour. The implementation of delegated 
cooperation is already progressing, with so me agreements signed, and many others 
under preparation. To date, there are currently about 60 agreements in pipeline: 
36 delegation agreements amounting to some €213 million and 14 transfer 
agreements amounting to some €113 million.  This process should considerably 
reduce transaction and coordination cost s through large size and multi-donor 
arrangements. EuropeAid is currently in the process to develop Action Plans for 
six countries (Ethiopia, Mozambique, Tanzania, Bangladesh, Nicaragua and 
Vietnam) where the EC is leading the Fa st Tracking Division of Labour. The 
challenge is to make this operational and to produce concrete and measurable 
results before the next HLF IV in 2011. The Mid Term Review of country and 
thematic programmes, which started in 2009 with the revi ew of the DCI and ENPI 
and will continue into 2010 with that of  the EDF, is a unique opportunity to 
deepen the joint programming process. Therefore EC Delegations are encouraged 
to enhance the involvement of Member Stat es, in order to achieve further division 
of labour through concentration and/or delegated cooperation. 
111. The European Parliament takes the view that the consultation of civil society and 
local authorities prior to  drawing up Country Strate gy Papers (CSPs) under the 
Development Cooperation Instrument was not sufficient to satisfy the legal 
obligation established under Article 19(3)of Regulation (EC) No 1905/2006 , namely 
that ‘strategy papers shall,  in principle, be based on a dialogue with the partner 
country or region which involves civil soci ety and regional and local authorities’; 
considers, in this respect, the involveme nt of national parliaments in partner 
countries indispensable to achieving genuine ownership of the process; urges the 
Commission to make every effort to impr ove dialogue with these bodies at the 
various stages of the programming process.  (§ 191)  
Commission's response:  
The current Country and Regional St rategy Papers 2007-2013 for the countries 
covered by the DCI Regulation were prepared over the period 2005-2006, prior to 
the entry into force of the DCI Regulatio n. During that period measures were 
taken in the majority of the countries co ncerned to consult civil society, notably 
through the organisation of meetings and workshops as well as the publication on 
EC Delegation websites of Concept Papers. In  the context of the Mid-Term Review 
of the DCI Strategy Papers, taking place in 2009 with a view to the preparation of 
the 2011-2013 Indicative Programmes, further specific instructions have been 
issued regarding consultation with civil soci ety in the review process. Attention has 
also been drawn to consultation with parliamentary authorities. 
EN 70   EN Pre-accession strategy 
112. The European Parliament points out that , for the first time following the accession of 
new Member States, the Commission has introduced a cooperation and verification 
mechanism for Romania and Bulgaria to remedy 'shortcomings in the areas of 
judicial reform and the fight  against corruption and orga nised crime and to monitor 
progress in these areas' (COM(2008)0063), a nd wonders about the effectiveness of 
that mechanism, as well as the relevance and reliability of the information supplied to the discharge authority. 
 Notes that a number of Co mmission directorates-general and offices are responsible 
for administering this mechanism, under th e authority of the Secretary-General; 
considers the combined efforts of those bodies to be inadequa te; expects better 
coordination and the systematic inclusion of  an assessment of all the Commission 
bodies concerned in the pr ogress reports; wonders what  lessons for applicant 
countries and potential applicant count ries the Commission draws from the 
mechanism.  (§§ 192-193)  
Commission's response:
 
When Bulgaria and Romania entered the EU on 1 January 2007, a Co-operation 
and Verification Mechanism was set up to he lp remedy certain shortcomings in the 
areas of judicial reform, the fight against corruption and, for Bulgaria, organised 
crime and to monitor progress in these areas through periodical reports. Four 
benchmarks have been established for Romania and six for Bulgaria. In the 
context of the mechanism, the Commission has established a close dialogue with 
the authorities of the two Member States concerned but also with Civil Society, 
individual experts and other Member States. This dialogue takes place 
continuously and at different levels. The Commission reports biannually on 
progress under the mechanism and all re ports are regularly addressed to the 
European Parliament and to the Council. The Council has taken a close interest 
and has each time adopted Council conclusions in the matter, totalling 5 to date. 
The close dialogue established with Bulgaria and Romania and the Commission's 
reports have lead to concrete progress on the ground in both countries in terms of 
legislative, structural and procedural  reforms. Romania and Bulgaria have 
confirmed their commitment to the mech anism, nevertheless in some areas 
concrete results of the reform measures taken are not yet visible and will require 
longer term efforts given their nature. The Commission has therefore called upon 
both countries to strengthen their efforts and focus them on those areas which are 
most in need. In addition, a special en velope under the Transition Facility has 
been made available for the purpose of supporting both countries in their reform 
efforts. 
Financial assistance continues to be pr ovided to support the reform of the 
judiciary and anti-corruption measures, in particular through the transition 
facility, which has a specific focus on the benchmarks to be met under the 
Cooperation and Verification Mechanism. 
Through the Interservice Group Romania / Bulgaria, the views of all concerned 
Commission services on progress in Bulgaria and Romania are carefully taken 
EN 71   EN into account in the establishment of the periodic reports. In this context, the 
Commission has also addressed the issue of sound financial management and 
control which depends closely on a functioni ng judiciary and on an effective fight 
against fraud, corruption and organised crime. As the situ ation with the 
management of EU funds in Bulgaria gave rise to particular concerns from early 
2008 onwards, the Commission issued a re port on this matter in parallel and 
linked to the report under the mechanism on 23 July 2008. This report was equally 
transmitted to the European Parliament . Individual financing decisions are 
however taken in accordance with the re gulations in force by the respective 
competent Commission services. 
The new Instrument for Pre-Accession Assi stance includes all fo rms of assistance 
provided to potential candi date and candidate countries under a single umbrella. 
The IPA also harmonises the management  systems and control mechanisms. The 
Commission services concerned have also  coordinated their approach as regards 
the accreditation of implementing stru ctures for decentralised management. 
113. The European Parliament recalls that in it s Special Report No 4/2006 concerning 
Phare investment projects in Bulgaria and Romania the ECA drew attention to a 
large number of problems concerning the management of European funds, including 
irregularities regarding inv itations to tender and the eligibility of expenditure, cases 
of failure to use investment monies fo r their intended purpose and a lack of 
administrative capacity;  
 Voices concern, furthermore, at the fact  that the Member of the Commission with 
responsibility for enlargement failed to provide the Committee on Budgetary Control 
with sufficiently detailed information about  the scale of the s hortcomings in good 
time;  
 Voices serious concern at the fact th at the Commission suspended EUR 200 000 000 
in agricultural funding for Romania and froze EUR 250 000 000 in Phare funding, 
EUR 105 000 000 in Sapard funding a nd EUR 115 000 000 in ISPA funding in 
Bulgaria; notes that the fi nal loss for Bulgaria unde r Phare is EUR 220 000 000; 
 Considers that the Commission should step  up technical assistance to Member States 
to strengthen their administrative capaci ty; points out that sound management of 
European funds is an obligation and a dut y for all Member States, and supports the 
temporary suspension of funding by the Commission in cases where a Member State's management systems fail to function as required.  (§§ 195-199)  
Commission's response:
 
The Commission has taken the necessary action to answer the Parliaments' 
request. 
The Commission reacted quickly as soon as  it became aware of potential risks of 
mismanagement in Bulgaria, and took sever al timely and proportional measures to 
protect the financial interests of the Comm unity. Following identification of risks 
in its 2006 Annual Activity Report, which was available to the European 
Parliament, DG ELARG delayed EDIS accr editation of the Bulgarian agencies 
until June 2007, after accession, when it wa s granted conditionally. After audit 
EN 72   EN missions in autumn 2007 identified shor tcomings in meeting the conditions, and 
regular monitoring revealed significant irregularities in February 2008, payments 
were suspended in February 2008 for the two agencies concerned (except for 
twinning which was not affected). This si tuation led to reserv ations in the 2007 
annual activity report, presented to the European Parliament, and culminated with 
the withdrawal of the EDIS accreditation  for the same two agencies in July 2008. 
Unfortunately, these measures have not yet  led to sufficient improvements of the 
systems in Bulgaria to allow the Commis sion to propose the reinstatement of 
accreditation for the two agencies at this stage.  
The Commission will however endeavour to ensure that the European Parliament, 
and particularly its Committee on Budgetary Co ntrol, will be kept informed on this 
issue in the future.  
Moreover, the Commission wishes to provid e some clarification regarding one of 
the figures indicated for Bulgaria, name ly the amount of EUR 220 Million, which 
was lost for Bulgaria under Phare. Only part of this amount was not used as a 
direct consequence of the Commission's measures, as significant amounts of funds 
were already cancelled by the local authorities in any case. 
With regard to the suspension of paymen ts to two ex-ISPA projects in Bulgaria, 
the Commission interrupted these payments as  soon as the irregularities came to 
light and later confirmed this formally w ith a suspension decision. Thus, there was 
a limited financial risk to the EU budget. Bulgaria submitted a report on the action 
plan for restructuring the roads agen cy in November 2008 and DG REGIO carried 
out an audit of the corrective action taken in January 2009. As a result the 
Commission was able to lift the suspen sion for these payments in May 2009. 
Regarding SAPARD, the most recent inform ation to the Bulgarian authorities on 
the still outstanding issues was addressed in a letter of DG AGRI on 19 May 2009. 
The Romanian authorities have been informed  in a high level mission in February 
2009 to Bucharest and in a letter in June 2009 of still outstanding points regarding 
the implementation of the SAPARD action plan. Only when this information is 
received, the Commission will consider resuming the reimbursements under the 
SAPARD programme. 
114. The European Parliament notes that over the period 2007 to 2013, Bulgaria is to 
receive EUR 6 853 000 in structural f unding, and Romania EUR 19 200 000; in 
addition to the information given in the a nnual activity report and in the reports on 
the Structural Funds and the Cohesion Fund, calls for responsible and effective administration of these funds.  (§ 200)  
Commission's response:
 
The Commission is taking the requested ac tion. It will continue to use all the 
means at its disposal to ensure proper man agement of these funds. It is monitoring 
closely the compliance assessment pro cedure which makes sure before interim 
payments begin to flow that effective ma nagement and control systems have been 
set up to manage the funds. The pr ogrammes for the 2007-13 period contain a 
significant technical assi stance component to increa se administrative capacity. 
EN 73   EN 115. The European Parliament is of the opini on that the preparation of the absorption 
capacity of Romania and Bulgaria for funds  in the Agricultural and Cohesion policy 
fields has not been treated by the Commi ssion with the necessary seriousness, and 
that statements and actions of the Commi ssion in this context were misleading, not 
only for Parliament but also for the Bulg arian and Romanian governments, and were 
one reason for the loss of funds by those Member States; 
 Calls on the Commission to keep it informed  of the practical outcome of judicial 
reform and anti-corruption efforts and to include in the progres s reports criteria 
quantifying progress in these areas; 
 Considers that the EU institutions shoul d apply the principle of zero tolerance in 
connection with cases of misuse of Comm unity funds, fraud and corruption; calls on 
the Commission to ensure that undu ly paid amounts are recovered; 
 Agrees with the Commission that all acti ons and measures recently taken by Bulgaria 
need to be followed up by credible, struct ural corrective actions and a fundamental 
reform of all structures involved in the mana gement of EU funds, so as to ensure the 
correct and timely take up of funds and a hi gh level of transparency; calls in this 
context on the Commission to improve c oordination and communication with the 
national authorities and closely monitor the implementation of  the various action 
plans submitted to it by Bulgaria, and to keep Parliament informed thereof; asks the Commission to submit to it a special report on the state of play of the management 
and control of all EU funds in Bulgar ia covering the period until 15 July 2009; 
 Calls on the Commission, in the light of the last progre ss report and the setbacks with 
regard to the fight ag ainst corruption, to subm it to it a special repo rt on the state of 
play of the management and control of EU  funds in Romania and on the measures 
taken and the progress made in the fight ag ainst corruption coveri ng the period until 
15 July 2009.  (§§ 201-203, 205, 206)  
Commission's response:
 
With regard to the request of the Parlia ment to receive a special report on the 
measures taken and the progress made in the fight against corruption covering the 
period until 15 July 2009, the Commission refe rs to its fifth bi-annual reports to 
the European Parliament and the Council in the context of the Co-operation and 
Verification Mechanism (CVM) on progress in Romania (COM(2009 401 final) 
and Bulgaria (COM(2009) 402 final) adopted on 22 July 2009. 
The Commission has treated the Romanian  and Bulgarian accession with the 
appropriate seriousness and diligence. It ha s taken all necessary steps, before and 
after accession, to properly prepare and monitor both countries. The Commission 
continues to work in close cooperation with  national authorities in order to ensure 
that community funds are efficiently and correctly used. 
As regards the management and control of  EU funds in Bulgaria and Romania, 
the Commission will in autumn 2009 provide the Parliament with information on 
the state of play.  
When Bulgaria and Romania entered the EU on 1 January 2007, the 
aforementioned Co-operation and Verifica tion Mechanism (CVM) was set up to 
EN 74   EN help Bulgaria and Romania remedy certain shortcomings in the areas of judicial 
reform and the fight against corruption and for Bulgaria also the fight against 
organised crime and to monito r progress in these areas. 
The irregularities in the management of  pre-accession funds in Bulgaria since 
2007, and in Romania in 2008, have come to  light thanks to the Commission's 
controls. They are evidence of the effectiveness of the me chanisms in place and the 
Commission's supervisory activities. 
As regards the situation in Bulgaria, the Commission entertains a close and 
constructive dialogue since accession with  the Bulgarian authorities at technical 
and ministerial levels which is welcomed and publicly confirmed by Bulgaria. The 
Commission intensively discusses with the Bulgarian authorities all the technical 
issues in a constructive manne r and it will continue to do so with a view to solving 
all outstanding issues. 
With regard to the Structural Funds programming period 2007-2013, the 
Commission is monitoring rigorously the compliance assessment procedure, to 
ensure that management and cont rol systems are properly set-up. 
Operational programmes in both countries  have been effectively launched and 
projects already contracted are at satisfactory level, while many cohesion fund 
projects are already adopte d. The JASPERS facility assi sts national authorities in 
preparing major projects and both countries are well advanced in presenting major 
projects for financin g to the Commission. 
In Romania, several capacity building ac tions have been put in place and the 
Commission is working in close cooperatio n with national authorities to promote 
simplification of administrative procedures. In parallel, ex-ISPA projects have 
increased their absorption rhythm by 50% in 2007, 45% in 2008 and aim at the 
same levels in 2009. A well functioning au dit authority and an ad hoc structure 
(UCEVAP) for the ex ante control of public procurement provide to the 
Commission assurance on the legality and regularity of expenditure. 
In Bulgaria, a specific absorption monitoring system (LOTHAR) has been 
designed in cooperation with national au thorities and is now fully functional. 
On the basis of lessons learnt from EU  10 accession the Commission strongly 
advised Bulgaria and Romania to take key decisions to pr epare urgently and 
thoroughly for the absorptio n of pre-accession assistan ce, and also the EU funds 
after accession. The credit absorption for Romania and Bulgaria in the 
agricultural area is satisfying: The Commissi on during accession negotiations also 
pointed out in precise terms that the a ccurate implementation of the CAP and the 
good functioning of the Community's inte rnal market is impossible without 
reliable financial management and contro l systems, in particular the Paying 
Agency and the Integrated Administration and Control System (IACS), including 
the Land Parcel Identification System (LPIS). In 2006 the Commission concluded 
that there was no sufficient progress in preparing for the IACS. As a consequence 
the Commission adopted a Regulation est ablishing a safeguard mechanism aiming 
at eliminating the risk of not having operational IACS in both countries, which 
represented an additional incentive to speed  up and finalize in an acceptable way 
EN 75   EN the establishment of operational control systems. On this basis, the Commission 
informed Romania in October 2007 that the safeguard mechanism would be used 
involving a cut of 25 per cent of European Union farm payments to Romania 
unless serious shortcomings in the adminis tration and financial control system in 
Romania were addressed urgently. The Co mmission only decided to stop this 
procedure when it was assured that Roma nia had addressed the shortcomings in a 
satisfactory manner. An assessment on the state of play of the management and 
control of EU funds is included in th e relevant section of DG AGRI's annual 
activity report, as demonstr ated by the reservations. 
116. The European Parliament calls, furthermore,  on OLAF to forward to it the findings 
of its ongoing enquiries in Member States.  (§ 204)  
Commission's response:  
OLAF already reports to the EP on the findings of its completed investigations in 
Member States but has to respect the provisions of Regulation 1073/1999 which for 
pertinent reasons, in particular the secrecy of the investigation, do not permit it to 
give information on ongoing investigations. 
117. The European Parliament points out that it is the responsibility of the Commission 
delegations in the ap plicant countries and potential app licant countries to prepare 
those countries to ensure pr oper use of European funds; ca lls for anti-fraud strategies 
to be incorporated in this pre-accession pr ocess and for the relevant administrations 
to be trained under a programme of ex changes between the Commission and the 
administrations of applicant countr ies and potential a pplicant countries.  (§ 207)  
Commission's response:  
The Commission is taking  the requested action. 
The fight against corruption and organised crime is a key priority of all the 
Accession and/or European Partnership s for candidate and potential candidate 
countries. 
The Commission has also made it an integral part of its strategy for the 
implementation of IPA. All Multi-annual Indicative Planning Documents for IPA 
(MIPDs) now include the fight aga inst corruption as a priority. 
Those issues concerning the legislation to  be taken up in the framework of the 
approximation of the acquis are dealt with in the framework of several negotiating 
chapters within the enlargement proce ss, such as chapters 24 (JLS) and 32 
(financial control). 
In addition, technical assistance is foreseen for the preparation of the 
administrations that will be in charge fo r the management of IPA funds, as well as 
for the development of public finance co ntrol systems. Twinning with Member 
states will be one main tool for implementing these projects. 
EN 76   EN More practical initiatives are to be proposed and pre pared in co-operation with 
OLAF, possibly on the basis of those already  taken in the framework of the former 
enlargement rounds. 
118. The European Parliament calls on the Co mmission to play a more active role in 
connection with the expenditure control sy stems existing in Turkey, Croatia, Serbia, 
the Former Yugoslav Republic of Macedonia and the other Western Balkan countries 
during the pre-accession stage, and requests it  to provide Parliame nt, in its report on 
the progress of those countries, with more  detailed information on this issue, 
including a detailed analysis of the reas ons for any failings; cal ls on the Commission 
to introduce in the progress reports a system  of traffic lights (g reen, amber and red 
lights) to denote the progress made towards achieving the various key objectives.  (§ 
208) 
Commission's response:  
The Commission's authorising officers by subdelegation (AOSDs) of the level of 
Directors and Heads of Delegations already  play a very active role in connection 
with the existing expenditure control systems. 
The annual Progress Reports on candidate countries provide an overview on 
matters related to financial assistance and would also mention serious problems 
with clear political implications (such as  the risk of losing the conferral of 
management for decentralised implementa tion). In addition, in  acquis chapter 32 
(Financial control) the Commission reports on the protection of the EU's financial 
interests in the candidate countries. 
Due to the political nature of these reports, the Commission does not at present 
intend to extend the information provided  with more detailed analysis on control 
systems or the introduction of a traffic lig ht system in the reports. However, more 
information can be provided in the IPA annual report, the pr esentation of which 
might in future be closer aligned with th at of the yearly Enlargement Package (the 
general enlargement activity programme fo r the next calendar year) in autumn. 
119. The European Parliament deplores th e cases of fraud and mismanagement of 
European funds administered by the United Nations identified in connection with EU 
funding of reconstruction work in Kosovo and the lack of follow-up by the United 
Nations of these clearly identified cases; 
 recalls that the Investigation Task Force (ITF) established to investigate financial 
irregularities and fraud con cerning EU funds in Kosovo fi nished its operations in 
August 2008, that its final repo rt identified criminal c onduct on the part of, among 
others, United Nations staff, and that se veral international warrants were issued 
without any results being achieved in that  regard by the United Nations; asks the 
Commission to press for the execution of  these warrants; asks the Commission, 
further, to present a report on the legal follo w-up to all cases discovered; calls for the 
establishment of a successor organisati on, involving the Commission and OLAF, in 
the fight against fraud and irregularity.  (§§ 209 and 212)  
EN 77   EN Commission's response:  
The Commission accepts the request of the European Parliament and some of the 
necessary initiatives have already been taken. 
It is correct that since 1999 several cases of fraud have been detected in Kosovo. 
An OLAF/OIOS (UN Office of Internationa l Oversight) Investigation Task Force 
conducted a series of investigations in Kosovo in 2004/2005. The ITF found 
several cases of wrongdoing in the Publicly Owned Enterprises and the KEK and 
Pristina Airport. These concerned cases of  corruption, forgery of documents, sale 
of working certificates, etc. Some case s have resulted in successful judicial 
proceedings, which were concluded with th e imprisonment of the perpetrators and 
the recovery of funds. 
Although the ITF was dissolved in summer 2008, the fight against fraud, 
corruption and other irregularities is ensured in Kosovo. The UN's OIOS still 
supervises UN operations in Kosovo, and the FIU operates within the framework 
of the EU's ESDP Rule of Law mission EU LEX. In accordance with the provisions 
of EC Regulation 1073/1999 OLAF is still comp etent to carry out investigations in 
order to protect the EU’s financial interest s and is in particular  kept informed by 
ECLO (European Commission Liaison Office) and EULEX. 
The European Reconstruction Agency (ERA) has ceased to exist, but OLAF is 
working closely with the Pristina office ( ECLO) and is continuing to manage the 
investigation files submitted to it.  
The Commission is prepared to forward to Parliament the information provided to 
it by the SRSG on the situation and the outcome of the UNMIK initiatives. 
120. The European Parliament proposes that the Commission ask the Kosovo 
Government to supply an audit certificate in  respect of European funds, in particular 
those included in the budget, from  the country's audit authorities.  (§ 211)  
Commission's response:  
The Commission has taken due note of the European Parl iament's request for an 
audit certificate from the Kosovo Gover nment, as under the current direct 
management by the Commission the appropriate audit arrangements have already 
been made. 
In the context of Macro-Financial Assistance (MFA), which is to be provided in 
the form of budget support, the payments become possible if the Commission signs 
a Memorandum of Understanding (MoU) wi th the Kosovo authorities stipulating 
that payments be subject to stringen t conditions. The relevant Financing 
Agreement already includes provisions fo r inspection, fraud prevention and audits 
as well as explicit references to the Eu ropean Anti Fraud Office and the European 
Court of Auditors. 
On the other hand, the Kosovo authorities  are at present not involved in the 
management of pre-accession assistance funds. These funds are managed by the 
Commission itself under centralised management through the Commission's 
Liaison Office in Pristina and are subject to the terms and conditions of the Grant 
EN 78   EN and Financing Agreements for the respec tive programmes concerned, as well as 
the IPA Framework Agreement signed w ith the authorities. These documents 
include detailed descriptions of arrangem ents allowing for the inspection, fraud 
prevention and audits in line with the Fi nancial Regulation. They also include 
explicit references to the right of th e European Anti-Fraud Office and the 
European Court of Auditors to carry out controls at any time. 
Within the framework of the provisions  for decentralised management, which 
would be put in place in Kosovo some tim e in the future, the local authorities will 
need to appoint a national au dit authority. This authority  would at that point be 
competent to audit EU funds and woul d then be in a position to issue the 
certification suggested. In the meantime, th e Commission will continue to intensify 
its cooperation with the competent audit bodies in Kosovo. 
EN 79   EN Administrative expenditure 
121. The Commission should ensure that th e Belgian and United Kingdom governments 
commit to meeting their obligations under the existing inter-governmental 
agreements - for Belgium the earliest possible provision of a fourth or even a fifth European school, for the UK the secondment of a sufficient number of teachers - and 
expects the current enrolment policy regard ing the Berkendael/Laeken schools to be 
revised in order to avoid long and un acceptable travelling times for children.  (§ 214)  
Commission's response:
 
As regards the obligations of the Belgia n government, the Commission agrees with 
the observation, as the overcrowding of th e Brussels schools is a fact. Concerning 
the 4th Brussels school, a provisional site has been set up (Berkendael) and the 
Belgian authorities have promised that the de finitive site (Laeken) will be available 
in 2012. Concerning the 5th school, the Board of Governors of the European 
Schools have instructed their Secretary Ge neral to start the negotiations with the 
local authorities. 
As regards the obligation of the UK government, the context is different. The 
Board of Governors adopted a decision in  April 2009 regarding the cost sharing 
which gives the possibility to have non native teachers seconded by MS, after a 
strict quality control of the linguistic  competences. The Board also agreed to 
consider the proportion of pupils of a given nationality as a good parameter to 
estimate the fair proportion of seconded teachers from the same MS. Furthermore, 
when part-time teachers compensate the absence of seconded teachers, the 
additional burden on the EU contribu tion will be quantified and monitored 
annually. 
As regards the enrolment policy, the rather  stringent policies for the school years 
2007-2008 and 2008-2009 (which resulted from  the overcrowding) have been 
revised and the new policy adopted by th e Board for the school year 2009-2010 has 
resulted in 92% of children being registered  in the school of their parents' choice. 
122. The Commission should reorganise its hum an resources in or der to reduce the 
proportion of staff working in administrati ve support and coordination areas to 20%.  
(§ 217)  
Commission's response:  
The Commission is already implementing meas ures to limit the proportion of staff 
working in the areas of support and c oordination: this corresponds to the 
Commission's commitment not to ask for new staff until 2013 (save for 
institutional changes) and to redeploy  staff now in support and coordination 
functions to the policy areas. Incidentally , it has not been shown that fixing the 
benchmark at 20% would be the most appropriate. Nor it is by any means proven 
that an administration with such a percentage would perform better. 
123. The Commission should inform the European Parliament of how staff mobility might 
be confined to sensitive posts.  (§ 218)  
EN 80   EN Commission's response:  
The Commission would like to clarify that its general policy on mobility was not 
only intended for sensiti ve posts. The guidelines on mobility adopted in 2002 
confirm the principle that mobility is voluntary, but encouraged after 5 years. The 
only cases where mobility is (ultimatel y) mandatory concern on the one hand 
management posts and on the other hand the sensitive functions. This policy is 
part of a wider Human Resource approach, wh ich aims at aligning the interests of 
the services and those of the individuals.  The Commission is aware of the possible 
impact of badly managed mobili ty, which is to be mitigat ed with forward-planning 
and good practices for file hand-over. 
Regarding the specific situation of se nsitive posts, and subsequently to the 
adoption by the Commission of the reviewed framework for Internal Control 
Standards for Effective Management (COM(2007)1341), the Secretary General 
and the Directors General for Budget, and for Personnel and Administration 
adopted on 19 December 2007 a reviewed guidance on mobility and sensitive 
functions (SEC(2008)77). With the experience  of the previous system, they focused 
on truly sensitive areas, related to the ri sks, to the mitigating controls in place 
(such as the instruments of delegation, supervision and the four eyes principle) 
and to the real possibilities for fraud or misuse. They also propos ed mobility as the 
ultimate measure for the management of sensitive functions, the effects of which 
are then mitigated by other internal cont rol measures such as handover files and 
general continuity plans. The new guid elines and their implementation in the 
Directorates-General have resulted in a considerable reduction in the number of 
posts involving sensitive functions, whic h is expected to continue in 2009. 
124. The Commission should inform Parliament  of all new projec ts concerning its 
buildings stock prior to their adopti on, and should notify the Committee on 
Budgetary Control of all initiatives and ne w decisions concerning property projects, 
including preparatory work and invitations to tender, in respect of which it is 
proposed that a tender committee should be established, which would include representatives from Parliament.  (§§ 219 and 220)  
Commission's response:
 
Information on building needs is provid ed on two separate occasions: annually 
with the preliminary draft budget (PDB ) and for each building project with 
significant financial implications (see also reply to par agraph 2, p. 38 of the 
Council recommendation on the 2007 discharge). 
As a standard part of the information pr ovided with the PDB, the Commission 
gives all the details concerning the real es tate situation (list of buildings including 
new and abandoned buildings, m², contract s, costs). Subsequently to the EP's 
resolution on the 2008 Draft budget, the Commission has forwarded to the 
budgetary authority the 2009-2011 planning in this area. 
Pursuant to Article 179 (3) of the Fina ncial Regulation, the Commission always 
informs the budgetary authority for a ll building projects with a significant 
financial implication for the budget and this  information is given in advance of the 
legal commitment and contains an updated  planning. Pursuant to Art. 263 of the 
EN 81   EN Implementing Rules, the Commission info rms at the same time the budgetary 
authority of its schedule  for building projects. 
The Authorising Officer by Delegation (A OD) has full responsibility for the 
procedure and decides autonomously on  the composition of the opening and 
evaluation committees. Obviously, in the case of interinstitutional procedures, a 
representative of the EP's administratio n could very well be nominated by the 
AOD, as it has been done in several instances. 
125. OLAF should notify Parliament of any cases  of fraud brought to light in the property 
policy field and to look into po ssible conflicts of interest.  (§ 221)  
Commission's response:  
OLAF agrees to provide general informa tion on the outcome of its completed 
investigations while at the same time resp ecting the need for confidentiality for 
cases where action is still ongoing by  the national judicial authorities. 
126. The Commission should conduct an audit of both its own buildings  and the buildings 
of all the other Community institutions , and to look into the idea of a common 
property management structure.  (§ 222)  
Commission's response:  
Each authorising officer is responsible fo r the appropriations assigned to them and 
for implementing the control framework, including the audit plan. 
Furthermore, expenditure on buildings has recently been examined in an ECA 
Special Report (No 2/2007).  It would be inefficient for several bodies to carry out 
further audits on the same subject. 
The Commission is ready to take part in an y interinstitutional initiative, including 
one launched by the relevant administrati ve departments of the two arms of the 
budgetary authority.  However, as was pointed out in a previous reply to the 
budgetary authority (cf. report A-0069/2007 of 29 March 2007 on general 
guidelines for the 2008 budget), it has iden tified some remain ing difficulties, 
linked in part to political an d budgetary constraints, the desire of each institution 
to maintain its independence an d the large number of sites. 
EN 82   EN Follow-up measures in the light of the discharge 
127. The European Parliament deplores the f act that, in the annual accounts of the 
European Communities for the financial y ear 2007, follow-up measures in the light 
of the discharge, stating merely that when granting discharge Parliament may 
highlight observations it considers impor tant, often recommending actions that the 
Commission should take conc erning these matters; note s that, although this is 
correct, the Commission fails to mention th at Article 276 of the EC Treaty also 
requires the Commission to take all appropr iate steps to act on the observations in 
Parliament's decisions giving discharge re lating to the execution of expenditure; 
reminds the Commission, therefore, that the calls made in its di scharge resolution are 
not simply non-binding reco mmendations, but instructi ons which the Commission 
must act on when implementing the budget.  (§ 223)  
Commission's response:  
The Commission follows-up all discharge requests except where they are not in 
line with the existing legal framework or its institutional prerogatives. Pursuant to 
Article 276(3) of the EC Treaty and Ar ticle 147 of the Financial Regulation it 
reports each year to the European Parliament  on the measures taken in the light of 
the observations and comments made by the Parliament in its discharge decisions. 
In the present report on the follow-up to  the 2007 Discharge Decisions as well as 
in last year's report on the follow-up to the 2006 Discharge Decisions (COM(2008) 
629 of 15.10.2008), the Commission accepted over 95% of the European 
Parliament's requests to it. 
The Commission is thus committed to ensuri ng that discharge requests from the 
European Parliament and the Council and audit recommendations from the 
European Court of Auditors are systematic ally followed up and implemented. Each 
Directorate-General or service is responsi ble for the follow-up of external audit 
and discharge observations which concer n them and must report in a central 
database on the progress made. 
EN 83   EN Special Report No 6/2007 on the effectiveness of technical assistance in the context of 
capacity development 
128. The European Parliament considers that technical assistance (T A) and other types 
of external aid, which is still too donor-dri ven, often inefficient and unsustainable, 
urgently needs to be reformed by, among ot her things, promoting local ownership, 
more effectively coordinating the resources between Member States at Union and international level, and ensuring that ther e is sufficient time to implement projects; 
 Notes in this context the approval by the Commission's se rvices in July 2008 of the 
Backbone Strategy and the Work Plan to meet  aid effectiveness targets on Technical 
Cooperation and Project Implementation Un its; calls therefore on the Commission to 
inform Parliament about the implementation of this strategy for the first time before 
the end of March 2009, and thereaf ter at six-monthly intervals; 
 Notes the belated information on the am ounts spent on TA recently provided by the 
Commission to the ECA following publicatio n of the ECA's special report; is 
surprised that this information was not made  available during the preparation of the 
special report; acknowledges that the definition employed by the OECD’s Development Aid Committee is broad and in practice leads to differences in 
interpretation; hopes that the strategy adopted  by the Commission will also lead to a 
more operational definition of TA.  (§§ 224-226)  
Commission's response:
 
The Commission refers to the report on "State of progress on the implementation 
of the Reform on TC" sent to the Europe an Parliament on the 30th of March 2009 
and the Attached Guidelines on "Making TC more effective". A state of progress 
report on backbone strategy (TA/PIU) will  be updated for submission to the 
European Parliament in September 2009. 
129. The European Parliament calls on the Commission to propose the necessary 
legislative changes before the end of the mandate of the current Commission, and 
urges Member States to take the necessary st eps to ensure the widespread use of this 
instrument, adapted to particular needs,  in those countries,  and to amend the 
regulation on the implementation of the 10th EDF accordingly.  (§ 227)  
Commission's response:  
The possibility to extend Member State public agents expertise worldwide is not 
constrained by any legal provision but by  the capacity and availability of such 
expertise in each Member State. The Co mmission will do its utmost to encourage 
Member States to mobilise this public expertise. 
A note will be submitted to Parliament in  September 2009 explaining actions in a 
similar spirit as the 'twinning instrument' in other regions. 
130. The European Parliament deplores the f act that the suspension clause, allowing an 
accelerated procurement procedure, is bare ly used by the Commission; requests the 
EN 84   EN Commission to use this facility wisely in order to improve the timetable for the 
implementation of TA operations.  (§ 228)  
Commission's response:  
The Practical Guide for contract procedures  for external actions provides that in 
duly justified cases, tender procedures ma y be published with a suspension clause 
(i) before a financing deci sion is adopted or (ii) be fore a financing agreement 
between the European Commission and th e beneficiary country is signed. The 
Community will study the possibility to exte nd further the use of this suspension 
clause. 
As far as the EDF is concerned, the use of  this clause before the adoption of the 
financing decision is expressly author ised under the EDF (see article 19b of 
Annex IV of the Cotonou Agreement) in al l duly substantiated cases in order to 
ensure early project start-up. The Co mmission will investigate making proposals 
(within the context of the revi sion of the Financial Regula tion) to facilitate further 
simplification of the financial management  system for external aid e.g. to extend 
the use of the suspension clause in tendering procedures. 
131. The European Parliament finds it unaccep table that some companies deliberately 
propose experts with good CVs in order to  win a contract wh ile knowing that the 
expert in question will not be available to take up the assignment; agrees with the 
ECA that the selection criteria for TA used by the Commission are inappropriate; 
 Requests therefore that the Commission ta ke much greater account  of other criteria 
(such as those proposed by the ECA), rather than solely consider ing the CV of the 
team leader expert; suggests that this could be done, for example, by creating a database, compatible with legal requiremen ts, of firms which fa il to provide the 
proposed expert, which should in turn prevent them from participating in 
procurement for a specified period; notes that the Commission has adopted 
Regulation (EC, Euratom) No 1302/ 2008 of 17 December 2008 on the central 
exclusion database and Decision 2008/ 969/EC, Euratom of 16 December 2008 on the 
Early Warning System for the use of aut horising officers of th e Commission and the 
executive agencies , but that these ne w instruments do not make it possible to 
exclude firms on this basis; further notes that  these aspects are part of the Work Plan 
(Axis 3, Actions 13-15), and calls on the Commission to apply the related actions 
immediately; 
 Calls on the Commission, as far as possible,  to act in a manner consistent with its 
transparency initiatives a nd to take into account Parliament's resolution of 19 
February 2008 on transparency in financial matters, and recommends that a database 
be set up providing an overview of TA missi ons and results which can be used for 
future TA tasks and to prevent duplications.  (§§ 229-230 and 232)  
Commission's response:
 
The profile and expertise of each expert  remain the first critical factor for 
performance. The Commission reminds that the selection criteria in call 
procedures are pre-established in an obj ectively verifiable and transparent way and 
are adapted to the specific needs of each individual call. Proposed experts can be 
EN 85   EN considered only after they sign and sub mit their own availability and exclusivity 
statement. 
AIDCO will study the possibility of sett ing up a data base recording performance 
of experts and contractors as well as the una vailability of experts at the start of the 
contract. However the possibility to exclud e firms from future tenders is limited to 
the cases foreseen in the Financial Regulation. 
132. The European Parliament agrees with th e ECA that there is incoherence in the 
Commission's approach regarding the use of partner countries' public financial 
management and procurement systems, which stands, sometimes, in direct contradiction to the Union’s commitments in  the context of the Paris Declaration on 
Aid Effectiveness endorsed on 2 March 2005 ; urges the Commi ssion therefore to 
ensure the quick implementation of these commitments on the basis of the strategic 
dialogue provided for in the framework of the Accra and post Accra work stream and 
the Work Plan actions (Axis 1, in particular Action 20).  (§ 231)  
Commission's response:
 
In line with the internatio nal commitments taken in Pa ris and Accra, the EC is on 
track to achieve the target of channe lling 50% of government to government 
assistance through national country system s. Results scored respectively 35% and 
34% for use of country public financial management systems and use of country 
procurement systems in 2007. Initiatives have been taken to increasingly use 
country systems and to ensure a coherent  approach concerning the use of partner 
countries' public financial management and procurement systems. 
In order to make aid more effective and in line with the European Consensus on 
development (2005), the Commission gives, where circumstances permit, priority to 
budget support, which favours by its nature  the increased use of country systems. 
Indeed, the use of budget support strengthens country ownership, supports 
partner’s national accountability an d promotes sound and transparent 
management of public finances. The Commission assessed budget support 
projections to 2013 in order to improve medi um term predictability of the public 
financial assistance channelle d to the partner countries. 
Furthermore, some operational tools for decentralisation have been adopted in 
2008-09: 
The new Practical Guide to Contract pro cedures for EC external actions has been 
redrafted by outlining the applicable rules for decentralised management. 
The Commission has adopted a Short Guid e on Decentralised management which 
details the new rules. This document provid es the required fram ework to allow the 
EC to meet the objectives of Paris and Accra regarding the increased use of 
national country systems. 
In order to assess whether the partner count ry has the capacity and the reliability 
to manage external EC funds, the Commissi on has also adopted terms of reference 
for assessing partner countries systems. 
EN 86   EN However, progress in the use of country  systems is tempered by specific 
constraints, in particular the need to ensure that the administrations of the 
beneficiary countries are solid enough to guarantee the correct use of EU funds. 
Both the Court and European Parliame nt rightly insist on the Commission 
remedying the detected weaknesses in the financial procedures and controls of 
implementing organisations, among whic h the beneficiary administrations. 
Moreover, the Financial Regulation does not currently provide the appropriate 
flexibility to fully respond to the ambiti ous objectives of the Accra commitments. 
The Commission will rely on the support of  the budgetary auth ority to amend the 
Financial Regulation on the occasion of its next revision. 
EN 87   EN Special Report No 1/2008 concerning the procedures for the preliminary examination 
and evaluation of major investment  projects for the 1994-1999 and 2000-2006 
programming periods 
133. The Commission should review the strict approval  procedure for major projects, and 
rationalise decision-making by indicating real values, ther eby avoiding treating the 
procedure as an excessively ‘administrat ive procedure’, reducing the length of the 
decision-making process to a reasonable duration, and establishing, as soon as 
possible, an independent unit for major pr ojects with horizontal competence within 
the Directorate General for Regional Policy (DG REGIO); the Commission is 
reminded of the importance of funding investment in software but it must not reduce the number of on-the-spot checks as  a result of this investment.  (§ 233)  
Commission's response:
 
The Commission has taken the requested action. 
For the 2007-13 programme period a numb er of improvements have been 
introduced in the procedures and workin g practices which will make for more 
efficient and consistent assessment of Major Project applications. These 
improvements include standard applicatio n forms for use by Member States, 
computerization of all the data, development of cost-benefit analysis software, the 
setting up of a dedicated assessment team  to support the work of the geographical 
units in assessing applications, the operatio n of the JASPERS instrument to assist 
Member States, and a framework contract to  provide specific technical assistance. 
134. The Commission should report on the practical  application of the n+2 and n+3 rules 
for major projects, since some Member Stat es have tried to ‘circumvent’ the ERDF 
rules (more specifically, the n+2 rule) by merg ing a number of projects such that the 
total figure for these fell just short of the th reshold values for major projects and then 
waiting for the Commission decision to suspend the n+2 rule.  (§ 234)  
Commission's response:  
The Commission will not be taking the requested action. 
To avoid the artificial grouping of projects, the Commission systematically verifies 
the correct application of Ar ticle 39 of Regulation No 1083/2006, and in particular 
that the threshold for a major project is reached and the requir ement is met that a 
major project should be "intended in itself  to accomplish an in divisible task of a 
precise economic or technical nature".  
The advantage of major project stat us under the "n+2/n+3" rule is 
counterbalanced by the more stringent info rmation requirements associated with 
applications. 
Therefore, in the Commission’s opinion, a report on the practical application of 
the rules to major projects is not ne cessary, as there is no real risk. 
EN 88   EN 135. The Commission should overturn the ‘ri sk-averse’ culture (with high-quality, 
innovative investments losing prominence),  a practice which runs counter to the 
Community’s efforts as laid down in the Lisbon Strategy.  (§ 235)  
Commission's response:  
The Commission will not be taking the requested action. 
Member States are required to allocate  60% of the funds in the Convergence 
Objective and 75% of those in the Regi onal Competitiveness and Employment 
Objective to the priorities of the Lisbon  Agenda including innovation, R&D, and 
information and communication technologies. 
These allocations will be monitored throug h the data Member States are required 
to provide to the Commission on the ca tegories of their expenditure. Moreover, 
major projects applications now have to  include the NACE codes concerned. 
During the 2007-13 programming period, the estimated investments under 
Cohesion Policy in the innovation area are put at €86 billion, which is 25% of total 
funding. 
The Commission is engaged in  many initiatives in support of innovation projects. 
These are summarized in its Communication on "Cohesion Policy: investing in the 
real economy" (COM(2008) 876). 
136. The Commission should fund education and training for its own staff (DG REGIO) 
instead for a separate group (JASPERS), whic h is located within the structure of the 
European Investment Bank and is theref ore not accountable to  the Commission for 
its work.  (§ 236)  
Commission's response:  
The JASPERS instrument was set up to prov ide assistance to Member States in the 
preparation of major projects before thei r submission to the Commission. This is 
an important improvement, as former e xperience showed that many projects 
submitted were insufficiently prepared (n otably in the areas of State aid, public 
tenders, technical specifications, etc.). The recourse to JASPERS experts has no 
link with the appraisal of the major pr oject applications by  DG REGIO staff. 
Numerous training sessions are organise d within DG REGIO on how to appraise 
major projects. Furthermore, a five-peop le team dedicated to the appraisal of 
major project has now been set up with in the Coordination Unit of DG REGIO 
which provides support to the geograph ical units. Finally, in the case of 
particularly technical projects, outsid e experts can contribute through a 
framework contract. 
137. Monitoring of major projects needs to be focused on information to be provided for 
by Member States because there is currently  no tangible evidence that major projects 
financed by Community funding are effective and that the Member States have used 
the funds received as effectivel y and productively as possible.  (§ 237)  
EN 89   EN Commission's response:  
The Commission is taking  the requested action. 
The Commission agrees that there is a need  for more harmonised information on 
reporting on completed major projects an d has proposed some guidance in this 
regard in the context of clarifying repor ting requirements in the implementing 
regulation. 
It should be noted that the current re gulation governing the Structural and 
Cohesion Funds in Article 49(3) is quite clear that the Commission carries out ex 
post evaluations at the level of operational programmes. There is no mention of 
project level evaluation. Nonetheless, th e Commission undertakes evaluations of 
samples of projects (e.g., for the Co hesion Fund and ISPA 2000-2007 and in 
2014/15 on the 2007-2013 period), but this work  should be complemented and built 
on by evaluations carried out by the Member States. 
The Commission intends to continue to encourage Member States to carry out ex 
post evaluations (and/ or cost benefit an alyses) of major projects, recognising, 
however, that there is no legal obligation for them to do so. Member States' project 
level evaluations can add value to the broader evaluat ions carried out by the 
Commission. 
It should be noted that the focus of this  work is on evaluation and learning, not 
control. Requirements for control for majo r project are the same as those for all 
ERDF and Cohesion Fund expenditure. 
138. The Commission should ensure that its Intern et site will enable citizens to monitor 
the status of any major project.  (§ 238)  
Commission's response:  
The Commission is taking  the requested action. 
The Directorate General for Regional Po licy is currently developing a database of 
project fiches accessible on its internet site (Inforegio) which will display summary 
information on major projec ts as soon as they are adopted by the Commission, and 
which will be regularly updated. 
EN 90   EN Special Report No 2/2008 concerning Binding Tariff Information (BTI) 
139. The European Parliament urges the Commission to endeavour to resolve the 
outstanding problems and shortcomings as a matter of urgency, since they could 
result in a loss of revenue for the Union in the form of traditional own resources; 
 Urges the Commission to resolve tariff-classification disputes by the deadlines laid 
down by Community law and, at the latest, with in five months and, in view of the 
possible loss of own resour ces, to increase the number of staff working on BTI and 
classification to four persons  and to ensure that those persons also carry out more 
risk analyses and exercise more stringent scrutiny of Member State contributions to 
the system, possible abuses of the peri od-of-grace system and BTI 'shopping'; 
 Calls on the Commission to provide, by the end of 2009, information on all the 
initiatives and measures take n on the basis of the ECA's observations, together with 
details of their implementation.  (§§ 239, 241, 242)  
Commission's response:  
As requested by Mr Staes (MEP) in his working document of October 2008 on the 
Special report of the Court of Auditors,  the Commission informed the European 
Parliament of the measures taken on the basis of the observations by the Court of 
Auditors by the end of 2008 (letter sent to Mr Staes on 18 December 2008). The 
Commission will provide the European Parlia ment with further information on the 
outcome of discussions with regard to the review and fine-tuning of the final draft 
of Implementing Provisions of the Modern ised Customs Code, including the draft 
provisions concerning periods of grace, which will take place during the next BTI 
Committee in early September 2009. 
However, it should be noted that the legislation provides that divergent tariff 
classifications have to be solved within six months and shortening this time period 
to less than six months, as requested by  the European Parliament, would not be 
feasible because of procedural constraint s. The solution of a case of divergent 
classification requires that agreement is  reached in the Customs Code Committee 
on the characteristics and description of  the products to be classified, on the 
correct classification and on the type of measure to be adopted to solve the 
divergent classification. This process requir es often that the same file is discussed 
at two or more meetings of the Commit tee, before the Committee can adopt an 
opinion on the proposed measure. The mee tings of the Committee take place with 
an interval of at least three months and after the vote in the Committee the 
measure still has to be adopted by the Commission, in all Community languages. 
In a large majority of cases of divergent classification, a solution within five 
months is therefore not possible. 
EN 91   EN Special Report No 3/2008 on the European Union Solidarity Fun: how rapid, efficient 
and flexible is it? 
The European Parliament has made no specific requests to the Commission. 
Commission's response:  
No reply necessary. 
EN 92   EN Special Report No 4/2008 concerning the impl ementation of milk quotas in the Member 
States which joined the European Union on 1 May 2004 
140. Continue to take all steps necessary in order to ensure effective monitoring of the 
establishment and management of the milk quotas system.  (§ 247)  
Commission's response:  
The requested action has been taken. Commission services are continuously taking 
all necessary action to ensure the effect ive monitoring of the milk quota regime. 
141. Ask the new Member States to adhere to th e general principle that all milk marketed 
must be recorded.  (§ 249)  
Commission's response:  
The requested action has been taken. The Commission reminded all Member 
States of this general principle in  a letter sent on 18 December 2008 (AGRI 
D/30692). 
142. Ask the new Member States to improve their database record-keeping and to avoid 
unnecessary checks.  (§ 250)  
Commission's response:  
The requested action has been taken. In the framework of bilateral contacts with 
the new Member States, the Commission has regularly encouraged new Member 
States to improve their database record -keeping. However, the Commission does 
not agree with the wording of the seco nd part of the request "…to avoid 
unnecessary checks" since this wording gives the impression that there are 
controls that are unnecessary, thus giving an incentive to Member States to ask for 
removal of controls. 
143. Continue to assess developments in the dair y sector, in particular  those linked to its 
market, to the situation of producers, and to the implications for regional development, in particular in the assessment reports to be submitted before 31 
December 2010 and before 31 December 2012 under the terms of the political 
agreement on the common agricultural policy ‘health check’ concluded in November 2008.  (§ 251)  
Commission's response:
 
The Commission will be taking action in line with what was agreed in the Health 
Check. The political agreement requests th e Commission to evaluate the evolution 
of the milk sector, in particular of its ma rket, and to ensure this follow up in the 
framework of the evaluation reports fores een by the political agreement before the 
31st December 2010 and before the 31st December 2012. 
EN 93   EN However, the wording by Parliament does not reflect the politi cal agreement linked 
to the Health Check but goes beyond it and the Commission will not be taking 
action to that extent. 
144. Abide by all of the ECA's recommendations in connection with the 'health check' and 
to consider possible adjustme nts to the common market or ganisation for milk and the 
milk quota scheme, which should focus on: 
 (a) transitional and accompanying measures  to be envisaged in regions where 
small producers are still very much in the majority; 
 (b) the need for milk producers in the new Member States to have a clear 
regulatory framework and clear prospects en couraging them to make the investments 
that are vital in order for th eir activity to remain viable.  (§ 252)  
Commission's response:  
The requested action has been taken. 
A political agreement on the CAP hea lth check was reached on 20 November 2008.  
It was decided at the time that the dairy industry should be made more efficient 
and more responsive to market trends an d, in particular, to the prospect of the 
quota being withdrawn by 2015.  As of 2009 the quota level has gradually been 
increased in identical fashion for all Member States.  It has been decided to 
implement five quota increases of  1% per annum from 1 April 2009. 
The Commission maintains that this will provide a predictable, transparent and 
objective development perspective for all pr oducers irrespective of where they are 
located in the European Union, thus a llowing for a smooth transition prior to 
2015.  
In addition, the situation of some produce rs deemed more vulnerable by virtue of 
their size or location has been taken into account by allowing for a degree of 
flexibility in the granting of direct payments.  The direct aid regime has been 
adjusted to enable those Member States whic h wish to do so to modulate the level 
of aid to some producers subject to  compliance with certain limits.  A milk 
production component has been integrated  into objectives for rural development 
measures so as to facilitate restructuring of the industry. 
A wide-ranging review of the dairy CMO has been carried out and certain 
measures deemed inefficient, like private storage of cheese and marketing aid for 
butter, have been abandoned. 
EN 94   EN Special Report No 5/2008 - The Europe an Union's agencies: Getting results 
145. The European Parliament welcomes the ECA special report and urges the 
Commission to note the shortcomi ngs identified in it, as well as to take steps in line 
with the ECA’s recommendations; 
 Calls on the Commission to develop and implement a general management system 
for the EU 'regulatory' agencies, based on explicit criteria, such as transparency, 
economy, efficiency, effectiveness and excha nge of best practices; takes the view 
that the Commission should be in active co mmunication with the Union agencies and 
should assist management boards in the implementation of activity-based budgeting 
and management (ABB/ABM); 
 Calls on the Commission to introduce an effective monitoring system for the Union 
agencies, allowing internal transfer of best practices and methodology and containing 
a range of both general and specifi c indicators for evaluation purposes; 
 Calls on the Commission to develop guidelines for improving the planning, 
monitoring, reporting on and evaluation of the agencies' activities and fully to 
implement the concept of 'getting results' established by Regulation (EC, Euratom) 
No 1605/2002 in 2002 and the framework Financial Regulation for the agencies.  (§§ 
253-256)  
Commission's response:  
The Commission is looking at the assistance it can offer agencies via its 
departments and representatives on agencie s’ management boards with a view to 
implementing the Court’s recommendations.  
The Commission is not in a position to deve lop a general management system or to 
impose rules of conduct for planning, mo nitoring and reporting on agencies in 
view of their legal indepe ndence and the restrictions on its own powers laid down 
by the legislator in the act setting up each agency.  
However, the Commission takes the view th at a consistent policy on the approach 
to agencies would improve their trans parency, efficiency and effectiveness.  This 
stance is also reflected in the Communica tion of the Commission of March 2008 
“European agencies – The way forward” and in the approach taken by the 
interinstitutional working group, which comprises representatives of the three 
institutions.  Following the first meeting of the gr oup at political level on 10 March 
2009, intensive work is conti nuing at technical level.  Work at this stage consists in 
preparing factsheets for each discussion poi nt identified at the first meeting of the 
group at technical level.  Work with a view to developing a common approach to 
agencies will be continued using these factsheets. 
The Commission also supports the idea of exchanging best practice to enable 
agencies to benefit from our experience.  The findings of the current evaluation of 
the system of decentralised agencies shou ld help to improve availability of 
comparable information. 
EN 95   EN The information provided in  2004 on the guidelines for evaluating agencies is a 
good example of an exchange of best practice.  In addition, the Commission 
regularly organises meetings with agencies to exchange best practice on evaluation 
and provides ad hoc assistance to agencies carrying out evaluations.  The 
introduction and implementation of new practices should be limited until the 
findings of the current evaluation and th e conclusions of the interinstitutional 
working group have been made public. 
EN 96   EN Special Report No 6/2008 concerning European Commission Rehabilitation Aid 
following the Tsunami and Hurricane Mitch 
146. The European Parliament calls on the Commission to draw all necessary conclusions 
from the experiences following Hurricane Mitch and the tsunami in order to improve future performance; urges the Commission to  play an active role at international 
level with a view to remedying systemic w eaknesses in international relief capacity.  
(§ 257)  
Commission's response:
 
The Commission, as demonstrated in its re sponse to the tsunami, will continue to 
play an active and leading role in the coor dination of the international response on 
major natural catastrophes, as well as supporting when necessary the capacity of 
the recipient country to ensure effective coordination and reconstruction. The 
Indonesia mid term evaluation will be finalised in 2009. 
In Sri Lanka, the action plan followi ng ECA recommendations included the 
reinforcement of mechanisms for intern al monitoring (don e in November 2007 
with the recruitment of technical expertis e for infrastructure and the setting up of 
tool for the comparison of civil works - in terms of (unit) costs, value for money 
and standards - which was done in mid 2008). 
147. The European Parliament calls on the Commi ssion to pay particular  attention to the 
following issues in future rehabilitation ac tions: ensuring that funding is needs-based, 
that the affected population – including th e poor, women and children – is at the 
centre of the aid measures and that de tailed and accurate information about the 
outcomes of assistance is available to both taxpayers in donor countries and the 
affected populations.  (§ 258)  
Commission's response:  
Disasters and crises are costly in both hum an lives and resources and therefore the 
main challenges - particularly for disa ster prone countries - are to identify 
appropriate preparedness measures to e nhance the self-capac ity of the population 
and to prevent new disasters. There is no unique model to respond ideally to 
reconstruction and rehabilitation constraint s, since there are no easy solutions to 
complex situations. The Commission has always considered that the affected 
population and more specifically the most vulnerable one, should be the direct 
beneficiaries of the EC funding mechanis ms enabling them to rebuild a viable 
livelihood as the first step towards sustai nable community development and an exit 
from the poverty spiral. For that pu rpose, extensive needs assessment are 
conducted on the ground in order to desi gn a meaningful response taking into 
account time constraints, degree of flexib ility and relevant control mechanisms.  
Furthermore, visibility an d reporting activities are systematically foreseen 
(regardless if the implementing partner is another international organisation, or if 
activities are directly financed and fo llowed up by the Commission). These 
activities include inter alia adequate pres s coverage during the contract signing 
ceremonies, notice boards placed on rehabilitated infrastructure, pamphlets, 
EN 97   EN internet, etc. As a general rule, a non negligible percentage of the overall 
programmes' budget has to be dedi cated to visibility activities. 
148. The European Parliament calls on the Co mmission to review its list of NGOs in 
order to exclude non bona fide NGOs, and to lay down procurement policies that 
prevent misappropriation of donated funds by such NGOs.  (§ 260)  
Commission's response:  
The requested action has been taken. Fo r Humanitarian actions, the Commission 
implemented beginning of 2008 a new Fram ework Partnership Agreement (FPA). 
The signature of this FPA is a condition sine-qua-non before the NGO can enter 
into a grant agreement with the Commission. To that effect, the NGO (whose 
headquarter is located on the European territory) has to evidence that it has 
sufficient administrative and financial capacities. Thes e capacities are analysed 
first before FPA signature and then con tinuously re-assessed. In addition, the FPA 
defines, inter alia, rigorous rules on procurement procedures and incorporate 
mechanisms of suspension and excl usion if these are not respected. 
149. The European Parliament calls on the Co mmission to give Union aid a sufficiently 
high profile without, in so doing, jeopard ising overall efficiency and equity 
objectives.  (§ 261)  
Commission's response:  
The Commission incorporates visibility  provisions in its contracts with 
implementing partners including intern ational organisations. The Commission 
revised in 2008 the "Guidelines for the Communication and Visibility of EU 
External Action" in order to enhance these aspects 
150. Expects the Commission not only to accept the ECA's recommendations but also to 
indicate the earliest date for their implementation.  (§ 263)  
Commission's response:  
The Commission agrees with the ECA recommendations. The Commission has 
already adopted or plans to adopt me asures in relation to the Court's 
recommendations by the end of 2009. 
151. Considers, moreover, that in connection with  humanitarian aid it is essential for the 
Commission to assert the cr iteria governing aid effectiven ess as enshrined in the 
Paris Declaration on Aid Effectiveness.  (§ 264)  
Commission's response:  
The requested action has been taken. The European Consensus on Humanitarian 
Aid, signed by the Presidents of the Eu ropean Parliament, the Council and the 
Commission in December 2007, sets out in  chapter 3 a "Common Framework to 
Deliver EU Humanitarian Aid" with a view to improve "Coordination, Coherence 
and Complementarity", to "Providing adequ ate and effective aid", and to ensure " 
Quality, effectiveness and accountability". In concrete terms, this means - inter 
EN 98   EN alia - a commitment to international coordination mechanisms and stronger EU 
coordination. The Consensus is quite concrete on the specific areas of 
implementation where progress can be made: throughout 2008, the Commission 
has begun with "real time sharing of in formation on situation assessments and 
response intentions", a enhanced "policy- level exchange on aid and intervention 
strategies" both in the context of the newly created Council Working Group on 
Humanitarian Aid and Food Aid as well as the Good Humanitarian Donorship 
Initiative. 
The Working Group, as well as on the gro und coordination, serve to ensure that 
there are no overlaps of ai d of different donors. In addi tion, the Commission's aid 
is, with the exception of a reserve for su dden onset disasters, fully programmed at 
the beginning of each budget year. This programme is always presented to the 
responsible EP Committee (CODEV) and the Council. Furthermore, the 
Commission also ensures - in line with th e Consensus - that it draws on "local and 
regional resources and procurements". 
In sum, the EC humanitarian aid follo ws the Good Humanitarian Donorship 
principles, many of which relate to aid e ffectiveness as well as the elements of the 
Paris Declaration which can be used an d promoted in a humanitarian context. 
In addition to above description, assuran ce on aid effectiveness is complemented 
by the performance of policy evaluations and the development of a set of system 
indicators. 
152. The European Parliament calls on the Comm ission to set a realistic and firm deadline 
for funds to be made available, in orde r to encourage the recipient countries to 
implement the agreed proj ects in a timely manner.  (§ 265)  
Commission's response:  
When providing co-financing, the Commission requires a clear and realistic 
development or rehabilitation strategy together with a financing plan. All the 
Commission's Tsunami funds (202 million euros) were committed by the end of 
2006. 
153. The European Parliament considers that , in the event of natural disasters, 
humanitarian aid should be provided with no political strings attached; takes the view 
that the Commission should nonetheless requi re recipient count ries to ensure: 
 (a) unrestricted acc ess to victims;  
 (b) that the assistance is not subject to ta xation, customs duty or any other form of 
fiscal burden; 
 (c) that there will be no delay in granting, and no re fusal to grant, visas to 
international staff working for relevant aid agencies;  
 (d) that beneficiaries will not be requir ed to pay for the donated goods and services 
(or that all such revenue will be channelled into reconstruction operations); 
EN 99   EN  Calls on the Commission to consider suspending aid should any of the above 
principles be violated.  (§§ 266-267)  
Commission's response:  
The Commission fully agrees with all point s and the requested action has been 
taken: its humanitarian aid to third countries - be it for the consequences of 
natural disasters or complex emergencies - is based on assessed need and is never 
offered with political conditionality at tached. Where access is limited, the 
Commission vigorously advocates for access to the disaster victims - recent 
examples include Commissioner Michel's missions and public in terventions in the 
wake of Cyclone Nargis and during the recent conflict in the Middle East. In the 
same context, the Commission has strongly demanded access for international aid 
personnel. In principle, the Commission's humanitarian aid is provided free of 
charge with the exception of specific programmes such as "work for aid" that have 
the double effect of providing local empl oyment, reconstruction and injection of 
needed investment in a given area. Con cerning taxes, tariffs or other fiscal 
measures, the Commission fully supports the international initiative for an 
"International Disaster Response Law" that would tackle these issues at national 
level. 
However, the Commission does not consider  suspending aid, should any of the 
mentioned principles be violated. Indee d, Commission is of the view that its 
humanitarian aid should serve the victims of disasters wherever they are. In the 
Commission's experience, an insistence on further access to victims while 
providing aid where such access is already  provided is more effective that the 
threat of suspending all humanitarian aid because of access difficulties. This 
approach was effective in the instance of  cyclone Nargis where international 
prodding led the Burmese authorities to pr ovide increasing access after an initial 
refusal to do so. As a matter of fact, in most complex emergencies, access 
difficulties occur frequently, but can usually be overcome. 
EN 100   EN Special Report No 7/2008 on Intelligent Energy 2003-2006 
154. Take into account and reduce in line with the principles of better regulation the costs 
borne by beneficiaries in pr eparing proposals and reporting.  (§ 269)  
Commission's response:  
A series of measures have been put in  place during the past two years (2007 - 
2008) aiming to reduce the co sts borne by beneficiaries.  Based on the experience 
with the first IEE programme, the fund ing for beneficiaries in the IEE II 
programme (2007-2013) was increased to 75% (compared to 50% under IEE I) 
and a standard flat rate of 60% was introduced for the indirect costs of all 
beneficiaries, thereby reducing consider ably the costs of proposal preparation and 
financial reporting. At the same time, th e number of contract amendments is 
reduced by approximately 50% by removing the need for EACI to authorise budget 
shifts below a certain value. It has b een concluded that these simplifications 
contributed to the highest number of applications ever received in the 2007 Call 
(423 proposals), with nearly 50% newcomers.  Fewer priority areas were opened in 
the Call 2008, thereby increasing the focus,  and this Call received 342 proposals, 
which is also a very good response. In the second year of the IEE II programme 
(2008), an electronic submission system (adapted from EPSS) was provided, which 
speeds up the evaluation process and redu ces the burden of proposers, and the 
guides for proposers include enhanced guidance on performance / impact 
indicators. Furthermore, the effort needed  to review previously supported projects, 
when preparing proposals, has been reduced by the launching of a new projects 
database, which went online in mid 2008. 
The time to contract was re duced in 2008 when, for the fi rst time in IEE, proposers 
were notified of the evaluation results and all negotiations were started in the same 
year as the Call was published. Also he lping the beneficiaries, the EACI has 
maintained average payme nt times of 36 days. 
A joint DG TREN / EACI working group, ensu res that the experience of managing 
IEE projects is fed back each year into  the next annual work programme. This 
group has developed the improvements and simplifications cited above, and will 
continue for the rest of the programme. 
155. Actively pursue its policy of giving priority to the creati on of energy agencies in the 
new Member States in order to arrive at a well-balanced distribution across the whole 
Union.  (§ 271)  
Commission's response:  
The Commission confirms its commitment to actively involve new Member States 
in the programme. In order to measure the overall effectiv eness of the IEE-II 
programme, the Commission set, among othe rs, specific targets for more active 
involvement of beneficiaries and a good proportion of new beneficiaries applying 
to and succeeding from New Member States. Regarding the specific case of energy 
agencies, the creation of agencies depends mainly on the availability of local and 
regional structures for co-financing an d their committing to their agency in the 
EN 101   EN long-run. Acknowledging this diversity, the Commission encouraged in particular 
new MS to take up the concept of ener gy agencies (e.g. call 2004 gave priority to 
the creations of agencies in new MS). 
This helped to build momentum and influe nce the decision making process at local 
level. As a result, after a sl ow start, 16 new energy agencies were established in the 
new Member States from 2005 to 2007 and efforts are continuing. A tender for a 
new study of local and regional energy agencies was launched in 2009, and this is 
expected to provide up-dated information on  the evolving roles of such agencies, as 
well as on the related needs of the pu blic authorities which establish them. 
EN 102   EN Special Report No 8/2008 - Is cross-compliance an effective policy? 
156. Simplify the cross-compliance framework by li miting it to the prin cipal elements of 
farming activities where improvements are sought and by specifying the expected 
results, requirements and standards.  (§ 273)  
Commission's response:  
The Commission has simplified cross comp liance in the framework of the Health 
Check in particular regarding: 
• The better focusing of the framework to farming activity: some provisions 
not relevant to cross compliance have been withdrawn, some other relevant 
provisions have been added; 
• The simplification of the management of cross compliance: changes already 
decided for the first CAP Pillar have b een extended to the second Pillar. 
• The Commission has launched discussion s with Member States on further 
possibilities of simplifying the man agement rules of cross-compliance. 
In addition, the Commission has taken the initiative to set up an expert working 
group with the aim of ensuring that the cross-compliance obligations at farm level 
are clear. 
However, the Commission will not "specify the expected results, requirements and 
standards" because of the great environm ental and agricultural diversity between 
different parts of Europe, which means that  it does not make sense to set detailed 
standards centrally and since this would mean adding a layer of management and 
control resulting in doubling the administrative burden. 
157. Draw a clear distinction between cross- compliance and agri-envi ronment; notes that 
elements of rural development policy, such  as the approval of standards by the 
Commission and the obligation to lay down veri fiable standards, should also apply to 
cross-compliance.  (§ 274)  
Commission's response:  
Cross compliance represents the demarcat ion line between penalising farmers for 
the non-compliance with mandatory requirem ents (in line with the "polluter pays 
principle") and rewarding farmers for th e voluntary provision of environmental 
benefits through agri-environmental or animal welfare commitments. Thus, cross-
compliance and agri-environment or animal welfare measures complement each 
other without any possible overlap. 
The Commission has no intention to appro ve standards or to lay down verifiable 
norms. This would only add complex ity and administra tive burden. The 
Commission's reply in the Court's Special report explains this clearly (paragraph 
87, second bullet, page 60): 
EN 103   EN "A significant degree of flexibility must be  offered to Member States to allow them 
to adapt the obligations to the specific ch aracteristics of the areas concerned. The 
Commission does not intend to approve na tional standards within the cross 
compliance system. The respect by Member States of a minimum level-playing field 
is however ensured by the Commission through its mon itoring and audit activity. 
Moreover, the rural development policy is based on programming periods and 
national programmes are approved, not in dividual standards. Therefore the 
comparison with cross compliance is not necessarily relevant. The principle that 
Member States shall define verifiabl e standards is already underlying the 
legislation on cross compliance." 
158. Implement a sound monitoring system to measure performance by defining relevant 
indicators and baseline levels; Member St ates are invited to submit complete and 
reliable data, which should be subject to closer analysis by the Commission.  (§ 276)  
Commission's response:  
The Commission is taking the requested action. The implementation of a good 
management system by Member States is checked during the audits carried out in 
Member States and any failure found with th is obligation is subject to clearance of 
account procedure. 
The Commission will pursue its efforts to he lp the Member States implementing an 
efficient control and sanction system. The Council issued a conclusion in this 
respect in the Health Check  and the Commission is co mmitted to continue the 
discussions with this view. Expert group meetings are envisaged in 2009 on 
simplification to call for contributions from Member States on aspects not covered 
by the Health Check. This will also give a further opportunity to Member States to 
present and therefore compare particular aspects of their sanctioning systems. 
The Commission has already developed data and indicators for cross compliance, 
which show that the system is applied, in  particular as regards the control and 
reduction system. However the Commission has indicated that it is currently 
examining the monitoring. 
It is clear that the validity  of the data could be further reinforced, as well as their 
timeliness. Further work w ill be carried out in the context of a reinforced 
monitoring system. 
159. Present proposals of relevant indicators and baseline levels at the latest in the context 
of the budget review and the next refo rm of the common ag ricultural policy.  (§ 277)  
Commission's response:  
The Commission takes note of the request to present proposals up until the timing 
of the budget review but would like to remind the Parliament that legal proposals 
will not be part of the budget review. 
EN 104   EN Special Report No 9/2008 - The effectiveness of EU support in the area of freedom, 
security and justice for Belarus, Moldova and Ukraine 
160. The European Parliament urges the Commi ssion to carry out a full analysis of the 
reasons for the shortcomings and lack of re sults in some of the projects in Belarus, 
Moldova and Ukraine, and to improve th e planning, management and control of 
Union funds in these countries.  (§ 279)  
Commission's response:  
The Commission has taken stock of th e lessons learnt under TACIS while 
developing the ENPI. Furthermore, th e full application of deconcentration 
measures and a streamlining of instrume nts at programming stage have already 
shown clear indications of improvements in planning, managing and control of 
EU funds spending in these countries. A stat e of play report wi ll be submitted to 
Parliament in September. 
161. The European Parliament insists that the Commission continue to target Union funds 
to the specific priorities of Moldova, Belarus and Ukraine, bearing in mind the 
progress made in previous projects.  (§ 280)  
Commission's response:  
The Commission acknowledges the importance of 'lessons learnt' in the design of 
new targeted projects – esp ecially in sensitive areas su ch as JLS. The Commission 
underlines that it already includes at the level of a project's preparation relevant 
information regarding lessons learnt. The Identification Fiche for project 
approach is used for screening by the Quality Support Group, and then is 
translated into an Action Fiche which is part of the financing decision containing 
a section regarding "lessons learnt" an d how these have been taken on board 
(section 2.2). A state of play report will be submitted to Parliament in September. 
162. The European Parliament calls on the Commission to make EU funding 
procedures more flexible, which would allow adjustment of project dossiers, 
benchmarks and goals in order to reflect  changes in the economic and political 
situation in the countries concerned.  (§ 281)  
Commission's response:  
While the ENPI does represent a more flex ible instrument than its predecessor, 
there is still a clear case for a division  of labour between funding instruments, 
according to the advantage s and specificities of ea ch. The focus of ENPI 
programmes in Ukraine and Moldova is, for example, on large, sector-wide 
support programmes, rather than smaller proj ects. This is in line with the need to 
improve the focus and strategic impact of ENPI funding. Other instruments 
however, such as the Thematic Progra mme for Asylum and Migration have the 
ability to mobilise smaller pools of funds, in a more rapid and flexible way than 
large-scale sector reform programmes so as  to respond quickly to swift changes in 
the economic and political situation in the countries. A state of play report will be 
submitted to Parliament in September. 
EN 105   EN 163. The European Parliament requests that th e Commission ensure the sustainability of 
Union-financed projects by clearly defini ng the commitments made by the recipient 
government at the end of each project.  (§ 282)  
Commission's response:  
The Commission agrees that the recipien t country should clearly express its 
interests and wishes to underlines that these expressions are set out in the 
Partnership and Cooperation Agreements and in the ENP action plans. They are 
further taken into consideration at the project's identification stage following 
priorities identified in the Country Stra tegy Paper and the National Indicative 
Programmes in line with the ENP Action plans. National participation is 
envisaged and implemented according to the nature of the project. A state of play 
report will be submitted to Parliament in September. 
164. The European Parliament deplores the fa ct that the effectiv eness of Community 
funding was insufficient in cases where, al though there were shortcomings in project 
management, grants were awarded to the same contractors for new projects; thus 
urges the Commission to define clear criteri a for selecting contactors and to avoid 
repetition of the unsatisfactory management of Community funds.  (§ 283)  
Commission's response:  
The profile and expertise of each expert  remain the first critical factor for 
performance. The Commission reminds that the selection criteria in call 
procedures are pre-established in an obj ectively verifiable and transparent way and 
are adapted to the specific needs of each individual call. Proposed experts can be 
considered only after they sign and sub mit their own availability and exclusivity 
statement. 
AIDCO will study the possibility of sett ing up a data base recording performance 
of experts and contractors as well as the una vailability of experts at the start of the 
contract. However the possibility to exclud e firms from future tenders is limited to 
the cases foreseen in the Financial Regulation. 
165. The European Parliament recomme nds that the Commission improve its 
communication with the governments of Ukra ine, Moldova and Be larus, and that it 
take appropriate steps to encourage and he lp recipient countries to establish and 
exercise effective donor coordination.  (§ 284)  
Commission's response:  
Although the recent creation of the Coor dination Bureau for European and Euro-
Atlantic Integration is a step forward towards coordination of European Union 
cooperation, it does not include, for the ti me being, the coordination of European 
Union (European Communities and Europe an Union Member States) assistance. 
The European Union needs to encourage th e government of Ukraine to extend the 
mandate of the Coordination Bureau for European and Euro-Atlantic Integration 
and reform the current inef ficient and fragmented coordination system. The need 
for a reform is strongly supported by the Deputy Prime Minister, who is suggesting 
setting up a single agency with strong coordinating powers which would take over 
EN 106   EN all responsibilities related to external a ssistance. The level of the coordinating unit 
would be raised from the Ministry of Ec onomy to the Cabinet of Ministers; the 
Vice Prime Minister would become the National Coordinator of External 
Assistance. 
As regards the Republic of Moldova, th e Government established an Office for 
Coordination of the European Integration in April 2008, following a dialogue with 
the Commission. This office is also in charge of coordinating overall external 
assistance flowing into Moldova. Furthermore, a Commission for European 
Integration chaired by the President of th e Republic of Moldova was set-up in May 
2008 to coordinate the dialogue between the government and the European 
Institutions and to oversee the implemen tation of the European Union-Moldova 
Action Plan. The Office for Coordination of the European Integration had been 
fulfilling the tasks of the Secretariat to  the Commission until February 2009, when 
its responsibility was transferred to the Ministry for Foreign Affairs and European 
Integration. This new set-up should go along with an intensification of 
information exchange with the Office in order to maintain an adequate level of 
coordination between progress on po licy dialogue and assistance planning 
activities. 
With regards to Belarus, the European Co mmission is at the forefront of the donor 
coordination efforts through the quarterl y informal donor coordination meetings 
chaired by RELEX in Brussels. Its purpose is to coordinate the various initiatives 
of main European Union Member St ate donor and international donor 
organizations to which Belarus is not participating. Furthermore, the European 
Commission Delegation in Minsk, with the support of the National coordination 
Unit regularly hosts donor meetings w ith Belarusian counterparts from the 
Ministry of Economy and the Mi nistry of Foreign Affairs. 
166. The European Parliament encourages the Commission to focus more on the issue of 
effective prosecution in the fight against or ganised crime, and to explore possibilities 
for promoting greater public involvemen t in anti-corruption policy by supporting 
civil society organisations in issues re lating to the judiciary and good governance.  (§ 
285) 
Commission's response:  
More effective prosecution and system atic information sharing between law 
enforcement bodies has to be ensured in the frame of the joint European 
Communities - Council of Europe project:  Ukraine's International Cooperation in 
Criminal Matters (UPIC) since 2006 and currently ongoing. 
Clearly, the ultimate responsi bility for achievements in this very sensitive area like 
prosecution and improved inter-services c ooperation for criminal investigations 
lies with the national authorities due to matters relating to national sovereignty 
including security. 
Unfortunately, the legislative process wa s in Ukraine hampered by frequent 
changes in the Government after the Orange  Revolution, and ge nerally legislative 
processes are always slow in the region . Joint sessions with the relevant law 
enforcement bodies were held during th e lifetime of the EC-CoE project (2006-
EN 107   EN 2008) in order to encourage information sharing and promote good practice on 
effective prosecution. 
The matter of effective prosecution in  the fight against organised crime was 
further addressed within the TACIS programme "Interpol-assisted International 
Cooperation in Criminal Matters by Ukra inian Law-enforcement" (ended in 
December 2008) which aimed at improving capacities of the Ukrainian law-
enforcement agencies to effectively exch ange criminal information through the I-
24/7 worldwide Interpol network. The ongoi ng European Union Border Assistance 
Mission continues to contribute to e nhancing the overall border and customs 
management capacities and the abilities of  Moldova and Ukraine to fight against 
cross-border and organised crime and to approximate the standards of the border 
and law enforcement authorities to those of the EU. 
Particularly under the framework of the ongoing Project against corruption 
(UPAC), regular round tables with Non State Actors will continue to be held. 
Moreover, in the frame of the Mid Term Review process of the Country Strategy 
Paper and National Indicative Programme, Non State Actors will be widely 
consulted via the web and furt her meetings will be held. 
EN 108   EN Special Report No 11/2008 - The management  of the European Union support for the 
public storage of cereals 
167. Take into account the geogra phical location of the stores a nd in particular the quality 
of the cereal lots when it sets the minimum disposal price. 
 Make the costs of activities not directly re lated to the intervention storage of cereals 
more transparent; therefore suggests that th e subsidy element of programmes, such as 
support for the most deprived persons or the bioethanol indu stry, be directly 
allocated to the activities concerned. 
 Explore the idea of constituting a Community  strategic reserve of cereals should a 
food shortage occur at Community level.  (§ 286, 287 & 291)  
Commission's response:  
The Commission will not be taking the re quested action. Under the current system 
the resale price of each batch is deter mined without taking into consideration 
either its quality or its geographical lo cation. Doing otherwise would make the 
system very difficult to manage in prac tice. The Commission fi nds that the current 
system has the advantage of being straig htforward, objective and more efficient. 
An ad-hoc approach can and has been followed on several occasions for the last 
remaining batches at the end of each exercise. 
As regards the support for the most deprived persons, the Commission services 
consider that the budgetary process followed  ensures that the cost s of this activity 
are transparent. The cereals outtakes are funded through budget item 05020401. 
Furthermore, the public storage account s clearly identify separately all stock 
movements involving the support for the most deprived person's scheme. The 
combined examination of these separat e accounts leads to the transparent 
presentation of the financial cost of this scheme to the EU budget both from the 
budgetary and from the stock accounting viewpoints. 
The tender for the resale of rye in view of its processing into ethanol was a pilot 
project for a limited quantity of grain. The accounts for this one-off tender are 
included in the budget line for sales of in tervention rye, together with the other 
three tenders opened the same marketing year. The pilot project for bio-ethanol 
represented less than 11 % of  the quantities of interventio n rye put for sale during 
that marketing year. It was therefore not necessary to create a specific budget line. 
In addition, this tender has not been re opened in subsequent years and the pilot 
project has not been repeated ever since. 
The Commission is of the view that strate gic reserves would not be an effective 
instrument for managing shortages in the cereal market and therefore does not 
consider the possibility of constituting su ch reserves. The experience of the last 
years shows that in a situation of high prices the production of cereals in the 
Community can increase rapidly. Moreo ver, the recent Council decisions on the 
Health Check have confirmed this line and turned public intervention of cereals 
into a safety-net mechanism for situations of low prices. 
EN 109   EN 168. Evaluate the costs of controls in the field of public storage operati ons of cereals; calls 
on the Commission to create more incentives for Member States to reduce the storage and capital costs of their interven tions and to optimise the time of sale of 
their stocks.  (§ 288)  
Commission's response:
 
The Commission is working on the most appropriate method to follow in the cases 
where certain Member States do not declare their interest costs, in the framework 
of the Commission's calculation of the spec ific interest rate to be used for the 
reimbursement of the financing co sts for public storage operations. 
However, the Commission will not act on the first part of the request. The 
Communication on "Tolerable risk of e rror" that the Commission adopted in 
December 2008 already covers the costs of control for a variety of measures. In 
this context, the Commission is of the opini on that a separate exercise for the costs 
of control for interv ention storage of cereals is not appropriate. 
169. Strengthen its review of the costs notified by the paying agenci es by systematically 
following up on any unusual data or trends ; on-the-spot inspections should include 
checks of the data used; the Commission should review its standard costs for operations without movement to ensure that they do not exceed actual costs.  (§ 289)  
Commission's response:
 
The Commission will be taking part of th e requested action, concerning standard 
costs for operations without movemen t: The Commission is examining the 
situation and it will decide on the most  appropriate method to follow for the 
calculation of entry and removal stan dard costs without stock movement. The 
review will be carried out once the public storage situation and the information 
received from Member States allows it. 
The Commission currently carries out a thor ough analysis of th e cost information 
received from the Member States concerned. On the basis of the Commission's risk 
analysis and the limited quantities in st ore, on-the-spot inspections of this 
information cannot be justifie d at this point in time. 
EN 110   EN European Development Funds 
170. The European Parliament invites the Co mmission - when "fine-tuning" its control 
strategy (points 1 to 5 of the Annual Repor t on the EDFs) - to identify the point 
where lack of results and the costs of control call for a policy change. 
 Notes that the Commission considers that "(g)iven the financial and human resources 
available to it, (...) it has set up control systems which provide reasonable assurance" 
(point 53 of the Annual Report on the EDFs);  
 Regards the Commission's answers as unsatisfactory in that it seems reluctant to 
review the arrangements it has put in place,  and invites the Commission to give more 
precise information as to the notion of "reas onable assurance" a nd, in particular, as 
regards the actual cost/benefit ratio of contro ls and the actual error rate, as well as a 
breakdown indicating which additional human and financial resources are necessary 
to improve the control system in order to al low the Court to give the mark "effective" 
as the overall assessment. 
 Notes with satisfaction the Court's recognition of Europe Aid's efforts to develop a 
control strategy; takes the view that an ef ficient control strategy aims at preventing 
errors ex-ante and not primarily at recove ring undue paid funds ex-post; invites the 
Commission to continue devel oping its control strategy in the light of this approach, 
which is a priority for the discharge authority.  (EDF §§ 2, 23, 24 and 65)  
Commission's response:  
Ex ante controls constitute a major part of  EuropeAid's current control strategy, so 
that errors detected during such controls  can be corrected before payments are 
approved. These ex ante checks, which ar e obligatory on all transactions, are 
modulated in relation to the characteri stics of each activity. They include, 
whenever needed and appropriate, audits or specific technica l certification by 
independent experts, in relation to the type  of contract/operator, resulting in a high 
intensity of checks at the level of the implementing organisations, notably before 
final payments. 
EuropeAid is willing to continue in th e light of this approach and to pursue its 
efforts in order to further improve the management of implementing organisations. 
The Commission will submit a report to Parliament and Council based on the 
findings of the tolerable ri sk/cost-effectiveness studies for external action and a 
review of the AIDCO cont rol strategy will follow. 
171. Takes the view that the implementation strategy for the Tenth EDF (EUR 21 966 000 
000 for the period from 2008 to 2013) shoul d focus on areas of crucial importance 
for ensuring sustainable development; enco urages the Commission to prioritise and 
avoid proliferation; 
 Believes that the Commission, in an effo rt to prioritise and concentrate its 
development activities, could look for opportunities to increase assistance to low-
income countries.  (EDF §§ 3-4)  
EN 111   EN Commission's response:  
The 10th EDF programming was based on th e Joint Statement by the Council, the 
European Parliament and the Commission  on European Development Policy (the 
'European Consensus') (OJ C(2006)46 of  24.2.2006, p. 1) which identifies nine 
core areas of intervention and asked fo r concentration in two focal areas plus 
general budget support. 
The 10th EDF Mid-Term Review (2009-2010) guidelines ask for more joint 
programming, leading to further concentra tion and division of labour, based on 
the Council conclusions of 15.5.2007 which in clude the adoption the EU Code of 
Conduct on complementarity and division of  labour. This code of conduct suggests 
concentrating on maximum three sect ors plus general budget support. 
46 out of 77 ACP countries eligible to EDF funding, representing 94% of the ACP 
population are Low Income Countries. The 10th EDF aid allocation model 
(Commission decision C(2007)3617 of 1.8.2007) gives an important weighting to 
needs and vulnerability, with the LICs bein g allocated more than 90% of the initial 
country allocations for programmed aid. 
172. Welcomes the commitment of all availa ble funding for the Ninth EDF in 2007; calls 
on the Commission to formulate recommendations applicable for the non-committed parts of the Eighth EDF; st resses however that speedy commitment of funds should 
not be carried out to the detrim ent of the quality of projects.  (EDF § 7)  
Commission's response:
 
Almost all the funds available under th e 9th EDF and all the funds available 
(decommitted) from previous EDFs (inclu ding the 8th) were committed by end 
2007. Furthermore, in accordance with ar ticle 1(4) of the 10th EDF internal 
agreement, funds decommitted subsequently from the old EDFs can no longer be 
committed. As indicated in declaration N° 2 concerning  the multiannual financial 
framework for the period 2008 to 2013, agree d at the 31st sess ion of the ACP-EC 
Council of Ministers Port Moresby, Papua New Guinea, 1 and 2 June 2006: 
"based on the performance review in 2010 and a proposal by the Commission, the 
Council of the European Union will cons ider a decision by unanimity on the 
transfer of any funds decommitted from ACP projects funded out of the 9th and 
previous EDFs into the reserves of the 10th EDF." The Commis sion will therefore 
analyse the possibility to prepare a pr oposal in 2010 on the use of decommitted 
funds from the 7th, 8th and 9th EDFs on the basis of the results of the 10th EDF 
mid-term review. 
173. Regrets however that the Commission's follow up to observations made by the Court 
in a number of cases is inadequate; stresses that the Commission's action on the Court's recommendations is an  important element of acc ountability for the discharge 
authority; welcomes the fact that the Commission "will provide  more detailed 
information in the future" (point 13 of the Annual Report on the EDFs).  (EDF § 11)  
EN 112   EN Commission's response:  
The Court's observation refers primarily  to the adequacy of the information 
supplied by the Commission on actions taken or planned as a follow-up to 
observations by the Court. On the substa nce, the Commission always analyses the 
Court’s observations carefully to ensure that they are implemented appropriately.  
The nature of some observations means that  it is sometimes difficult to be precise 
in terms of the schedule for implementation.  Nevertheless, the Commission does 
follow up observations and most of them are implemented according to a specific 
schedule and with a precise desc ription of the measures taken.  The backbone 
strategy, CRIS AUDIT, CRIS FED, the term s of reference for the verification of 
supporting documents for programme estimates and th e methodology for 
verification missions are all examples of recommendations which have either been 
implemented or are currently being finalised. However care will be taken to 
provide more detailed information in th e summary of the Commission's follow-up 
to observations by the Court in the future. 
174. As regards the reliability of the account s, notes the Court's recurrent remark 
concerning the validity of the Commission's st atistical approach used to estimate the 
provision for costs incurred in the reporti ng period for which no invoices have been 
received at year-end; further notes that this provision amounts to EUR 2 087 000 000 
or 83% of total liabilities ( point 17 of the Annual Repor t on the EDFs); invites the 
Commission to continue to fine -tune and improve its approach.  (EDF § 18)  
Commission's response:  
The Commission instructed an independent auditor to carry out a study to check 
whether the method used is appropriate.  The study’s findings show that the 
assumptions underpinning mathematical estimates of invoices to be received are 
correct in the vast majority of cases.  However, the study recommends a different 
approach in a limited number of cases.  The Court has been informed of the 
findings and the Commission has undertaken to implement the recommendations 
for the 2009 accounting year. 
175. Notes the difference of opinion between the Commission and the Court as regards 
the moment when financing agreements should be "drawn up" and "signed" (point 19 of the Annual Report on the EDFs); regret s the unclear message to the discharge 
authority, and invites the Commission to prov ide clarification so that all parties - 
Commission and ACP States - have th e same understanding of "drawn up".  (EDF § 
19) 
Commission's response:
 
Once financing proposals have been decided on by the Commission, the financing 
agreement is drawn up and signed by the Commission (within 60 days) and then it 
is concluded i.e. given the second signat ure by the beneficiary (by the end of the 
following calendar year). Accordingly, a distinction should be made between 
“drawing up” (see Article 17(2) of Annex 4 to the Cotonou Agreement), which 
means “preparing” / “drafting” the proposed agreement (which is supposed to be 
done “within 60 days of the decision” of the Commission) and the second 
signature, which means the “conclusion” of the agreement.  The deadline by which 
EN 113   EN the two parties must sign a financing agreement is set at 31 December of year N+1 
(Article 54(2) of the Financial Regulation of the 9th EDF and Article 78(1) of the 
Financial Regulation of the 10th EDF).  As a matter of diligent practice, the 
Commission does not only draw up (prepare / draft) but also sign virtually all 
financing agreements within 60 days of its decision.  The beneficiary then has until 
31 December of year N+1 to sign. 
176. Notes that the Court, in the course of checking transactions, was unable to obtain the 
relevant documentation from United Nations bodies in the case of two payments (out 
of a sample of eleven); calls on the Comm ission, therefore, to ensure full compliance 
with the financial and admini strative framework agreement.  (EDF § 20)  
Commission's response:  
The Commission endeavours to ensure full compliance with the FAFA and has 
drawn the attention of the UN representa tion in Brussels to these two cases. 
177. Notes that the Court highlights the inad equacy of the contro ls carried out by 
supervisors or auditors, which indicates  the weaknesses in the supervisory and 
control systems; calls on the Commission, ther efore, to tighten up its controls and, in 
particular, to introduce a system of review of external audit re ports to check their 
quality.  (EDF § 25)  
Commission's response:  
The Commission has carried out quality reviews of its EDF external audit reports 
since 2005. The follow-up to the main findin gs has led to significant improvements 
in the use of terms of reference for aud its and the quality of audit reports. The 
quality review system is a nnually reviewed and it was significantly improved in 
2008 and 2009 following lessons learned. 
178. As regards budget support, invites the Commission to pr ovide the evidence on which 
it has based its conclusions and to present it in such a way that it is clear how much 
progress has been made (from where to wh ere) and why this amount of progress was 
considered "sufficient"; 
 Is worried by the Court's findings, but ev en more by the Commission's replies, which 
show that the Commission is very reluctant to share the information on which its decisions on budget support are based; 
 Regrets that it does not have sufficient useful, co mprehensive and reliable 
information in order to carry out an e ffective oversight of budget support results; 
 Invites the Commission to draw up an annual report on the use of budget support - 
and its Committee on Budgetary Control to draw up an own initiative report on this 
annual report - including useful, comprehens ive, reliable, analytical and evaluative, 
and not only descriptive, information on: 
 − planned and disbursed budget support 
 − achievement of expected results as  set out by donor objectives and country 
strategies 
EN 114   EN  − existence and quality of  complementary conditions 
 − the effectiveness of the dialogue , the state of donor harmonisation, the 
complementary capacity building which has taken place and the effect of that 
capacity building 
 − achievement of improved country systems 
 − accountability institutions, public finance management institutions, monitoring and 
evaluation institutions 
 − the amount and rate of  irregular expenditure 
 − an analysis of the typology of irregular ities (systemic and n on-systemic) brought to 
light by controls and audits 
 − remedial action taken; 
 Further invites the Commission to identif y, with the utmost rigour, countries or 
issues in budgetary support implementation where particular parliamentary attention 
could prove useful in im proving donor accountability; 
 Also invites the Commission to intr oduce annual monitori ng of this risk; 
 Takes the view that the higher degree of  discretion in "dynamic approach" decisions 
on budget support must be counterbalanced by an equally high degree of transparency; invites, therefore, the Comm ission to make available to its Committee 
on Budgetary Control and its Committee on Development the information on which it bases its assessments; 
 Expects in particular to receive e xplicit information on the Commission's risk 
assessments and analyses of government systems in developi ng countries, its 
judgement of the significance of syst em weaknesses as regards potential 
inefficiencies and wastage of aid and estimates, quantified to the extent possible, of these factors, as well as information on meas ures taken, or to be taken in future, in 
order to mitigate the identified risks; 
 Welcomes the Commission's acceptance of the Court's observations, as well as the 
Commission's intentions, and looks forward to  being informed of the detailed design 
and implementation of this "enhanced approach".  (EDF §§ 31, 36, 40, 42-44, 47, 48, 
52, 66 and 67)  
Commission's response:
 
The Commission fully cooperated with the Court of Auditors in providing the 
information and analysis upon which it bases its budget support decisions. The 
issues raised in the Court's Annual Report 2007 on the EDF have been addressed 
in detail in Commissioner Michel's letter to the Member of the Court dated 9th 
January 2009, with copy to the European Parliament. This was followed up in 
April 2009 by a detailed presen tation by the Directors General for EuropeAid and 
Development to the Members of the Court on the Commission's approach to these 
issues. 
EN 115   EN At the same time, strenuous efforts are being made to improve the analysis of 
eligibility and enhance the clarity of Fi nancing Agreements and payment decisions 
for budget support programmes. The formulation of every budget support 
programme now includes detailed supplem entary documentation on each of the 
three eligibility criteria. The information relating to all budget support 
programmes approved in 2008 are presented in summarised form in the Annual 
Action Programmes of 2008 which are available on the EuropeAid public 
(Europa) website (see http://ec.euro pa.eu/europeaid/work/ap/aap/2008_en.htm). 
The Commission understands and accepts the demand for even greater 
transparency in the treatment of budget support. In this context, the Commission 
presented its indicative plans for a ll budget support disbursements in 2009 and 
2010 on a country-by-country basis to  the EDF Committee in March 2009. The 
Commission is nevertheless concerned to li mit the proliferation of reporting on the 
EDF (e.g. Annual Activity Reports for EuropeAid and DG Development, the 
European Development Funds Financial Management Report, the European 
Development Funds Financial Report and the Annual Report on the European 
Community's Development and Extern al Assistance Policies and their 
Implementation). The Commission therefor e proposes to provide more in depth 
coverage of budget support issues in fu ture annual reports on the 'European 
Community's Development and Extern al Assistance Policies and their 
Implementation'. This more in depth cover age of budget support issues will extend 
to information on results, analysis and a ssessment of risk and draw on available 
public finance management (PFM) diagnostics. 
In addition the Commission believes that evaluations provide a crucial tool for 
organisational learning and effective oversight. The Commission has participated 
in several OECD evaluations of budget support operations in or der to examine its 
contribution to achieving sustainable resu lts. The evaluations carried out in 2006 
in Burkina Faso, Malawi, Mozambique, Nicaragua, Rwanda, Uganda and 
Vietnam showed that with the provisio n of General Budget Support (GBS), "pro-
poor expenditures" increased in those respective countries. 
The Commission is actively supporting the involvement of natio nal parliaments in 
the review of budget support programme s. We have recently seen increased 
participation of parliaments in annual budget support review in Tanzania and 
Zambia. At the same time, the Commissi on is providing direct support to 
parliaments in a number of countries in or der to further strengthen accountability 
and transparency. 
179. Invites the Commissioner to re view these intentions until rhetoric has been replaced 
by reality and conclusive evidence, show ing the extent to which budget support has 
given better value for money than other aid instruments or has had an impact on 
income poverty is available.  (EDF § 50)  
Commission's response:  
The Commission is committed to an evide nce based approach in the development 
of budgetary support. In this perspective the Commission has spearheaded, in 
collaboration with Member States and other donors, the development of a 
comprehensive evaluation methodology whic h will seek to assess the contribution 
EN 116   EN of budget support to poverty reduction. Th is approach will be tested during the 
course of 2009. The objective is  to systematically conduc t joint evaluations of GBS 
and SBS programmes at country level. Pilot countries have been selected (Zambia 
and Niger) and first evaluations w ill be launched in 2009. The Commission 
understands that the Court of Auditors will also be carrying out a performance 
audit in 2009/10 on general budget su pport operations and l ook forward to its 
conclusions. 
180. Notes that NAOs (National Authorising O fficers) are obligatory in ACP States but 
do not exist in RELEX devel oping countries; invites the Commission to inform it of 
the advantages and disadvantages of the ED F approach and to assess best practices 
across ACP States in order to improve the control of EDF expenditure by NAO 
administrations; 
 Further notes that "the lack of capacity and resources within NAO administrations" is 
"regularly reported by delegations" (point  41 of the Annual Report on the EDFs) to 
EuropeAid's central services; invites the Co mmission to inform it of feedback given 
to delegations on this issue.  (EDF §§ 58 and 59)  
Commission's response:  
The NAO’s functions and responsibilities  exist “de jure” in accordance with 
Article 35 of Annex IV to the ACP-EU Partnership Agreement.  This has the 
advantage of making the national author ities more responsible for cooperation 
programmes.  However, the management capacity  of the NAO and his departments 
is often not sufficient to ensure full comp liance with the obligations resulting from 
Article 35. 
The Commission has adapted to this by  modulating the degree to which 
management is decentralised.  In practice, most financing is put in place by way of 
partially decentralised management (with ex-post controls by the Commission on 
all transactions over a given thre shold) or centralised management. 
EuropeAid is informed of the capacity of  the national authorities via delegations 
and follow-up missions.  Discussion with delegations on this subject takes place, for 
example, via the External Assistance Management Reports (EAMR), to which 
headquarters respond through regional seminars (with bilateral meetings to 
provide each delegation with a situatio n report on the cooperation programme), 
and as part of annual operational reviews. 
The Commission organises training for ad ministrations and has set up capacity 
building programmes for NAOs in a large number of countries.  Any new support 
proposals for NAOs are discussed with in EuropeAid’s Quality Support Group 
when the identification fiche and then the action fiche are processed.  Delegations 
are informed systematically of the QSG’ s conclusions and must take them into 
account when finalising projects.  Within that context, the new backbone strategy to 
reorganise technical cooperation and project implementation units is an important 
tool which provides guidance for th e setting-up of support for NAOs. 
181. Notes that, according to th e Court, the number of Commi ssion staff compared to the 
funds committed is decreasing, and that no si gnificant increase of staff is foreseen 
EN 117   EN despite the forecasted substantial incr ease of commitments under the 10th EDF 
(point 33 of the Annua l Report on the EDFs); 
 Fully agrees with the Court that there "is a risk that shortage or inadequate 
distribution of staff or unava ilability of specific skills a nd knowledge has an impact 
on the quality of the controls, verificati on and monitoring" (point 33 of the Annual 
Report on the EDFs); 
 Invites the Commission to explain how it envisages managing the tension - if not 
contradiction - between the need for addi tional human resources at delegations and 
its commitment" to maintain stable staffing once all enlargement-related personnel are integrated, with no requests for new posts for the period 2009-2013" and "to meet new staffing needs in key policy areas ex clusively through redeployment within and 
between departments" [Note: Report from  the Commission. Planning and optimising 
Commission human resources to serv e EU priorities(SEC(2007)0530), p. 3]; 
 Takes the view that additional human resources could be found by abolishing the 
split responsibility for development betw een RELEX and DEV; invites the current 
Commission to take the necessary steps with a view to facilitating this reorganisation 
in the new Commission; beli eves that the curr ent division of labour on development 
co-operation between DEV and RELEX does not allow the Commission to 
participate fully in nurturing international efforts to promote development coherence 
and aid effectiveness; further invites the Commission to ensure that development co-
operation is unambiguously dedicated to  the primary objective of poverty 
eradication; 
 Calls on the Commission to take the necessary measures to increase the number of 
staff allocated to the EDF's management and control structures in view of the 
anticipated increase in the volume of commitments under the Tenth EDF.  (EDF §§ 
60-64)  
Commission's response:
 
The Commission may, in addition to the st atutory staff (establishment plan posts) 
dedicated to the managing of the EDF,  and in accordance with the Internal 
Agreement of the EDF, resort to extern al personnel financed from the programme 
itself. This is not only true for the recr uitment of external personnel in delegation 
(as is the case for the general budget), but also – and this is new under the 10th 
EDF - for the recruitment of external pe rsonnel at Headquarte rs (see article 6, 
par.2, letter c) of the 10th  EDF Internal Agreement). 
According to the Draft Preliminary Bu dget for 2010, the external personnel in 
place at 1/04/2009 financed by the EDF am ounts to 275 contract agents (of which 
34 at headquarters) and 607 local agents. A reinforcement of some 74 FTE is 
foreseen for the period 2009-2014, whether in  delegations or at Headquarters.  
Moreover, the Commission's communication "Planning & Optimising 
Commission Human Resources to serve EU priorities" – SEC(2007)530 of 
24/04/2007) allows for possible additional ex ternal personnel for the management 
of deconcentrated external aid action in delegations and does not concern EDF 
resources, since they are extra-budgetary. External personnel is financed by the 
EN 118   EN assigned revenue from contribution to administrative support expenditure of the 
EDF linked to programming and implementation. 
According to the institutional balance set out by the Treaties, the Commission is 
responsible for the management of th e EU budget and the EDF. The staff 
allocation and responsibilities between Commission department s is therefore a 
question of internal organisation within  the Commission. In this sense, the 
Commission carried out in 2008 an analysis of the network structure of 
delegations in order to rationalize an d optimize the allocation of existing 
resources. 
182. Believes that the Commission should inform  recipient countries' administrations of 
its accountability obligations and request those who manage  funds downstream to be 
subject to similar obligations; 
 Takes the view, therefore, that devel opment aid in general and budget support in 
particular should be tied to an ex-ante disclosure statement, issued by the recipient 
country's government and signed by the finan ce minister, concerni ng selected issues 
that affect the governance and accountabi lity structure of a beneficiary country; 
 Invites the Commission to take the lead  and to present this proposal to other 
international donors - in part icular the World Bank - with a view to developing and 
implementing such an instrument in agre ement with other donors; stresses that the 
nature of penalties for a deliberately mi sleading disclosure statement will need 
particular attention; 
 Invites the Commission to inform it of a possible timeframe for these negotiations.  
(EDF §§ 71-76)  
Commission's response:  
The Commission takes note of the suggestio n of a Country Disc losure Statement. 
However the Commission believes that key information on governance is generally 
available through analysis carried out w ith the cooperation of the authorities and 
other actors such as the IMF and World Bank. These an alyses are fully taken on 
board in our Country Strategy Papers an d budget support Financing Agreements. 
If within budget support operations a go vernment does not meet its commitments 
as regards public finance management re forms or performance indicators within 
variable tranches, this would be taken into  consideration in the determination of 
the tranche disbursements 
183. Invites the Commission to inform it of the specific procedures it has established with 
the EIB in order to coordinate the two institutions' efforts to achieve EU development objectives, as well as of the efficiency of these procedures. 
 Invites the Commission to follow-up closel y the implementation of the Investment 
Facility with a view to guaranteeing that it  fulfils its objective as a development tool, 
and to inform its Committee on Budgetary C ontrol on a regular basis of its findings.  
(EDF §§ 86-89)  
EN 119   EN Commission's response:  
Since the 9th EDF the internal agreement has provided for a clear separation 
between the EDF funds managed by the Commission and those managed by the 
EIB.  The Commission does not act as authoris ing officer for Investment Facility 
funds and, as such, is not responsible for funds managed by the EIB. 
However, as provided for in the implementing regulation for the 10th EDF, the EIB 
consults the Commission on strategy documents, guidelines and projects.  At the 
same time, the Commission consults the EIB when devising strategies for the 
different countries or regi ons and the EIB’s scope of intervention is normally 
determined in the national or regional programming documents. 
In addition, the Commission coordinates actively with the EIB for a coherent 
approach to grants and loans, at techni cal level through dialogue between the 
respective services and at a strategic level e.g. in the fr amework of decision making 
structures for the EU Africa Infras tructure Trust Fund, where both the 
Commission and the EIB are members of  the Steering Committee, and for the 
Water and Energy Facilities, for which the EIB sits as member of the two Informal 
Advisory Groups of Experts. The purpose of this coordination is to ensure 
consistency and to promote synergies betw een development aid granted by the EU 
and the Bank’s operations. 
EN 120   EN Requests to the Commission in resolutions concerning the agencies 
184. The European Parliament deplores the fact that the ECA again found serious 
problems as regards the implementation of procurement rules and the Staff 
Regulations in many agencies; is not prepared to accept that these weaknesses have persisted over many years; considers that  the revision of the Regulation (EC, 
Euratom) No 2343/2002 will not do away with these problems and that a fundamental overhaul of the legal framework is needed;  (P6_TA(2009)0274 - §11)  
Commission's response:
 
The fact that some weaknesses are identified under current financial rules may 
require that some of these ru les are changed in the future. 
The Commission will present its proposal for the modification of the Financial 
Regulation next year taking into account  the observations of the EP. Financial 
Rules specific to agencies (notably the Framework Financial Regulation) will be 
examined, if relevant, following the trienni al revision of the Financial Regulation. 
They will also have to take into account th e work of the inter-institutional working 
group. 
However, some weaknesses identified by  ECA were also due to incomplete 
application of current financial rules, in  particular when some agencies lacked 
adequate experience in financial management. 
In order to improve the situation, th e Commission provides a wide-ranging 
assistance to agencies in several areas (see full details in reply to §25 of the 
resolution of the European Parliament). 
185. The European Parliament notes the Co mmission's statement that all necessary 
support was granted to those agencies wish ing to migrate to ABAC (Accrual Based 
Accounting); notes that the agencies in  some cases considered the support as 
insufficient.  (P6_TA(2009)0274 - §12)  
Commission's response:  
The Commission is deeply involved to connecting the Agencies to ABAC. A quick 
overview of the connection of entities to ABAC si nce the start of the project shows 
that : 
• 19 entities have been connected at 31/12/2008. Since the first agency has been 
connected in 2006, the average is 6 agencies per year. 
• In 2009, according to the forecast, 10 new entities will be connected, which 
represents a significant effort for the Commission. 
• Now, discussions are ongoing with 5 ex isting Agencies which continue currently 
to work with the previous computer system SI2, and should migrate to ABAC in 
2010. 
EN 121   EN • At the end of 2010, all existing entities having introduced a request should be 
connected to ABAC (approximately forty entities). 
186. The European Parliament urges the Commi ssion to consider technical abatement in 
order to lower surpluses in case of low implementation rates and persistently high vacancy rates, which will also trigger a reduction of assigned revenue  
(P6_TA(2009)0274 - §14)  
Commission's response:
 
The Commission has taken the requested action. 
It has taken the Parliament's request into account when preparing its 2010 PDB 
request, as explained in more detail in  the dedicated PDB Working Document on 
agencies (section 2.1 decentralised agencies). 
187. The European Parliament notes, in this context, the difficulties of decentralised 
agencies in recruiting highly qualified sta ff and experts; invites the Commission and 
the European Personnel Selection Office to  strengthen their supporting efforts.  
(P6_TA(2009)0274 - §15)  
Commission's response:  
EPSO provides assistance to the Agenci es on the basis of a Service Level 
Agreement signed on 14 March 2007. 25 Regu latory Agencies have signed the SLA 
between this date and today. Currently EPSO provides Agencies with support 
mainly on publication of posts and 3rd language testing coverage. On basis of an 
additional bilateral detailed service level agreement, EPSO also organised recently 
several open competitions for one specific agency (OHIM). 
In the context of the implementation of the EPSO's De velopment Programme, 
EPSO would be pleased to review the term s of its service level agreement with the 
Agencies in the near future, with a view  to formalising improvements of service: 
- short term : provide a consultancy role that: (1) encourages the agencies to make 
full use of the data bases of candidates already available for recruitment eRL 
(laureates of competitions) /CAST (selected contract agents), (2) help Agencies to 
market more effectively any vacancies that they cannot fill from EPSO's existing 
databases, so that the Agency's selection standards are not confused with those 
followed by EPSO itself when selecting cand idates for the Institutions and (3) to 
make available other IT tools to th e Agencies (online application form) ; 
- medium term: inventory of Agency needs, training for Agency Staff, allowing use 
of framework contracts ; 
- long term: possible full support of EPSO where the Office would organise 
selection procedures for agencies through its IT system and using Computer Based 
Testing. 
EN 122   EN 188. The European Parliament urges the Co mmission to continue scrutinizing the 
agencies' budget implementation for 2008 and 2009 and to make the necessary adjustments to the agencies' budget proposals  (P6_TA(2009)0274 - §16)  
Commission's response:
 
The Commission has taken the requested action. 
It has taken the Parliament's request into account when preparing its 2010 PDB 
request, as explained in more detail in  the dedicated PDB Working Document on 
agencies (section 2.1 decentralised agencies). 
189. The European Parliament welcomes th e Commission's efforts, since the 2009 
Preliminary Draft Budget (PDB), to system atically take into account the last known 
surpluses (in the case of th e 2009 PDB, those of year n-2) when calculating the 
Community contribution; in order to improve  transparency and efficiency, calls on 
the Commission, as a principal rule, to provide detailed information on the 
procedures for calculating a nd accounting for all types of  assigned revenue at the 
agencies' disposal, specifically those ar ising from previous years' surpluses.  
(P6_TA(2009)0274 - §17)  
Commission's response:  
The Commission has taken the requested action. 
It has taken the Parliament's request into account when preparing its 2010 PDB 
request, as explained in more detail in  the dedicated PDB Working Document on 
agencies (section 2.1 decentralised agencies). 
190. The European Parliament regrets that th e Commission, despite Parliament's request 
in 2006 discharge resolutions on agencies , has not presented a rapid solution and 
therefore asks the Commission again to look for a quick solution in order to enhance 
effectiveness by grouping the administrative functions of various agencies together.  
(P6_TA(2009)0274 - §24)  
Commission's response:  
The outcome and calendar for such a proposal does not depend on the 
Commission exclusively. 
This item is currently under discussion in  the inter-institutional Working Group on 
regulatory agencies. 
As established in the Common Statement of 10 March 2009, the inter-institutional 
Working Group on Regulatory Agencies will address a number of key issues put 
forward by the participating Institutions , including the role and position of the 
Agencies in the EU's institutional landscape, the creation, structure and operation 
of these agencies, together with fundin g, budgetary, supervision and management 
issues. At technical level, a list of speci fic issues have been identified and agreed 
upon. Work is currently ongoing within the Group and the Commission will 
undertake the necessary action depending on the outcome of these discussions. 
EN 123   EN In this context the inter-institutional Wo rking Group will, inter alia, examine the 
findings of the study commissioned by the European Parliament on the 
opportunity and feasibility of establis hing common support services for EU 
Agencies (April 2009). 
191. The European Parliament encourages th e Commission to increase its efforts in 
providing all necessary administrative assistan ce to relatively small and especially 
newly-created agencies; bearing in mind nega tive experiences from the past; calls on 
the Commission to issue in the shortest possible time special guidelines for the agencies concerning the applica tion of financial rules in re lation to staff recruitment, 
public procurement and so on  (P6_TA(2009)0274 - §25)  
Commission's response:
 
The Commission provides wide-ranging assi stance to agencies in several areas, 
particularly regarding budgetary (notably:  annual budgetary procedure, including 
activity-based management, financia l management and accounting) and 
administrative issues (for example: im plementing provisions for the staff 
regulations and staff policy plan). Some of this assistance is provided by the 
Commission by legal requirement, while  in many other cases the Commission 
assists agencies on a voluntary basis. 
Moreover, the Commission has improved  its co-operation with the agencies 
concerning the participation of its repr esentatives in the Management Boards, 
Memoranda of Understanding and services provided. 
In practice, agencies receive the same type  of assistance than Commission services 
concerning budgetary and financial man agement issues, through the CFS Central 
Financial Service) helpdesk, the accounting services of the Commission, internet 
tools and training, to which they have already full access. 
In particular, detailed guidance on proc urement and other financial management 
issues is made available on a dedicated website. 
Agencies also already have access to a number of framework contracts of the 
Commission, provided they are listed as potential contracting authorities in the 
tender documents - as for any inde pendent entity (equivalent to an 
interinstitutional contract). 
Finally, agencies are encouraged to sign  a number of service-level agreements 
with all horizontal Commission Director ates-General for support services, notably 
those relating to buildings and security , IT systems (including ABAC where 22 out 
of 31 agencies are already us ing this central system, with  2 more scheduled to join 
by the end of 2009 and 5 more during 2010), general and language training, 
medical services, etc. 
The Commission undertook a review of th e support it offers to agencies, which 
resulted in a document mapping all the services currently delivered by the 
Commission. This exercise had a twofold purpos e: first, to ensure that agencies are 
aware of the full scope of services that  the Commission offers; and second, to 
identify areas where assistance can be imp roved and rendered more efficient. This 
EN 124   EN mapping exercise was done in close coope ration with agencies via their TROIKA. 
The final document will be distributed to  agencies soon. Further steps could be 
undertaken on that basis. 
The Commission will take into account the re sults of the interinstitutional Working 
Group in order to further improve its assistance, where necessary. 
192. The European Parliament recalls the Commission's horizontal evaluation of the 
decentralised agencies referred to in its  above-mentioned Communication, the results 
of which should be available by 2009-10; calls on the Commission to ensure that 
evaluations of agencies become more transpar ent in the interests of both the agencies 
and stakeholders  (P6_TA(2009)0274 - §32)  
Commission's response:  
In addition to the ongoing evaluation of  decentralised agencies, the Commission 
has carried out two meta-studies - one in 2003 and one in 2008 - that provide a 
horizontal assessment of the system of decentralised agencies. Furthermore, in the 
context of the discussion of the PDB, the Commission has provided the budgetary 
authority with a set of documents contai ning information on existing and planned 
evaluations of agencies, as well a summary of main evaluation findings. 
Regarding the evaluations of individual agencies, it is important to bear in mind 
that generally agencies are responsible for undertaking  their own evaluation on 
programmes and activities, and only certain  Constituent Acts also foresee a role 
for the Commission concerning this kind of evaluations. 
See also reply to the European Parliament 's request in § 256 of the 2007 discharge 
resolution concerning the guidelines on evaluation. 
193. The European Parliament  recalls the suggestion ma de in its above-mentioned 
resolution that the inter-institutional working group address, inter alia, the need for a 
standard approach to the presentation of the agencies' activities during the financial 
year in question  (P6_TA(2009)0274 - §40)  
Commission's response:  
This item is among the discussion items agr eed at present by the inter-institutional 
Working Group. 
As established in the Common Statement of 10 March 2009, the inter-institutional 
Working Group on Regulatory Agencies will address a number of key issues put 
forward by the participating Institutions , including the role and position of the 
Agencies in the EU's institutional landscape, the creation, structure and operation 
of these agencies, together with fundin g, budgetary, supervision and management 
issues. At technical level, a list of speci fic issues have been identified and agreed 
upon. 
194. The European Parliament Insists on the need to establish minimum common 
standards with regard to the setting-up of decentralised agencies in the future.  
(P6_TA(2009)0274 - §43)  
EN 125   EN Commission's response:  
This item is currently under discussion in  the inter-institutional Working Group on 
regulatory agencies. 
As established in the Common Statement of 10 March 2009, the inter-institutional 
Working Group on Regulatory Agencies will address a number of key issues put 
forward by the participating Institutions , including the role and position of the 
Agencies in the EU's institutional landscape, the creation, structure and operation 
of these agencies, together with fundin g, budgetary, supervision and management 
issues. At technical level, a list of speci fic issues have been identified and agreed 
upon. Work is currently ongoing within  the Group and appropriate measures may 
be adopted depending on the ou tcome of these discussions. 
195. The European Parliament as ks the Commission a nd the agencies, in the meantime, to 
make available the financial documentation produced by the agencies in a complete, comparable and up-to-date manner on the common website launched by the Commission and the decentralised agen cies on the Commission's intranet.  
(P6_TA(2009)0274 - §44)  
Commission's response:
 
The Commission will undertake the necessary actions to keep up-to-date 
information on the common Commission-Agencies website. 
196. The European Parliament calls on the inte r-institutional working group, in the light 
of the 2007 discharge exercise, to consider  
 - the reasons behind budget implementation pr oblems, in particular  the lack of a top-
down approach concerning the agencies' budgets and staffing, 
 - the question why compliance with recruitment and procurement rules is a recurrent 
problem in many agencies, 
 - lessons learned from the specific expe rience of the European Anti-Fraud Office 
related to agencies, 
 - how the implementation of policies by agen cies can be made more cost efficient, 
for example by grouping the administrative f unctions of various agencies together, 
 - how the Commission's different support func tions and services could be made more 
reactive in order to respond qui cker to the agencies' needs.  (P6_TA(2009)0274 - §45)  
Commission's response:  
All these aspects are currently under disc ussion in the inter-institutional Working 
Group on regulatory agencies. 
As established in the Common Statement of 10 March 2009, the inter-institutional 
Working Group on Regulatory Agencies will address a number of key issues put 
forward by the participating Institutions , including the role and position of the 
Agencies in the EU's institutional landscape, the creation, structure and operation 
EN 126   EN of these agencies, together with fundin g, budgetary, supervision and management 
issues. At technical level, a list of speci fic issues have been identified and agreed 
upon. Work is currently ongoing within  the Group and appropriate measures may 
be adopted depending on the ou tcome of these discussions. 
197. European Translation Centre: The European  Parliament insists that the Commission 
and the Centre strive to resolve the di spute over pension cont ributions for staff 
quickly; requests the Centre to inform the discharge authority of the outcome of the 
negotiations.  (P6_TA(2009)0272 - §8)  
Commission's response:  
On 11.12.2007, the Court of Justice has transferred case C-269/06 to the Tribunal 
of First Instance, where it is no w registered as case T-406/07. 
The Commission is closely following this  issue and will inform the European 
Parliament of any development in this case. 
198. European Agency for Reconstruction: The European Parliament requests the 
Commission to inform Parliament's competent committee of: 
 (a) how the unused budgetary approp riations will be implemented; 
 (b) whether a memorandum of understandin g covering all items in the Agency's 
balance sheet has been concluded between  the Agency and the Commission, or how 
the Commission has otherwise ensured the completeness of the transfer of all files and items; 
 (c) how the accumulated surplus of EUR 180 000 000 shown in the Agency's balance 
sheet at 31 December 2007 will be  managed by the Commission.  (P6_TA(2009)0299 
- §9)  
Commission's response:
 
The Commission will provide the information requested by the European 
Parliament in its fifth and final inform ation note on the phasing out of the 
European Agency for Reconstruction. 
199. Fundamental Rights Agency: The European Parliament notes that OLAF has opened 
an investigation concerning the Agency; calls  on the Agency and on the Director in 
particular to fully cooperate with OLAF ; requests that OLAF, the Agency and the 
Commission inform the discharge authority of the results of the investigation and 
possible follow-up measures as soon as possible  (P6_TA(2009)0304 - §6)  
Commission's response:  
OLAF is able to confirm that the case in  question was closed without follow-up as 
no irregularities were identified. 
200. The European Parliament urges the Co mmission to ensure that the European 
Maritime Safety Agency, the European Aviation Safety Agency and the European Railway Agency maintain strict financial di scipline in the future and always works 
EN 127   EN within the agreed budgets.  (P6_TA(2009)0298 - §12, P6_TA(2009)0267 - §11 and 
P6_TA(2009)0297 - §232)  
Commission's response:  
The requested action has been taken. Th e Commission insists that all EU bodies 
should comply with EC legislation, and with the Preliminary Draft Budget for 
2010 it confirms its policy to ensure that the agencies pr esent more realistic budget 
proposals. 
However, it should be noted that the re gulatory agencies are independent bodies 
set up by Community law and that they are therefore responsible for their own 
administration and management. 
201. European Police College: The European Pa rliament asks the Commission to closely 
supervise the implementati on of the College's budget  (P6_TA(2009)0295 - §3)  
Commission's response:  
The Commission accepts the request. Taking account of the legal and budgetary 
autonomy of the agencies, the Commis sion is closely monitoring the 
implementation of the CEPOL's budget. Particular attention is paid to the 
cashflow position and the forecast of expenditure and implementation. 
202. European Police College: The European Pa rliament calls on the College, OLAF and 
the Commission to inform the discharge authority of the results of the OLAF investigation without delay as  soon as they are available.  (P6_TA(2009)0295 - §20)  
Commission's response:
 
OLAF agrees to provide information on the outcome of its investigation while at 
the same time respecting the need for conf identiality for cases where action is still 
ongoing by the national judicial authorities. 
203. European GNSS Supervisory Authority: The European Parliament calls on the 
Commission, to which the Galileo and EGNO S project assets are currently being 
transferred, to consider the ECA's observa tions and ensure that these assets are 
properly recorded in the accounts.  (P6_TA(2009)0296 - §16)  
Commission's response:  
The Commission is currently working toge ther with the European Space Agency 
and the European GNSS Supervisory Authority  (GSA) to ensure that assets from 
the EGNOS system and the relevant assets of the GSA are transferred to the 
Commission and properly recorded in the a ccounts. The transfer of the assets of 
the Galileo programme from ESA to the Comm ission is not foreseen to begin until 
the end of 2010.