Special Report 2014 report on the 
follow-up of the European 
Court of Auditors ’ 
Special ReportsEN 2016  NO 02
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2014 report on the  
follow-up of the European 
Court of Auditors’ 
Special Reports
(pursuant to Article 287(4), second subparagraph, TFEU)Special ReportEN 2016  NO 02
02
 Audit team
The ECA’s special reports set out the results of its performance and compliance audits of specific budgetary areas or 
management topics. The ECA selects and designs these audit tasks to be of maximum impact by considering the risks 
to performance or compliance, the level of income or spending involved, forthcoming developments and political and 
public interest.
This performance audit was produced by the CEAD Chamber (Coordination, Evaluation, Assurance, and Development) — 
headed by ECA Member Igors Ludboržs. 
The audit was led by John Sweeney, principal manager and Csaba Hatvani, head of task, with support and contributions 
from Neil Usher, director; Philippe Froidure, director; Paul Stafford, principal manager; Emmanuel Rauch, principal man -
ager; Jukka Nurmio, Elisabeth Türk-Saggel, Eddy Struyvelt, Katja Mattfolk, Hubert Deville, Stéphane Clot, Ivo Koppelmaa, 
Ramona Bortnowschi, Carlos Sanchez Rivero, Jesús Nieto Muñoz, Maciej Szymura, Niels Sorensen, Alison Ballantine-Smith, 
Danielle Pottier, Gediminas Macys, and Shane Enright. 
The responsible reporting member for this task was ECA Member Kevin Cardiff. 
From left to right: K. Cardiff, J. Sweeney, H. Deville, C. Hatvani, J. Nurmio. 
03
 Contents
Paragraph
 Acronyms and abbreviations
I–VI  Executive summary
1–4 Introduction
5–8 Scope and approach
9–12  The Commission’s implementation of 44 recommendations
9 –11  Introduction
12 Improvements in financial management have resulted from the implementation of 
recommendations, however some challenges for further developments remain
13–23  Audit of the Commission’s follow-up systems and procedures
13–15  Introduction
16–18  Commission’s internal control arrangements
19 The Commission has made some improvements to its system and procedures for follow-up but 
shortcomings remain
20 Adequacy and reliability of management information
21–23  Monitoring of partially implemented recommendations
24–25  Best practices regarding other systems and procedures
26–29  Conclusion and recommendation
04 Contents  
 
 Annex I  — Overview of recommendations reviewed by the Court
 Annex II —  Agriculture: management instruments applied to the market in milk and milk 
products
 Annex III — Agriculture: reform of the sugar market
 Annex IV —  Agriculture: specific measures in favour of the outermost regions and Aegean 
islands
 Annex V  — Cohesion: Social Fund spending on older workers
 Annex VI — External actions: contributions channelled through UN organisations
 Annex VII — External actions: food security
 Annex VIII — External actions: CRIS
 Annex IX — Internal policies: State aid
 Annex X — General criteria for an effective follow-up system
 Reply of the Commission
05
 Acronyms  
and abbreviations
ABAC : The Commission’s accrual-based accounting system
CH: Chamber
CRIS : Common External Relations Information System
EDF : European Development Fund
IAS: Internal Audit Service of the Commission
LISO : Local Information Security Officer
MMO : Milk Market Observatory
MS: Member State
PETRA : Project Expense Time Reporting Application
POSEI : Programme d’Options Spécifiques à l’Éloignement et l’Insularité — The EU’s outermost regions benefit from 
the POSEI arrangements in the agricultural sector
RAD : Recommendations, Actions, Discharge — an IT tool for monitoring
SAM : State Aid Modernisation project
SARI : State Aid Reporting Interface
SR: Special report
TFEU : Treaty on the Functioning of the European Union
06
 Executive  
summary
I
This report presents the results of our fourth review of the Commission’s follow-up of our recommendations made 
in previous special reports (SRs). After the 2011 (SR 19/2012) and the 2012 (SR 19/2013) consolidated reports on the 
same subject, in 2013 the results were summarised in paragraphs 10.53 to 10.55 of the annual report.
II
We assessed whether the Commission had taken the necessary actions to adequately manage and follow up the 
Court’s recommendations by addressing two sub-questions: Had the Commission adequately addressed the audit 
recommendations in the selected SRs, and was the Commission’s follow-up system robust?
III
We included an examination of the Commission’s follow-up of a sample of 44 recommendations from eight of our 
SRs from the period 2009-2012. For these recommendations we assessed the current state of play and the related 
Commission’s management information.
IV
Our review showed that the Commission has fully implemented 60 % of the Court’s recommendations, while 29 % 
were implemented in most respects, 8 % in some respects, and 3 % were not implemented.
V
The Commission has made some improvements to its system and procedures for follow-up, in particular as regards 
design, information, compliance, and user-friendliness of the follow-up IT application. However, the system cur -
rently does not fully ensure a sufficient audit trail of actions taken, nor provide for an internal assessment of the 
adequacy of these actions, and the monitoring of partially implemented recommendations.
VI
In light of the shortcomings identified in the Commission’s current follow-up system, and the Commission’s prev-  
ious acknowledgment of the need for improvements, the Commission should carry out the necessary improve -
ments (SR 19/2013) in order to bring its practices into line with the relevant internal control standards.
07
 Introduction
01 
According to international auditing standards, the follow-up of audit reports is 
the final stage in the performance audit cycle of planning, execution and follow-
up. Following up performance audit reports is a necessary element in the cycle of 
accountability and encourages the Commission’s effective implementation of our 
recommendations.
02 
This is the third consolidated report on follow-up by the Court. Observations 
from the 2013 follow-up exercise were published in summary form within the 
2013 annual report.
03 
Our first follow-up report in 2012 (SR 19/2012) observed that the follow-up of our 
audit recommendations by the Commission needed strengthening. Our second 
follow-up report in 2013 (SR 19/2013) recommended that the Commission should 
refine its IT tool for monitoring, the ‘RAD’ (Recommendations, Actions, Discharge) 
application to better reflect recommendations that had only been partially 
implemented.
04 
This current report presents the results of our 2014 review of the Commission’s 
follow-up of recommendations made in our previous SRs, as well as changes 
made to the RAD application.
08
 Scope and  
approach
05 
Our objectives were twofold: (a) to carry out a limited review of follow-up actions 
taken by the Commission on a sample of the Court’s SRs recommendations, and 
(b) to perform an audit to assess if the Commission’s follow-up system (technical 
and procedural) is robust, by verifying the adequacy and reliability of the current 
system and identifying areas for improvement.
06 
The audit of the Commission’s system examined the modifications made to the 
system (RAD) since our last review in 2012. We also compared the operations and 
features of the RAD system and those of other follow-up systems within the Com -
mission services, with the aim of identifying good practices.
07 
The purpose of our review of the follow-up actions on our previous recommen -
dations was to determine the state of play, the timeliness of their implementa -
tion, and outstanding and/or new relevant issues (if any), which need to be 
addressed. Eight SRs were selected firstly on the basis of whether at least 2 years 
had elapsed since their publication, so that the Commission would have suf -
ficient time to address the recommendations, and secondly by reference to the 
continued relevance of the recommendations. The reports included in this review 
are presented in Table 1 .
08 
When assessing the implementation status of recommendations, we use the 
following categories: fully implemented, met in most respects, met in some re -
spects, not implemented, could not be verified, or no longer relevant.
09 Scope and approach   
 
List of selected special reports
No Report No Title
1 SR 14/2009 Have the management instruments applied to the market in milk and milk products achieved their main objectives?
2 SR 6/2010 Has the reform of the sugar market achieved its main objectives?
3 SR 10/2010 Specific measures for agriculture in favour of the outermost regions of the Union and the smaller Aegean islands
4 SR 25/2012 Are tools in place to monitor the effectiveness of European Social Fund spending on older workers?
5 SR 3/2011 The efficiency and effectiveness of EU contributions channelled through United Nations Organisations in conflict-affected countries
6 SR 1/2012 Effectiveness of European Union development aid for food security in sub-Saharan Africa
7 SR 5/2012 The Common External Relations Information System (CRIS)
8 SR 15/2011 Do the Commission’s procedures ensure effective management of State aid control?Table 1
10
 The Commission’s 
implementation of 
44 recommendations
Introduction
09 
This section presents the results of the Court’s review of the Commission’s 
implementation of a sample of 44 recommendations from the eight selected 
SRs issued by the Court in the period 2009-2012. Annex I  shows the result of the 
assessment of each of the 44 recommendations examined, while Annexes II  to IX 
provide a brief summary of the relevant audits, the recommendations, the sub -
sequent follow-up actions taken by the Commission, and any remaining issues 
which need to be addressed.
10 
Of the 44 recommendations examined three recommendations were no longer 
relevant1 and follow-up actions for three recommendations could not be verified, 
as the necessary evidence was only or mostly available at Member State level2.
11 
Of the remaining 38 recommendations which could be assessed, we found that 
the Commission had fully implemented 60 % of our recommendations3, 29 % 
were implemented in most respects, 8 % in some respects, and 3 % were not 
implemented.
Improvements in financial management have resulted 
from the implementation of recommendations, 
however some challenges for further developments 
remain
12 
The following are examples of improvements achieved and remaining challenges 
arising from actions taken on our audit recommendations. Box 1Improved regulation and monitoring (see Annex II and III )
Better regulation and closer monitoring were noted in the milk and sugar sectors. In the milk market, pro -
gressive deregulation, coupled with the Commission’s supervision and a toolbox of measures made available 
to the Member States, has enabled the EU milk production to better respond to demand on the market and 
contributed to the avoidance of a return to subsidised, structural overproduction. In the short term, however, 
milk producers may still face volatility in demand and prices. Whilst the Commission continues to monitor milk 
and sugar prices closely, its influence on these prices is limited.1 In the case of 
Recommendation 1 of  
SR 6/2010 the sugar quota 
regime will end in 2016/2017, 
in the case of 
Recommendation 3 of  
SR 5/2012, a new, different IT 
strategy was adopted by the 
Commission, and in the case 
of Recommendation 1 of  
SR 5/2012 CRIS will be replaced 
by ABAC Accounting.
2 Recommendation 3 of  
SR 10/2010 and 
Recommendations 5 and 6 of 
SR 6/2010.
3 This includes 
a recommendation  
(SR 15/2011 No 11) which was 
originally rejected by the 
Commission.
11 The Commission’s implementation of   
44 recommendations Box 2 Box 3Better data quality
(a) Providing sufficient information and training to officials of the UN and the Commission who are responsi -
ble for EU programmes is essential. For example, following our recommendations relevant actors of food 
security measures are now informed and trained on a regular basis on issues concerning the fight against 
hunger (see Annex VII ). In addition, information on the costs incurred by channelling funding through UN 
organisations in conflict-affected countries is now also provided, in order to allow the cost-effectiveness 
of funding channels to be considered for future actions (see Annex VI ).
(b) Data management is becoming increasingly important in the management of EU policies and pro -
grammes. For example,
(i) concerning the Common External Relations Information System (CRIS), which is an information 
system put in place by the Commission to support the management of external actions, data quality 
controls were reinforced and responsibilities for the management of data security were clarified (see 
Annex VIII );
(ii) state aid control is currently better equipped with IT systems, taking into account the enhanced Pro -
ject Expense Time Reporting Application (PETRA) for time and management reporting and the State 
Aid Reporting Interface (SARI) as a tool of communication between Member States and the Commis -
sion, which has been operational since 2012 (see Annex IX ).
Improved performance information
(a) Some performance management systems concerning the POSEI/Aegean programmes, programmes for 
unemployed older workers and in the field of food security have been significantly improved by the use 
of mandatory performance indicators in the Member States’ annual reporting.
 However, providing sufficient and consistently reliable data presents challenges for Member States 
(see  Annexes IV, V, and VII ).
(b) In the area of food security (see Annex VII ), 50 detailed country profiles now give a global overview of 
each country, with indicators covering the context of the food security. Furthermore, for programmes 
addressing the needs of older workers (see Annex V ), the Commission has improved the documentation 
of its checks by introducing newly created 2014-2020 checklists, thus improving the documentation and 
coverage of actions.
(c) We recommended improvements in reporting obligations on EU contributions channelled through UN 
organisations, including SMART indicators, comparative reports, detailed work plans, and understandable 
detailed budgets. These are now provided for in ‘Joint Guidelines’ issued in 2011 (see Annex VI ).
12
 Audit of the Commission’s 
follow-up systems and 
procedures
Introduction
13 
Under the Commission’s Internal Control Standards4 (ICS) management is re -
quired to set up supervisory measures to ensure that the implementation of 
activities is running efficiently and effectively while complying with applica -
ble provisions (ICS 9 Management Supervision). This includes the following 
requirements:
(a) Management is required to keep track of main issues and ensure the follow-
up of accepted audit and other recommendations. Management supervision 
covers both legality and regularity aspects and operational performance and 
includes supervision of external bodies entrusted with the budget implemen -
tation tasks;
(b) The director-generals are required to inform the responsible Commissioner of 
any potentially significant issues related to internal control and audit […] as 
well as material budgetary and financial issues that might have an impact […] 
or on the sound management of appropriations or which could hamper the 
attainment of the objectives set.
14 
The standard also identifies the following criteria among others that manage -
ment may want to consider when assessing control effectiveness:
(a) whether there is a systematic follow-up of significant issues identified 
through the supervisory activities;
(b) if implementing bodies are responsible for carrying out actions (e.g. in Mem -
ber States or agencies), whether appropriate supervision or follow-up has 
been established by the responsible Commission service.
15 
The International Standards for the Professional Practice of Internal Auditing5 
also provide in their practice advisory guidance that internal auditors ‘evaluate 
the adequacy, effectiveness and timeliness of actions taken by management on 
reported observations and recommendations, including those made by external 
auditors and others’.4 Internal control is a process 
designed to provide 
reasonable assurance 
regarding the achievement of 
objectives in effectiveness and 
efficiency of operations, 
reliability of financial 
reporting, and compliance 
with applicable laws and 
regulations, http://www.coso.
org/resources.htm  
(Committee of Sponsoring 
Organisations of the Treadway 
Commission). The 
Commission’s internal control 
standards and underlying 
framework can be found in 
the following document: 
‘Communication on the 
revision of the Internal Control 
Standards and Underlying 
Framework — Strengthening 
Control Effectiveness 
(SEC(2007)1341)’.
5 International Standards for the 
Professional Practice of 
Internal Auditing (Standards). 
Primary Related Standard 
2500.A1 and Practice Advisory 
2500.A1.1: Follow-up process. 
The Internal Audit Service of 
the Commission carries out its 
work according to these 
standards.
13 Audit of the Commission’s follow-up   
systems and procedures
Commission’s internal control arrangements
16 
The monitoring of the Court’s recommendations, as required under ICS 9, falls in 
the first instance to the management itself. Information on the follow-up of our 
recommendations and the requests of the discharge authority is entered by the 
Commission services into the RAD application, which serves as a basis for draft -
ing the section of the annual activity report (AAR)6 dedicated to the follow-up of 
recommendations and requests.
17 
The Commission also prepares an annual report on the requests made by the 
European Parliament and the Council7 in their role as the discharge authority for 
the European Union’s budget. Several Commission services8 also maintain local 
applications used to monitor audit recommendations and audit findings in their 
areas of responsibility (see paragraphs 24 to 25). The several modules of local 
applications help to facilitate the management (including planning, monitoring, 
reporting) and implementation of actions in response to recommendations and 
requests formulated by relevant actors (IAS, ECA, EP , COUNC) because they make 
the respective information and action plans for the directorates-general and 
services available in a single repository. They also support activities of internal 
control (related to the ICS) and ex post  control.
18 
Up to March 2015 each directorate-general was equipped with an Internal Audit 
capability (IAC) and an internal control coordinator, whose functions included 
informing the directorate-general’s management about the adequacy and pro -
gress of the actions undertaken to implement the Court’s recommendations. In 
November 2014, the Commission decided to centralise its internal audit function 
and as a consequence the IACs were dismantled and the IAS became the sole 
internal audit function for the Commission and its executive agencies9.6 http://ec.europa.eu/atwork/
key-documents/
index_en.htm
7 Article 166(2) of Regulation 
(EU, Euratom) No 966/2012 of 
the European Parliament and 
the Council of 25 October 2012 
on the Financial rules 
applicable to the General 
Budget of the Union and 
repealing Council Regulation 
(EC, Euratom) No 1605/2002 
(Financial Regulation) 
(OJ L 298, 26.10.2012, p. 1).
8 Including the IAS, DG 
Agriculture and Rural 
Development, DG Neighbour-
hood and Enlargement 
Negotiations and DG Research 
and Innovation.
9 http://ec.europa.eu/dgs/
internal_audit/about/history/
index_en.htm
14 Audit of the Commission’s follow-up   
systems and procedures
The Commission has made some improvements to its 
system and procedures for follow-up but shortcomings 
remain
19 
A well-managed management information system which records audit recom -
mendations and follow-up actions should facilitate accountability to both exter -
nal and internal stakeholders and monitor improvements to financial manage -
ment. The information recorded should be reliable, priorities for action should be 
specified, and an audit trail should exist to provide evidence of the action taken, 
as well as instances where no, or limited action has been taken, and reasons for 
this, in order to allow management to make an informed decision on assuming 
the risk of not implementing recommendations. It should also allow manage -
ment to have a timely overview of issues raised by its auditors (both internal and 
external) in terms of risks and shortcomings identified and their recommended 
actions, and it should facilitate the follow-up action taken by the responsible line 
managers, as well as the subsequent monitoring and verification of that action.
Adequacy and reliability of management information
20 
The management information provided by RAD was generally reliable. How -
ever, in 11 out of 24 criteria ( Annex X ) we used to assess the effectiveness of the 
follow-up system, shortcomings were identified. These included:
(a) In regard to the completeness of audit trails, we observed only a few cases 
where supporting documents (e.g. action plans on tasks to be achieved 
in response to the recommendation) were included in the database. This 
information is important as the Commission’s replies published along with 
SRs may or may not indicate concrete actions to be taken in response to the 
recommendations;
(b) While recommendations addressed to Member States are generally included 
in RAD, and are classified as either ‘accepted’ or ‘rejected’, they are not fol -
lowed up by the Commission. In line with ICS 9 Management Supervision, 
where Member States and agencies are responsible for taking action on our 
recommendations, appropriate supervision or follow-up should be estab -
lished by the responsible Commission services;
(c) Information contained in RAD may overestimate the extent of the implemen -
tation of the recommendations concerned10. For example, of the 39 recom -
mendations referred to as ‘done’ in RAD, we considered 14 (36 %) as only 
partially implemented (‘met in most respects’ or ‘met in some respects’).10 This discrepancy between the 
assessments of the 
Commission and the Court 
may be partially explained by 
the fact that RAD only 
contained four assessment 
categories prior to 2015. As 
a consequence partially 
implemented 
recommendations could not 
be recognised in the system.
15 Audit of the Commission’s follow-up   
systems and procedures
(d) Except for high level information contained in the annual activity report 
(AAR)11 of directorates-general, no reports and indicators are produced which 
provide concrete information as to the adequacy, effectiveness, or timeliness 
of actions taken on our audit recommendations, as recommended by internal 
auditing standards.
Monitoring of partially implemented 
recommendations
21 
The Commission has taken several steps to improve the monitoring capability of 
the system, including the development of annual plans to monitor progress. In 
2014 it introduced a new recommendation status ‘Partially implemented’. How -
ever, the use of this category by Commission services currently remains limited.
22 
Recommendations which have been assessed as ‘partially implemented’ by the 
Court but which are recorded as ‘done’ in RAD are not subsequently reopened 
and reclassified by the Commission. Furthermore, there is no procedure for as -
sessing the continued relevance of old outstanding recommendations in the da -
tabase. Accordingly, none of the 86 recommendations from the 21 SRs previously 
assessed by the Court as ‘partially implemented’ have had their status revised in 
RAD.
23 
The Commission already acknowledged in its replies to our follow-up report in 
2013 (SR 19/2013), the need to examine the possibility of harmonising the imple -
mentation assessment categories used by the Commission and the ECA and to 
further develop the RAD application in order to improve the information pro -
vided to management. Unfortunately, due to other priorities, the Commission has 
been unable to make progress in addressing these needs.11 And RAD Business Objects 
reports since June 2015.
16
 Best practices regarding 
other systems and 
procedures
24 
We carried out a systematic comparison of how recommendations from the Court 
and the IAS are processed by a number of directorates-general of the Commis -
sion in order to identify good practices. The exercise included an examination of 
follow-up systems and procedures for a sample of recommendations from audit 
reports in respect of six directorates-general: Agriculture and Rural Development, 
International Cooperation and Development, Employment, Social Affairs and 
Inclusion, Neighbourhood and Enlargement Negotiations, Regional and Urban 
Policy, and Research and Innovation, in order to compare systems’ functionality12. 
An overview of the functionalities of these systems is contained in Box 4 .
25 
These various follow-up systems of the Commission have been developed to 
take account of the individual and specific needs of the directorates-general 
concerned. In comparison with the RAD application, the review of the different 
systems highlighted the many good features they possess in supporting good 
accountability and governance requirements. Box 4Examples of other follow-up systems of Commission services
(a) The follow-up application used by the Commission’s Internal Audit Service (IAS) ‘GRC Issue Track’ is 
a robust system which records all issues and continuously follows them up. Reporting is quarterly and 
the focus is on high risk overdue issues. Action plans and all supporting documents are readily available 
in the system. Several reports exist, including the Annual Report of the Internal Auditor (ARIA), the IAS 
Annual Activity Report, and Audit Progress Committee reports. In the framework of the follow-up task, 
residual risk is reassessed and the significance of the recommendation may be downgraded. The auditees 
are constantly reminded of the open issues, guaranteeing high visibility and regular follow-up.
(b) The Commission (DG Agriculture and Rural Development) uses the Internal Control Management tool 
(ICM), which is a collaborative workspace. This allows monthly transfer of selected data from RAD. It has 
several advantages over RAD, including user-friendliness (both for auditors and managers), management 
of action plans and related actions, documentation of status by auditee and auditor, and several ready-
made reports of expiring and overdue recommendations. ICM helps auditees to write clear, achievable, 
timed action plans. It also includes reports illustrating the state of play regarding recommendations of 
IAC, IAS and ECA audit as well as EP and Council requests. These reports are automatically refreshed daily, 
so they always contain the latest information.
(c) DG Research and Innovation’s ‘ASUR’ and DG Neighbourhood and Enlargement Negotiations’s ‘ARGO’ 
systems have additional features to RAD. For example, a standard action plan is required and deadlines 
and supporting documents are well managed. The systems each contain a module for planning and risk 
analysis, and are flexible, and highly customisable.12 Only the Internal Control 
Management (ICM) of DG 
Agriculture and Rural 
Development contains the 
Court recommendations, 
there is a monthly data 
transfer from RAD.
17
 Conclusion and 
recommendation
26 
Our review of the Commission’s follow-up of 44 recommendations from our SRs 
shows that the Commission has fully implemented 60 % of the Court’s recom -
mendations, while 29 % were implemented in most respects, and 8 % in some 
respects, and that this has contributed towards improving financial management 
in a number of areas of the EU budget (see paragraph 12) and ( Annexes II to IX ).
27 
Our audit of the adequacy and reliability of the Commission’s RAD application 
showed that the information contained in the RAD application was generally 
reliable. However, the application still displays shortcomings such as a lack of 
concrete information on actions taken (paragraph 20(a)); the absence of appro -
priate supervision or follow-up of recommendations where Member States are 
responsible for carrying out actions (paragraph 20(b)), and the lack of subsequent 
monitoring and revision of partially implemented recommendations (paragraph 
20(c)).
28 
The Commission needs a global view of actions taken in response to weaknesses 
identified by the Court and by the discharge authority who are engaged in 
control and oversight, in line with its internal control standard and best practice 
guidance of internal auditing. As previously acknowledged by the Commission, 
the categories for assessing the sufficiency of actions taken need to be harmo -
nised and the RAD application developed in order to improve the information 
provided to management. Complementary to this, better follow-up leading to 
improved reporting on the adequacy and timeliness of corrective actions taken 
is needed and the Commission should designate a service to perform the work. 
If achieved, an improved follow-up system would provide sufficient, reliable and 
pertinent information on improvements resulting from the Court’s audit recom -
mendations and thus contribute to the sound financial management of the EU 
budget.
18 Conclusion and recommendation  
 
29 
In light of the shortcomings identified in the Commission’s current follow-up 
system, and the Commission’s previous acknowledgment of the need for im -
provements (SR 19/201313), we recommend that the Commission should carry out 
the necessary improvements to its systems in order to bring its practices into line 
with the relevant internal control standards, including:
(a) explaining and/or documenting the status of actions taken on the 
recommendations;
(b) reviewing the actions of Member States and agencies in addressing our audit 
recommendations;
(c) reporting more fully in the annual activity reports or elsewhere on the ac -
tions taken in addressing recommendations;
(d) reviewing recommendations assessed as partially implemented by the Court 
to reflect their actual status.
This report was adopted by Chamber CEAD, headed by Mr Igors LUDBORŽS, 
Member of the Court of Auditors, in Luxembourg at its meeting of 19 January 2016.
 For the Court of Auditors
 Vítor Manuel da SILVA CALDEIRA
 President
13 See paragraph VI from 
Executive summary.
19
 Annexes Annex IOverview of recommendations reviewed by the Court
SR Per audit Paragraph RADFully 
implementedImplementedNot  
implementedCould not 
be verifiedNo longer 
relevantIn most 
respectsIn some 
respects
SR 14/2009  
Milk1 66 Done X
2 67 Done X
3 69 Done X
4 72 Done X
SR 6/2010  
Sugar1 99/1 Done X
2 99/2 Done X
3 101 Done X
4 102 Done X
5 108 Rejected X
6 108 Rejected X
SR 10/2010  
Outermost1 80 Done X
2 81 Done X
3 82 Done X
4 83 Done X
5 84 Done X
SR 25/2012  
Older workers1 62 Done X
2 62 Done X
3 63 Done X
4 64 Done X
5 64 Done X
SR 3/2011  
UN1 48 Done X
2 50 Done X
3 52 Done X
SR 1/2012  
Food security1 68 Done X
2 68 Done X
3 68 Done X
4 68 Done X
5 68 Done X
6 68 Done X
20 Annexes  
 Annex ISR Per audit Paragraph RADFully 
implementedImplementedNot  
implementedCould not 
be verifiedNo longer 
relevantIn most 
respectsIn some 
respects
SR 5/2012  
CRIS1 76 Done X
2 79 Done X
3 80 Cancelled X
4 81 Done X
SR 15/2011  
State aid1 96a Done X
2 96b Done X
3 96c Done X
4 98a Rejected X
5 98b Done X
6 98c Done X
7 98d Done X
8 98e Done X
9 98f Done X
10 100a Done X
11 100b Rejected X
TOTAL 44 44 23 11 3 1 3 3
ASSESSED 38 60 % 29 % 8 % 3 %
21 Annexes  
 Annex IIAgriculture: management instruments applied to the market in milk and milk 
products
1. Special Report 14/2009 asked the question if the management instruments applied to the market in 
milk and milk products achieved their main objectives.
‘Milk production is of major importance in the European Union’s agricultural economy. More than 1 million 
producers supply 148 million tonnes of milk annually with an approximate value of 41 000 million euro at the 
farm gate. The milk processing sector (producing mainly cheese, butter and drinking milk) employs around 
400 000 people and generates a turnover of 120 000 million euro.’
(Source:  Press release ECA/09/63)
2. In this special report the European Court of Auditors reviews how effectively the European Commission 
managed the market for milk and milk products since the introduction of milk quotas in 1984, with reference 
to the main objectives of EU dairy policy. We also highlight the most critical issues to be considered in the 
progressive deregulation of the milk sector, which was started in 2003.
3. The EU’s milk policy was designed to meet a complex range of objectives, in particular: (a) to reach a situa -
tion of market equilibrium, (b) to stabilise the prices of milk and milk products, (c) to ensure a fair standard of 
living for producers and (d) to improve competitiveness.
22 Annexes  
 Annex IIThe Court’s recommendations
Recommendation Implementation status The Court’s assessment
(1)  The Commission must continue to supervise the develop -
ment of the market in milk and milk products by imple -
menting the measures required to make sure deregulation 
of the sector does not lead to the recurrence of overproduc -
tion. Failing this the Commission’s objective of keeping to 
a minimum level of regulation, of the safety net type, might 
rapidly prove impossible to fulfil.Fully implementedThe deregulation of the market and the market-oriented 
approach pursued by the Commission has enabled 
EU milk production to better respond to demand on 
the market, and thereby contributed to Commission’s 
objective to stabilise the milk and milk products market, 
and to avoid recurrence of overproduction, especially of 
a permanent structural, subsidised overproduction.
(2)  While acknowledging that price formation in the food 
sector is particularly complex, the Court considers that it 
must be subject to regular monitoring by the Commission. 
The Commission and the Member States must ensure that 
the concentration of processing and distribution companies 
does not reduce milk producers to mere price-takers and 
does not restrict the final consumer’s possibility of enjoying 
an equitable share of price reductions.Implemented in most 
respectsAs regards monitoring, the recently created Milk Market 
Observatory (MMO) is a comprehensive, easily accessible 
and useful source of the data concerning milk sector for 
all the stakeholders to use for monitoring, analysis and 
potential market interventions. Milk producers were 
provided with a toolbox of measures (for example, creat -
ing producer organisations) to strengthen their position 
in milk supply’s chain to have a stronger impact on the 
producer prices. The first positive examples of making 
use of these opportunities have already been noted (e.g. 
in the ‘Milk Package’ implementation’s report).
However, we believe that the Commission could be more 
active in promoting the measures included in the ‘Milk 
Package’ oriented at reinforcing the milk producers’ 
position in the milk supply chain, as current use of these 
measures remains limited. Another problem concerns 
the very limited influence that the Commission has on 
the consumer prices, due to a number of reasons such 
as the policy of market orientation, the complexity of 
the pricing in the sector, in particular dairy products and 
limited price transmission between milk producer price 
and dairy products consumer prices.
(3)  As far as the dairy sector is concerned, in practice both the 
former policy of price support and the current policy of di -
rect income support lack regional and social focus. In view 
of the importance of milk production in the agricultural 
economy and its impact on the management of the coun -
tryside, the Court recommends that the Commission should 
intensify its reflection on the strategies to be applied to 
tackle:
 ο the specific problems of the regions in which milk produc -
tion is, more vulnerable, in particular in mountainous areas;
 ο the environmental consequences of the  
geographical concentration of milk production.Implemented in most 
respectsThe Commission has focused on disadvantaged areas in 
agriculture and environmental aspects of the agricultural 
policy since the Court’s SR14/2009. The EU legislative 
framework containing ‘a toolbox’ of legislative instruments 
for the Member States (MS) was maintained and developed 
(notably ‘greening component’) by the Commission.
However, taking into account (a) a great number of dairy 
farms located in disadvantaged areas and possible serious 
unwanted consequences of the current and future structural 
adjustments in the sector, and (b) that the Commission left 
it to the discretion of MS to use the toolbox measures, we 
found that the risks identified in paragraph 69 of SR 14/2009 
remain and the current policy framework might not suffice 
to maintain production in disadvantaged areas.
(4)  For the European milk sector, the world market will remain 
a secondary market to which it will only have access during 
periods when world prices are high. Only producers of 
cheeses and other products with high added value will 
be able to claim sustainable market shares. It is therefore 
indispensable for the Commission and the Member States 
to pursue their efforts to bring about a reorientation of milk 
production, primarily towards satisfying the needs of the 
European domestic market and also towards the produc -
tion of cheeses and other products of high added value 
which can be exported without budgetary assistance.Fully implementedSince SR 14/2009, as a result of growing world market 
demand and the EU’s pursuit of market orientation 
policies, the EU has in the meantime become one of 
the world’s leading exporters of milk products without 
export refunds.
23 Annexes  
 Annex IIIAgriculture: reform of the sugar market
1. Special Report 6/2010 concerned the reform of the sugar market.
‘The EU launched a major reform of its sugar sector in 2006 in order to increase market orientation and to 
stabilise the market while complying with international commitments. The European Court of Auditors has 
conducted an audit of the reform and concludes that, whereas the aim was to create an incentive for the 
least competitive sugar producers to give up their quotas, quotas were also abandoned by competitive fac -
tories. There is an increased dependence on imports while there are doubts as to whether the fall in prices 
will be passed on to final consumers and delays persist in implementing diversification and environmental 
measures. The Court also notes the increasing risk of displacement of production facilities. The sugar reform 
involved a price decrease as well as a 30 % reduction in production quotas, resulting in the closure of 80 
factories. A restructuring fund and aid for diversification were intended to mitigate the social and economic 
impact of these measures. The Court’s audit assessed the extent to which the objectives of the reform have 
been achieved to date.’
(Source:  Press release ECA/10/30).
The Court’s recommendations
2. The Court issued two recommendations to ensure competitiveness, another two to stabilise markets and 
guarantee the availability of supplies, and the last two to address and alleviate adaptation problems.
24 Annexes  
 Annex IIIRecommendation Implementation status The Court’s assessment
(1)  The prevailing external pressures may require the Commis -
sion to propose further adjustments of internal production. 
In such a case, the Court recommends that instruments and 
measures should be designed so as to ensure overall con -
sistency and be based on thorough technical assessments 
of needs and objective and non-discriminatory criteria.No longer relevantRecommendation 1 required further adjustments of 
internal production proposed by the Commission, due 
to external pressures. After the reform however, the 
Commission proposed no significant further adjustments 
of internal production and quota. However, the recom -
mendation will be no longer relevant with the ending of 
sugar-quota regime in 2017 .
(2)  In view of the importance of sugar production in the 
agricultural economy, the Court recommends that the 
Commission proposes measures to remove the rigidities 
and constraints in the current quota system which affect 
adversely the competitiveness of growers and producers.Fully implementedThe Commission’s proposal in 2011 to end the quota sys -
tem and all its rigidities and constraints was approved.
(3)  The Court recommends that possible future decisions which 
impact EU sugar production take into account the level of 
internal sugar production which is considered necessary 
given the Treaty objective of assuring availability of supply.Implemented in most 
respectsRegulation (EU) No 1308/2013 gives the Commission the 
legislative authority and tools to intervene in the market 
in case of over- or under-supply of sugar. Recent reports 
provide evidence that the Commission regularly moni -
tors sugar production and consumption, imports and 
exports, and opening and closing sugar stocks in order 
to ensure availability of sugar supply on the EU market 
in accordance with the Treaty objectives. However, 
significant EU reliance on sugar imports was identified as 
the main factor that may affect the availability of sugar 
supply and EU market stability. Today, the EU continues 
to be a net importer and produces around 83 %-88 % of 
the EU consumption.
(4)  While acknowledging that price formation in the food 
sector is particularly complex, the Court considers that it 
must be subject to regular monitoring by the Commission. 
The Commission and the Member States must ensure that 
competition law is correctly enforced in the sector thus 
ensuring the Treaty objective that supplies reach consum -
ers at reasonable prices.Implemented in most 
respectsThe Commission monitors sugar prices on a monthly 
basis. There are no apparent issues regarding the rea -
sonableness of sugar prices or availability of supply. The 
Commission also launched a study on price transmission 
in the sugar market. However, the Commission could 
have done more within its mandate to ensure that com -
petition law is enforced, by following up unusual low or 
high sugar prices, assessing the concentration of sugar 
producers and its impact on competition rules, reflecting 
on a strategy to improve vertical price transmission so 
that consumers can enjoy a reasonable share of any 
producers’ price reductions.
(5)  The Court recommends that the Commission and the Mem -
ber States take urgent measures to ensure the diversifica -
tion measures become rapidly operational and produce the 
intended impact to promote alternatives to sugar beet and 
sugar production.Could not be verifiedThe Commission rejected Recommendations 5 and 6 on 
the grounds that the responsibility for (a) the implemen -
tation of the diversification measures and (b) ensuring 
compliance with environmental obligations following 
the closure of factories lies with the Member States, in 
line with the subsidiarity principle. The implementation 
status of these recommendations could not be verified 
due to the limited scope of the follow-up review related 
to MS.(6)  The Court recommends that the Commission and the Mem -
ber States become more actively involved in ensuring that 
the environmental obligations entered into by the closed 
factories are fully complied with.Could not be verified
25 Annexes  
 Annex IVAgriculture: specific measures in favour of the outermost regions and Aegean islands
1. Special Report 10/2010 concerned the implementation of the specific measures for agriculture in 
favour of the outermost regions of the Union and the Aegean islands.
2. ‘The specific measures for agriculture in favour of the outermost regions of the European Union and the 
smaller Aegean islands were created to take account of the regions’ structural, social and economic situation.
3. The European Court of Auditors has assessed the effectiveness of the specific measures after their reform in 
2006.
4. The reform involved a shift towards greater regional participation, and to decentralisation and flexibility in 
decision-making, on the basis of programmes presented by Member States for approval by the European 
Commission.’
(Source:  Press release ECA/10/39)
The Court’s recommendations
5. We made two recommendations on response to specific needs, two on implementation of the 2006 Reform, 
and one on monitoring.
26 Annexes  
 Annex IVRecommendation Implementation status The Court’s assessment
(1)  For future programming of specific measures, the Com -
mission should help the Member States draw up their 
programmes by promoting best practices and by defining 
a harmonised framework of indicators for monitoring 
programme performance. The indicators should at least 
include information about economic changes (e.g. produc -
tion value and added value) and social changes (e.g. jobs 
created or preserved).Implemented in  
most respectsIn the context of helping the Member States, the Com -
mission defined a framework of common indicators for 
monitoring the programme performance and included 
the list of performance indicators in community legisla -
tion in 2014.
The current implementing regulations include harmo -
nised common performance indicators relating to the 
objectives of the POSEI/Aegean programmes. Their use is 
mandatory in the MS annual reporting to the Commis -
sion of implementation of programmes (AIRs).
However, MS have experienced difficulties in providing 
sufficient data related to all indicators, and the contents 
of all AIRs do not always follow the Commission’s 
request in this respect. In general, no formal documen -
tation of its further actions in spreading best practices 
was available.
(2)  The Commission should reconsider the 1 August n-1 
deadline for formally approving programme amendments 
so that the Member States possess reliable information on 
the previous year’s expenditure when they are preparing 
amendments.Fully implementedMS can now propose amendments with a flexible 
procedure either postponing or completely removing the 
earlier 1st August N-1 deadline.
(3)  The Member States should modify the measures concerned 
so as to rectify the weaknesses listed in paragraphs 44 to 
67 by implementing the bottom-up approach in consulta -
tion with stakeholders on site. The Commission’s evaluation 
report should also serve to identify ineffective measures 
whose design could be improved.Could not be verifiedRecommendation no 3 which was mostly addressed 
to the Member States, cannot be verified within the 
framework of a limited follow-up review at Commission 
level. However, the Commission’s evaluation report 
identified measures that do not attain their objectives 
(§4.3.1) and proposed improvements to the MSs (chapter 
8), as recommended by the Court.
(4)  The Member States should devise control procedures that 
are suited to each type of measure. In particular, they must 
ensure that their system for identifying farmland is regu -
larly updated. For its part, the Commission should ensure 
that these control procedures work effectively.Implemented in  
most respectsThe Commission’s new multiannual programme for 
2014-2017 includes at least two audits of POSEI/Aegean 
Islands’ schemes every year, the new guidelines for the 
Member States to present control statistics in a more 
transparent way, and the Commission’s ongoing exercise 
of collecting information and carrying out a desk review 
of the control procedures for POSEI and Aegean Islands’ 
schemes. However, audits carried out by the Commis -
sion were not sufficiently frequent in the last years and 
sometimes did not cover the most relevant areas and/
or measures.
(5)  The Commission should use the information provided by 
the Member States to monitor programme performance on 
an annual basis, including information that already exists 
and information yet to be provided in full.Implemented in  
most respectsSince the introduction of the common indicators for the 
POSEI/PIME programmes, the Commission analyses on 
an annual basis the information provided by the Member 
States in the Annual implementation reports. However, 
the MS use of the indicators in their annual reports is 
variable, and their contents require improvement.
27 Annexes  
 Annex VCohesion: Social Fund spending on older workers
1. Special Report 25/2012 concerned the Social Fund and questioned if there are tools in place to moni -
tor the effectiveness of spending.
2. The European Social Fund (ESF) is a key instrument designed to help the Member States achieve EU employ -
ment policy objectives. Its aims are to promote the integration of the unemployed and disadvantaged in the 
labour market, primarily through training activities.
3. The aim of the audit was to verify whether and to what extent the Member States and the Commission de -
veloped and used the tools required to assess whether the objectives planned have been achieved. To this 
end, the Court selected one of the main disadvantaged groups, namely older workers.
28 Annexes  
 Annex VThe Court’s recommendations
Recommendation Implementation status The Court’s assessment
(1)  The Commission should require Member States to design 
their operational programmes (OPs) in such a way that 
the performance of the ESF funds can be measured. The 
target populations should be unambiguously defined 
and relevant, quantified operational goals and indicators 
should be drawn up to measure outputs, results and spe -
cific impacts at target population group level. Intermediate 
milestones should be set and a hierarchy of target values 
established. The OPs’ result and specific impact goals 
should be incorporated at project level, as this would assist 
achievement of the OP target values and enable payments 
to be linked to performance.Implemented in most respects
These two recommendations were implemented in most 
respects. The measurement of performance is at the 
heart of the 2014-2020 regulation and common output 
and result indicators have been made compulsory for 
the more usual policies. However, apart from young 
unemployed, the focus is still not on the target groups 
assisted and on measuring the effectiveness of the 
actions at target group level. The Commission still has to 
prove that it monitors the results at project level and the 
performing of counterfactual evaluations.(2)  The Commission should require Member States to design 
their monitoring and evaluation system in such a way that 
the progress towards all target values set can be measured 
in a timely and understandable way, at appropriate inter -
vals, thereby allowing corrective actions to be taken and 
lessons learned for future decision-making. Such a design 
requires the timely collection of relevant and verifiable 
data, the proper functioning of electronic data processing 
systems, ongoing evaluations, also at target group level, 
and, for the ESF actions aimed at increasing employment, 
the measurement of the net employment effect.Implemented in most respects
(3)  For the Commission to provide appropriate data on the 
means mobilised and the results achieved by the ESF it 
must obtain consistent and reliable information from the 
Member States. More specifically, the Commission should 
issue mandatory common indicators to be included by the 
Member States in their OPs; the EU priority themes should 
be in line with EU strategies and their content clearly 
defined by the legislator.Fully implementedThe 2014-2020 ESF was aligned with the Europe 2020 
strategy and mandatory common output and result 
indicators were introduced.
(4)  The Commission should analyse in depth performance 
issues when organising the assessment of the management 
and control systems.Fully implementedThe planned audits on performance data and the issued 
guidelines for the auditors indicate a shift towards 
accountability for having a reliable system for collecting, 
recording and storing performance data.
(5)  The Commission should improve the documentation of its 
checks by ensuring that there is an audit trail that allows 
the extent and consistency of these checks to be assessed.Fully implementedThe newly created 2014-2020 checklists improve the 
documentation and coverage of actions.
29 Annexes  
 Annex VIExternal actions: contributions channelled through UN organisations
1. Special Report 3/2011 concerned the efficiency and effectiveness of EU contributions channelled 
through UN Organisations in conflict-affected countries.
2. The European Commission has intensified its cooperation with the United Nations as part of its commit -
ment to the better coordination of aid. The amount of EuropeAid funds channelled through United Nations 
Organisations increased from 144 million euros in 2001 to 935 million euros in 2009, reaching a peak of over  
1 billion in 2006.
3. This is the second phase of a two-part audit. The second phase evaluates the achievement of objectives.
4. The overall audit question was whether the Commission achieves value for money when channelling funds 
through the United Nations.
30 Annexes  
 Annex VIThe Court’s recommendations
5. The Court recommended that the Commission should make the following changes in project design, effec -
tiveness and sustainability, and efficiency:
Recommendation Implementation status The Court’s assessment
(1)  The Commission should make the following changes in 
project design:
 ο ensure that clear practical objectives are set for the projects 
to which their funds are committed. Objectives should be 
quantified where possible to facilitate the execution and 
monitoring of the projects and to provide useful feedback 
for the Commission. The link between the projects’ 
activities, the projects’ objectives and the wider objectives 
should be clearly specified;
 ο better adapt the timeframe set out in the contribution 
agreement to the project environment to avoid timely and 
costly extensions of the implementation period at a later 
stage;
 ο as the level of detail in the budget forms the basis for 
subsequent reports, it should include all information neces -
sary to assess in particular the efficiency of the activities 
funded.Fully implementedThe 2011 new Joint Guidelines on reporting obligations 
under the FAFA:
 ο recalled the requirement that indicators have to be 
SMART, that the reports should allow comparisons 
with every aspects of the initial description of the 
action, and should give a useful feedback (knowl -
edge management) to the Commission on actions 
of the same kind;
 ο stressed the importance of the detailed work plans 
and set out the principles to ensure their updates;
 ο set out principles and procedures to ensure that 
every detail in the budget is understood by the UN 
organisation and the Commission in the same way 
and that the level of information is sufficient to al -
low comparison with the description of the action.
The guidelines are recalled in each joint EU/UN training. 
The requirements are also explained during regular 
training sessions.
(2)  The Commission should make the following changes in 
effectiveness and sustainability:
 ο insist on receiving the necessary reports on time and 
continue its efforts to ensure that these reports give the 
information that it needs for assessing the progress and 
success of the projects;
 ο the follow up by the Commission should be prompt, sys -
tematic, clearly evidenced and comprehensive throughout 
the project duration;
 ο identify, following each project, the lessons learnt for 
future interventions having special regard to the aspect of 
sustainability.Fully implementedThe guidelines:
 ο stressed the importance to deliver timely reports 
based on detailed work plans and set out principles 
to ensure that these reports are not delayed,the 
Commission is kept informed, and that they give 
every detail needed for assessing the implementa -
tion of the actions;
 ο set out principles and procedures to ensure that 
the necessary information is transmitted to the 
Commission in due time, with the relevant analyses 
and remedies of any difficulty when it occurs;
 ο contained (in the latest version of the template 
for action documents) a mandatory sub-section 
dedicated to the lessons learnt and to the sustain -
ability of the action.
31 Annexes  
 Annex VIRecommendation Implementation status The Court’s assessment
(3)  The Commission should make the following changes in 
efficiency:
 ο A systematic assessment of the costs should be performed 
and the results should be adequately documented. More 
focus should be put on efficiency and the assessment of 
costs should not be limited to questions of eligibility;
 ο Where feasible, benchmarks should be developed for com -
mon cost items in order to facilitate the assessment of costs 
in project proposals and financial reports.First point fully implemented
Second point implemented in  
some respectsThe guidelines set out principles and procedures to en -
sure that the level of information is sufficient to enable 
the assessment of the eligibility and also the necessity 
of the proposed costs and to allow comparison with the 
description of the action.
Recommendation 3, Point 2 on developing benchmarks for 
common cost items (implemented in some respects).
The Commission has instructed authorising officers to 
assess the reasonableness of the costs when funding 
projects. Some EU delegations establish costs compari -
sons from local economic studies. In addition, the Com -
mission requests the authorising officers to justify, when 
registering grants and contracts in CRIS, the reasons for 
choosing to contract with an international organisation.
However, the Commission does not directly assess the 
reasonableness of the projects costs but relies on the 
market knowledge of the international organisations it 
contracts with.
‘Where feasible’ in the text of the recommendation has 
to be understood as ‘Where similar cases and where 
information could be reasonably accessible’. A final cost 
is the result of quantities and unit costs. If the latter are 
unknown, at least quantities can be compared to that of 
similar actions funded in the past for assessing the rea -
sonableness of a new action to fund. Without this, the 
Commission relies on a third party declaration without 
any verification, while it has relevant documentation in 
its possession.
32 Annexes  
 Annex VIIExternal actions: food security
1. Special Report 1/2012 concerned effectiveness of EU development aid for food security in  
sub-Saharan countries.
2. Food security is a major problem in sub-Saharan Africa, where 30 % of the population suffer from hunger.
3. The Court examined whether European Union (EU) development aid for food security in sub-Saharan Africa 
is effective: whether EU development aid for food security is relevant to the countries’ needs and priorities 
and whether the EU interventions are effective.
4. The audit focused on EU direct development support for the three dimensions of food security, i.e. food 
availability, access to food and utilisation of food (nutrition). It did not examine whether food security was 
mainstreamed in all relevant areas of EU cooperation, such as health, education, or water and sanitation.
33 Annexes  
 Annex VIIThe Court’s recommendations
Recommendation Implementation status The Court’s assessment
(1)  The Commission and the European External Action Service 
should carry out a structured assessment of the food secu -
rity situation in each country and systematically consider 
the potential scope for EU support in this area (for the 
programming period after 2013).Fully implementedThe assessment has resulted in the production of 50 
detailed food security country fact sheets based on 
international indicators mainly from UN agencies (FAO, 
Unicef…) and NGOs. These fact sheets give a global 
overview of each country with calculated indicators and 
cover the context of the food security, such as the devel -
opment index of the country, nutritional, environmental 
and agricultural situations.
(2)  The Commission and the European External Action Service 
should examine, possibly with other development partners, 
the feasibility of a permanent instrument for financing 
urgent and supplementary measures that may be required 
to address the consequences of potential future food-crises 
in developing countries.Fully implementedCommission services have developed a food security 
mechanism and a methodology with an indicative budg -
et of 525million euros (2014-2020) based on a technical 
analysis of food and nutrition insecurity, to be applied 
on an annual basis to identify countries and propose 
spending. This mechanism should provide quite similar 
results to those of a permanent instrument.
(3)  The Commission and the European External Action Service 
should give adequate priority to nutrition when defi-  
ning the cooperation strategy, identifying and designing 
interventions, and using policy dialogue with partner 
governments, notably in the framework of budget support 
programmes.Fully implementedThe Commission has given a clear political impetus 
when announcing a 3.5 billion euro financial support 
together with specific objectives to achieve in the fight 
against under-nutrition. The Action Plan on Nutrition 
details how this financial support will be implemented.
(4)  In addition, the Commission should: set out intervention 
objectives that are sufficiently precise and measurable 
through performance indicators. It should ensure that the 
objectives are achievable by better assessing the risks and 
assumptions concerning the successful implementation of 
interventions.Fully implementedThe reference documents provide for measurable objec -
tives and specific indicators together with the related 
methodology for implementing them. These documents 
also present the strategic priorities based on a risks and 
challenges analysis.
Several activities aiming to inform and train the 
relevant actors in the fight against hunger are regularly 
organised.
(5)  The Commission should better support the financial sus -
tainability of agriculture and social transfer programmes. 
In doing so, the Commission should place more emphasis 
on the development of effective agricultural extension 
services, post-harvest infrastructure and rural credit.Fully implementedThe Commission is contributing to forums and organisa -
tions dedicated to specific services to the benefit of 
farmers. (This is recommendation 5(a) in SR 1/2012)
(6)  The Commission should better support the financial sus -
tainability of agriculture and social transfer programmes. In 
doing so, the Commission should ensure that social transfer 
programmes provide for adequate support to the develop -
ment of income-earning capacities of the beneficiaries.Fully implementedThe reference document ‘Social Transfers in the fight 
against hunger’ sets out methodologies, priorities, 
objectives, targets and well defined key indicators. 
This document makes reference to practical documents 
which may support every aspect of the process.
Information and training of the relevant actors are 
regularly organised. (This is recommendation 5(b) in SR 
1/2012)
34 Annexes  
 Annex VIIIExternal actions: CRIS
1. Special Report 5/2012 concerned the Common External Relations Information System (CRIS).
2. CRIS is the information system put in place by the Commission to support the management of external 
actions.
3. It provides data concerning the different phases of management, from programming to preparation and 
monitoring, covering both operational and financial aspects of the actions concerned. It also feeds financial 
data into the Commission’s accounting system ABAC.
4. In Special Report 5/2012, the European Court of Auditors (ECA) assessed whether CRIS was effective in re -
sponding to the Commission’s information needs. In particular, the Court assessed whether CRIS had been 
designed to respond effectively to the Commission’s needs and whether the information that it provided 
was reliable.
35 Annexes  
 Annex VIIIThe Court’s recommendations
5. The Court made the following four recommendations:
Recommendation Implementation status The Court’s assessment
(1)  The intended role of CRIS as an information system should 
be set out, notably with regard to the Commission’s ABAC 
accounting system. In particular, the Commission should 
aim to reduce the duplication of ABAC functions in CRIS.No longer relevantThe intended role of CRIS as an information system, no -
tably with regard to the Commission’s ABAC accounting 
system, still remained to be set out.
(2)  CRIS data code lists should be rationalised so that they 
are unique and their data values are mutually exclusive. 
Moreover, present data quality controls (checks, processes) 
should be revised and reinforced for effective safeguards 
ensuring reliable data. These measures should aim, in 
particular, to ensure that CRIS is effective and efficient in 
providing aggregated information by beneficiary country, 
policy area and financial instrument.Implemented in most 
respectsSeveral initiatives were ongoing by DG International 
Cooperation and Development to rationalise CRIS data 
code lists (development of a reference data system, ra -
tionalisation of data codes, and establishment of a data 
dictionary). However, initiatives for the rationalisation of 
CRIS data codes remained to be finalised.
CRIS data quality controls were reinforced: e.g. a data 
quality strategy and a data quality master plan were 
defined, and a data quality team was assigned.
(3)  Taking into account the large and diverse population of 
CRIS users, proper attention should be paid to improving 
the system’s user friendliness in future CRIS developments.No longer relevantMost projects to improve CRIS’s user friendliness were 
stopped at the beginning of 2013, pending the adoption 
and implementation of DG International Cooperation 
and Development’s new IT strategy.
(4)  Responsibilities for the management of CRIS data security 
should be established. An overall IT risk assessment should 
be carried out. Due care should be given, particularly to the 
protection of personal and financial data.Implemented in some 
respectsResponsibilities for the management of CRIS data 
security were clarified.
Between 2012 and 2014, some limited IT risk as -
sessments activities were carried out but an overall 
assessment of IT risks at DG International Cooperation 
and Development are still missing. Without such an 
assessment, there was no clear overview of the risks 
related to the protection of personal data and financial 
data in DG International Cooperation and Development’s 
information systems.
36 Annexes  
 Annex IXInternal policies: State aid
1. Special Report 15/2011 asked if the Commission’s procedures ensure effective management of State 
aid control.
2. State aid is defined in Article 107 of the Treaty on the Functioning of the European Union (EU), and its control 
is an important guarantee for the functioning of the internal market. The Commission has overall responsibil -
ity for the control of state aid. In order to ensure that state aid granted by Member States is compatible with 
the internal market of the European Union, EU Member States are required to first notify the Commission of 
aid measures and to obtain the Commission’s permission before giving state aid.
3. Our special report examined whether the Commission has implemented procedures that enable effective 
management of state aid control. The audit focused on the organisation, decision-making and monitoring 
processes of the Commission during the period 2008-2010.
37 Annexes  
 Annex IXThe Court’s recommendations
4. We recommended that the Commission should review the allocation and use of the resources devoted to its 
management of state aid, with a view to:
Recommendation Implementation status The Court’s assessment
(1)  Adopting a more proactive stance in its relationship with 
Member States and making more efforts to raise aware -
ness about state aid rules by spreading best practices and 
providing more practical guidance.Fully implementedDG Competition launched a series of initiatives, includ -
ing creating of Network of Country contact points, 
organising training sessions and high level meetings 
with Member States, publishing guidance on the notion 
of state aid, and creating a platform where Member 
States can pose questions about the interpretation and 
implementation.
(2)  Stepping up its monitoring activities, both in terms of 
sample size and scope.Fully implementedThe Commission has gradually stepped up its monitoring 
activities, both in terms of sample size and of involve -
ment of the case-handling units.
(3)  Organising its ex officio enquiries in a more systematic and 
targeted way to detect illegal aid.Fully implementedAdoption and use of new legal instruments in tax 
inquiries leading to the opening of several in-depth 
investigations.
(4)  We also recommended that the Commission should: With 
a view to increasing transparency and speeding up the 
decision process, make a binding commitment to close 
the preliminary investigation by either taking a decision 
or opening a formal investigation procedure within 1 year 
after having received the initial notification.Not implementedAlthough the Court welcomes the increased manage -
ment attention for preliminary investigations that are 
pending for over 9 months, the current legal framework 
still allows the Commission to continue the preliminary 
investigation for as long as it considers the notification 
to be incomplete and to postpone the opening of a more 
transparent formal investigation procedure.
(5)  Minimise the number of requests for information sent to 
Member States and limit them to those strictly needed for 
its decision-making.Fully implementedDue to the continuous reporting on backlogs to the 
Deputy Director-General responsible for state aid and 
the need for his approval when asking for additional 
information for the third time, the required limitation of 
the number of requests sent to Member States has been 
put in place.
(6)  In order to provide more legal certainty to all stakeholders, 
deal swiftly with unfounded complaints.Implemented in most respectsThe filters introduced by Article 20 of the new proce -
dural regulation should significantly reduce the number 
of unfounded complaints. Nevertheless, the impact of 
this amendment is not yet fully visible.
(7)  Periodically inform the complainant, the Member State and 
the beneficiary about the progress (or lack of progress) of 
each case and about the outcome of the investigation.Fully implementedIn order to periodically inform the complainant, the 
Member State and the beneficiary about the progress 
of each case, information letters are now being sent, as 
recommended.
38 Annexes  
 Annex IXRecommendation Implementation status The Court’s assessment
(8)  Consider whether there are any lessons it could learn from 
its handling of the financial crisis to improve its normal 
working methods.Fully implementedDG Competition has given due consideration to the 
lessons learned from its handling of financial crisis 
measures. The main lesson learned was the need to 
speed up the analysis and decision process. Within the 
framework of its State Aid Modernisation (SAM) project, 
DG Competition has taken several measures to speed up 
the decision and analysis process of non-crisis cases.
(9)  Implement an enhanced system of time recording and 
management reporting to effectively monitor the time 
spent on each of the cases and the workload of each case 
handler so as to optimise the use of resources.Fully implementedDG Competition has implemented an enhanced system 
(the PETRA: Project Expense Time Reporting Application) 
for time and management reporting.
(10)  We also recommended that the Commission should: 
Improve the efficiency and reliability of its data gathering 
process.Implemented in  
some respectSARI (State Aid Reporting Interface) as tool of com -
munication between MS and DG Competition became 
operational at the end of 2012, although there are still 
improvements on the reliability of the system to be 
introduced, including (a) validation rules to avoid the 
input of incomplete information by the MS, (b) recording 
users’ different validation actions, and (c) improvement 
of the search functionalities.
(11)  Regularly assess the ex post impact of state aid and of 
state aid control on companies, markets and the overall 
economy.Fully implementedMeasures taken in the field of assessing the ex post  
impact of state aid comprised the publication of 
a common methodology for state aid evaluation and 
the introduction in the new state aid guidelines of the 
possibility to require evaluations.
Note: this recommendation was originally rejected by 
the Commission.
39 Annexes  
 Annex XGeneral criteria for an effective follow-up system
Questions RequirementsRAD
Fully metPartially 
metNot met
1.  Is the system designed to 
provide the information 
needed?(a) The role of the system in the Commission’s information systems 
architecture is defined, documented and approved. X
(b) Information needs are identified, analysed and documented in 
a systematic way. X
(c) The architecture and design of the system is documented and reflect 
the needs identified. X
2.  Is this system designed to 
comply with financial infor -
mation systems documenta -
tion requirements?(a) The technical documentation of the system includes a description of 
the content of each data field. X
(b) The technical documentation of the system includes a description of 
how the system treats each individual operation. X
(c) The system guarantees the existence of a complete audit trail for 
each operation. X
3.  Is the system designed to 
comply with information 
confidentiality, availability 
and integrity requirements?(a) Technical and organisational measures to ensure confidentiality are 
identified and documented, taking into account the cost of their 
implementation and the risks represented by the processing and the 
nature of the data in the system. X
(b) Procedures for the allocation, maintenance and removal of access 
rights is approved and documented. X 
(c) Objectives are set, approved and documented for the availability 
level of the system. X
(d) Availability is monitored and reported on and appropriate actions are 
taken to meet the objectives. X
(e) A data backup plan is approved and documented; it is implemented 
and tested regularly. X
(f) A disaster recovery plan is approved and documented. X
(g) Where appropriate, business rules (automatic input controls) are 
enforced by the system to improve transactions data quality. They 
are complemented by adequate ‘manual’ controls. X 
(h) Relevant data categories are created and guidelines are provided to 
facilitate and ensure consistent input, retrieval, statistical analysis 
and reporting of data by the users. X 
(i) Data quality is monitored regularly at system level and appropriate 
actions are taken to correct the weaknesses identified in a controlled 
manner.N/A1
(j) Management reports and indicators relying on the data in this 
system are subject to adequate quality control. X 
1 Based on available information we could not check these criteria.
40 Annexes  
 Annex XQuestions RequirementsRAD
Fully metPartially 
metNot met
4.  Is the system designed to be 
user-friendly?(a) Complete and up-to-date user documentation or help files are avail -
able X
(b) User satisfaction is monitored on a regular basis and user feedback is 
taken into account. X
(c) Effective data search and reporting tools are readily available for the 
users to retrieve information. X
5.  Is the information provided 
by the system complete?(a) All transactions are captured once and only once. X
(b) All relevant data fields are filled in. X
6.  Is the information provided 
by the system consistent?The same data do not receive different values in other parts of the IT 
information system (IT-internal consistency).X
7.  Is the information provided 
by the system correct?The information recorded in the system reflects the real situation (paper 
file or direct observation on the spot).X
8.  Is the information provided 
by the system up to date?The information is captured by the system in due time. X
41 Reply of the  
Commission
Executive summary
IV
The Commission is committed to ensuring that recommendations made by the Court in its special reports and 
accepted by the Commission are systematically implemented and followed up.
The Commission highlights that the 3 % of the recommendations which were assessed as ‘not implemented’  con -
cern only one recommendation of the Special Report 15/2011, which was rejected by the Commission.
V
The procedures within the RAD (Recommendation, Action, Discharge) application are in place, documented and 
available. Data is encoded under the responsibility of the relevant directorates-general (DGs) and services follow -
ing clear rules for relevant inter-service consultations, validation and approval workflows at appropriate hierarchical 
level. The DGs and services have the possibility to upload supporting documents to their replies. The RAD applica -
tion provides also the possibility to indicate the state-of-play of the actions taken by the Commission. The addit-  
ional recommendation status ‘partially implemented’  was delivered and is functioning. However, the Commission 
and the Court may conclude differently on the effective implementation of the recommendations.
The Commission reports on the follow-up of the Court’s recommendations addressed to the Commission in the 
annual activity reports of the DGs and services and in the annual report from the Commission to the European Parl-  
iament and the Council on the follow-up to the discharge of the relevant financial year.
VI
The Commission considers that its control arrangements are in line with international control and best practices.
However, the Commission is committed to address further challenges concerning the discharge follow-up system 
and procedures.
Reply of the Commission 42
Introduction
03
The Commission is committed to ensuring that recommendations made by the Court in its special reports and 
accepted by the Commission are systematically implemented and followed up. The additional recommendation 
status ‘partially implemented’  was developed and delivered by the system provider within the Commission and is 
available.
The Commission’s implementation of 44 recommendations
09
The Commission’s discharge follow-up system and procedures cover all special reports issued by the Court which 
are relevant for the Commission.
11
The Commission is committed to ensuring that recommendations made by the Court in its special reports and 
accepted by the Commission are systematically implemented and followed up.
The Commission highlights that the 3 % of the recommendations which were assessed as ‘not implemented’  con -
cern only one recommendation of the Special Report 15/2011, which was rejected by the Commission.
Box 1 — Improved regulation and monitoring (see Annex II  and III)
The limited influence of the Commission on prices is the logical consequence of the market-oriented approach and 
the shift in the common agricultural policy (CAP) from price support to income support as decided by the European 
Parliament and the Council.
Monitoring sugar prices is only a part of the overall assessment of the sugar market aiming to achieve the objectives 
of both the CAP and the 2006 sugar reform. These objectives do not refer to influencing prices.
Reply of the Commission 43
Audit of the Commission’s follow-up systems and procedures
Common Commission’s reply to paragraphs 13 and 14
The Commission’s framework for internal control and related control arrangements were developed specifically for 
its environment. They are based on international good practice and inspired by the framework of the Committee of 
Sponsoring Organisations of the Treadway Commission (COSO).
The Commission’s framework for internal control clearly allocates the responsibility to management for systemic 
follow-up of significant issues identified through the supervisory activities.
15
The Commission highlights that the practice advisories are a recommended guidance as per the International Pro -
fessional Practices Framework (IPPF) issued by The Institute for Internal Auditors (The IIA).
See also Commission’s reply to paragraph 28.
18
See Commission replies to paragraph 28.
20
The RAD application was designed for the needs and purposes of the discharge procedure. It provides reliable, 
relevant and pertinent information that demonstrates the status of the actions undertaken by the Commission in 
relation to the follow-up of the discharge. It has been continuously improved based on inter alia recommendations 
made by the Court and requests by Commission services. When deciding on future developments of RAD, the Com -
mission will continue taking into account recommendations made by the Court.
20(a) 
The procedures within the RAD application, including the links to special reports issued by the Court and Commis -
sion’s services in charge for the implementation of the recommendations are in place, documented and available. 
All data is encoded on the responsibility of the relevant DGs and services following clear rules for relevant inter-ser -
vice consultations, validation and approval workflows at appropriate hierarchical level. The DGs and services have 
the possibility to upload supporting documents to their replies.
20(b) 
In compliance with its internal control framework and related control arrangements, and for the specific cases in 
shared management where it has a supervisory role to play, the Commission will adequately review significant 
issues with the Member States. The joint Commission Court Working Group has as an objective to explore ways to 
better monitor, implement and report on the follow-up of the Court’s recommendations.
Reply of the Commission 44
20(c) 
The Commission and the Court may conclude differently on the effective implementation of the accepted SRs’ rec -
ommendations. The RAD application provides the possibility to indicate the state-of-play of the action taken by the 
Commission services, including vis-à-vis the expected completion date.
20(d)
The Commission reports on the follow-up of the Court’s recommendations addressed to the Commission in the 
annual activity reports of the DGs and services and in the annual report from the Commission to the European Par -
liament and the Council on the follow-up to the discharge of the relevant financial year.
The Commission, however, acknowledges that further improvements in the reporting may be achieved.
21
By note dated 16 October 2014 concerning the release of version 6.4 of the RAD application, the DGs and services 
were provided with clear instructions on the new functionality of ‘partially implemented recommendations’ . 
Raising awareness and training concerning the new recommendation status ‘partially implemented’  was ensured 
at the level of all DGs and services.
The Commission is of the opinion that this new functionality is used by the DGs and services, if and where 
applicable.
22
The Commission is committed to ensuring that accepted Court’s SRs recommendations are systematically imple -
mented and followed up.
The Commission and the Court may conclude differently on the effective implementation of the recommendations. 
The Commission acknowledges that further improvement in the follow-up process may be achieved for recommen -
dations for which the two institutions share the conclusions on the implementation status.
23
As stated in the Commission’s reply to paragraph 26 of the follow-up report in 2013 (SR 19/2013), harmonising the 
categories for assessing the actions that address the Court’s recommendations and that are used by the Commis -
sion and the Court may be one of subjects for future discussions between the two institutions.
Reply of the Commission 45
Best practices regarding other systems and procedures
25
The RAD application was developed to manage the inter-service coordination in the discharge procedure, the 
relevant Commission’s replies over the years and the related organisation of the inter-service cooperation within 
the Commission. Even though further improvements and IT developments may be achieved, the Commission is of 
the opinion that the RAD application is an adequate tool for supporting the accountability and governance require -
ments in relation to the discharge procedure.
Conclusion and recommendation
26
The Commission is committed to ensuring that recommendations made by the Court in its special reports and 
accepted by the Commission are systematically implemented and followed up.
The Commission’s discharge follow-up system and procedures cover all SRs issued by the Court which are relevant 
for the Commission.
27
See Commission replies to paragraphs 20(a), 20(b) and 20(c).
28
The Commission considers that the RAD application provides a global view of all recommendations and requests 
addressed to the Commission in relation to the discharge procedure.
As stated in the Commission’s reply to paragraph 26 of the Follow-up Special Report 19/2013, harmonising the cat -
egories for assessing the actions that address the Court’s recommendations and that are used by the Commission 
and the Court may be one of the subjects for future discussions between the two institutions.
As regards the follow-up of the Court’s recommendations, the Commission has taken the decision that this is a man -
agement responsibility and if allocated to the IAS it would risk compromising IAS’ independence. 
Reply of the Commission 46
29
The Commission considers that its control arrangements are in line with international control and best practices. 
However, the Commission is committed to address further challenges concerning the discharge follow-up system 
and procedures.
See also Commission reply to paragraph 28.
29(a)
The Commission accepts this recommendation.
The Commission will assess the possibility to improve the information on the implementation status of the actions 
taken.
29(b)
The Commission accepts this recommendation for the specific cases in shared management where it has a supervi -
sory role to play. The Commission will adequately review significant issues with the Member States. The joint Com -
mission Court Working Group has as an objective to explore ways to better monitor, implement and report on the 
follow-up of the Court’s recommendations.
29(c)
The Commission accepts this recommendation.
The Commission is committed to further improve the reporting of the actions in the annual activity reports.
29(d)
The Commission accepts this recommendation.
The Commission will undergo a follow-up with all DGs and services concerned.
Reply of the Commission 47
Annexes
Annex II
Agriculture: management instruments applied to the market in milk and milk products
Replies of the Commission to the Court’s recommendations (2) 
The Commission considers this recommendation to be fully implemented.
The creation of (new) producer organisations requires time and a strong dynamic coming from farmers themselves 
e.g. to create producers organisations and in a next step to start collective negotiations. Favourable market devel -
opments and prospects in 2012 and 2013 might not have stimulated farmers to join in producer organisations.
In addition to numerous discussions with Member States at Commission and Council level regarding the imple -
mentation of the ‘Milk Package’ at Member State level (by authorities and stakeholders), the Commission actively 
promoted the measures among stakeholders, notably farmers and farmers organisations, on numerous formal and 
informal occasions (e.g. presentations made by Commission representatives at meetings and events).
The ‘Milk Package’ was discussed with stakeholders on a regular basis in the Advisory Groups for Milk, where farm -
ers’ organisations (Copa-Cogeca, European Coordination Via Campesina, European Milk Board) hold an important 
number of chairs. Also in the joint meetings of the Management Committee and the Advisory Group on Milk held in 
2011 and 2012 the Milk Package was discussed. The Commission also participated in two seminars (in 2012 and 2014 
organised by Copa-Cogeca on the implementation of the Milk Package encouraging farmers (organisations) to take 
advantage of the milk package (producer organisations, etc.). In addition, at the conference ‘THE EU DAIRY SEC -
TOR: DEVELOPING BEYOND 2015’ held in 2013 and representing all stakeholders, the Milk Package was among the 
discussed subjects.
Replies of the Commission to the Court’s recommendations (3) 
The Commission considers this recommendation to be fully implemented.
In line with the subsidiarity principle the legislators considered that identifying types of farming or agricultural sec -
tors to be supported by direct payments due to certain difficulties they encounter is of the exclusive responsibility 
of the Member States. They were thought to be in the best place to identify regions or sectors with difficulties on 
their territory and to fix priorities among various needs for targeted support, taking also into account the sector 
specialisation of the regions.
The legislators provided that Member States shall include in each rural development programme a SWOT analysis 
of the situation and an identification of the needs that have to be addressed in the geographical area covered by 
the programme. A description of the strategy demonstrating that specific needs linked with specific conditions 
at regional or sub-regional level are taken into account and concretely addressed through adequately designed 
combinations of measures or thematic sub-programme has to be included. It is for Member States to indicate weak -
nesses and threats if need be for the milk sector and to supply measures to farmers to help them meeting needs.
As regards cross compliance and the new greening of direct payments, there is a need to leave to Member States 
a certain margin of manoeuvre to allow them taking into account local needs and constraints as well as specific 
environmental issues. This principle therefore was and continues being followed in the EU legislation.
Reply of the Commission 48
Annex III
Agriculture: reform of the sugar market
Replies of the Commission to the Court’s recommendations (3) 
The Commission considers this recommendation to be fully implemented.
One of the objectives of the 2006 sugar reform was to comply with Union’s obligations flowing from international 
agreements and to reflect international arrangements, such as the Duty Free Quota Free access for the Least Devel -
oped Countries adopted in the pursuit of the Union’s international trade and development policy. Therefore, the 
Court’s assessment that the EU is now a net importer and relies on sugar import cannot be considered as contrary to 
the Treaty objective of assuring availability of supply.
Replies of the Commission to the Court’s recommendations (4) 
The Commission considers this recommendation to be fully implemented.
The Commission has launched an antitrust enquiry and the Member States have made the necessary enquiries on 
competition in the sugar sector. Moreover, based on the simple fact that the 2015 EU sugar prices are at the lowest 
level since the reform, it can be reasonably assumed that the Treaty objective of sugar supply at reasonable prices 
for the consumers is met.
Common reply to recommendations (5) and (6)
In line with the subsidiarity principle, the responsibility for the implementation of these recommendations is with 
the Member States.
Annex IV
Agriculture: specific measures in favour of the outermost regions and Aegean Islands
Replies of the Commission to the Court’s recommendations (1) 
The Commission considers this recommendation to be fully implemented.
The common indicators (as defined in Annex VIII of Regulation (EU) No 180/2014) had to be gathered since the 
presentation of the 2013 annual reports to be presented in 2014. 2013 was a transition year. If some indicators were 
missing in these 2013 reports (70 % of indicators), all the indicators are given in the 2014 reports (received in 2015), 
although some improvements should still be brought in future reports.
Bilateral meetings are held on a regular basis, in particular in the context of programme modifications. It is then 
when the Commission services recall some best practices to be followed by Member States, such as the information 
to be given to beneficiaries as well as the importance given to verifiability and controllability of new measures.
Furthermore, standard reporting forms for POSEI/SAI control statistics to be used as of 2014 reporting have been 
presented to Management Committee of Direct Payments CDP on 9 July 2014 and subsequent exchange of informa -
tion with Member States have been held to adopt guidelines on the collection of these data. These data are now 
included in the annual report.
Reply of the Commission 49
Replies of the Commission to the Court’s recommendations (4) 
The Commission considers this recommendation to be fully implemented.
The Commission stresses that the audit priorities are established according to the central risk analyses in line with 
the available audit resources. The Commission underlines that the audit intensity for POSEI measures has been 
stepped up in the last 2 years where all the relevant Member States and measures (materiality) have been audited.
Replies of the Commission to the Court’s recommendations (5) 
The Commission considers this recommendation to be fully implemented.
The common indicators (as defined in Annex VIII of Regulation (EU) No180/2014) had to be gathered since the 
presentation of the 2013 annual reports to be presented in 2014. 2013 was a transition year. If some indicators were 
missing in these 2013 reports (70 % of indicators), all the indicators are given in the 2014 reports (received in 2015), 
although some improvements should still be brought in the following reports.
The Commission analyses these data on an annual basis and if necessary requests further information from Member 
States to improve some of their data.
Within 2 years, the presentation of the common indicators by the Member States has improved considerably and is 
now done in a comprehensive way.
Annex V
Cohesion: social fund spending on older workers
Replies of the Commission to the Court’s recommendations (1) 
The Commission considers this recommendation to be fully implemented.
Investment priorities in the 2014-2020 ESF regulation define, where relevant, the concerned target groups. A rel -
evant investment priority refers to ‘active and healthy ageing’. When managing authorities select this investment 
priority, to define the specific objective, following for example a country specific recommendation, they must 
define targets for outputs and results at this level. Furthermore, the annual reporting (Annual Implementation 
Report) will include common indicators, which are related among others to age group and labour market status (i.e. 
ESF common longer-term indicator: ‘participants above 54 years of age in employment, including self-employment, 
6 months after leaving’ [the operation]). The Commission considers that it will have sufficient information to meas -
ure the effectiveness of the actions on older workers, the same as for young unemployed.
The principle of shared management — pursuant to which Member States implement the OPs — does not allow for 
a proper monitoring of result targets at project level. However, the common provisions regulation (CPR) — Regula -
tion 1303/2013) allowing the use of simplified costs options (SCOs) — will help managing authorities and beneficiar -
ies to focus on results at project level.
Since 2011, the Commission has organised awareness-raising and capacity-building events with Member States 
on conducting counterfactual impact evaluations. In order to provide methodological support to Member States, 
a Centre for Research on Impact Evaluation was set up in 2013 at the Joint Research Centre in Ispra.
Reply of the Commission 50
There have been recurrent discussions on this topic with the managing authorities in the framework of the ESF 
Evaluation Partnership.
The Commission funded eight pilot counterfactual impact evaluations on ESF interventions in Spain, Italy (two pro -
jects), Estonia, Portugal (two projects), Lithuania and Slovakia. The results have been disseminated in various fora 
and at a Conference in Brussels.
Replies of the Commission to the Court’s recommendations (2) 
The Commission considers this recommendation to be fully implemented.
Data on all indicators — common and programme-specific alike — are submitted as a structured data set to the 
Commission by electronic means as part of the Annual Implementation Reports (AIR), the Youth Employment Initia -
tive report for 2015 and the final report. These data will allow the Commission to monitor annually the progress 
towards target values by target group and achievement ratio can be calculated at the level of investment priorities 
(costs/output/results).
The employment effect will be measured through the related common longer term result indicators. The measure -
ment of net employment effects can be measured by counterfactual impact evaluations.
Managing authorities have to carry out impact evaluation, albeit not necessarily counterfactual evaluations. The 
Commission has however been promoting the use of counterfactual impact evaluations through organising aware -
ness-raising and capacity-building events and setting up the Centre for Research on Impact Evaluation. A series of 
training sessions and regional workshops have been carried out in the Member States. Commission support will 
continue through facilitating and running a community of practice on counterfactual impact evaluation.
Annex VI
External actions: contributions channelled through UN organisations
Replies of the Commission to the Court’s recommendations (3) 
Reply to the second indent:
The Commission considers that the implementation of such information system on benchmarks in conflict affected 
countries is not feasible. The reasons are to be seen both at the level of the difficulty to ensure the consistency of 
data (which needs to be complete, reliable and constantly updated) and as its relatively high cost and negative 
cost-effectiveness relation. Therefore, the Commission believes that this second point of the recommendation is 
implemented.
Annex VIII
External actions: CRIS
Replies of the Commission to the Court’s recommendations (1) 
The intended role of CRIS as an information system, notably with regard to the Commission’s ABAC accounting sys -
tem, has been clarified in the context of the new strategy for the Commission’s information systems.
On 12/06/2014, a new strategy stating the following was endorsed by the Commission:
— CRIS financial functionalities are to be replaced by ABAC to the possible extent following the Commission’s ra -
tionalisation strategy. Evolutive maintenance activities should be frozen for modules to be transferred to ABAC, 
except evolutive maintenance contributing to improving data quality, reporting, implementing simplification- 
related actions and reducing maintenance costs.
Reply of the Commission 51
— CRIS functionalities that cannot be managed in ABAC will be included in a future operational system, based 
on a modern technology answering operational needs, including transparency-related requirements (called 
OPSYS).
This strategy is implemented according to the following roadmap:
— The management of guarantees is exclusively performed in ABAC since 01/01/2014.
— Financial Forecasting: a new tool (BPC) has been implemented since December 2014 and replaces the former 
CRIS forecasting module.
— The financial modules of CRIS (Invoices, Payments, Recovery Orders, Forecast of Revenues) will be phased out 
in April 2016. The financial modules of ABAC will be used as from that date. For the operational modules Con -
tracts and Decisions, a gap analysis is currently ongoing with the aim of its integration into cooperate systems 
(SYGMA, e-procurement).
Replies of the Commission to the Court’s recommendations (2)
CRIS data codes rationalisation is an ongoing activity.
The Commission is currently reviewing the management of regional geographical data. A three-step process is 
currently under review to only allow the encoding of geographical zones at the level of a country (not at the level 
of the regions anymore), to automatically deduct the DAC recipient zone from the beneficiary zone and to ensure 
consistency in the encoding of the action location data.
The Commission is also reviewing the list of domains and will link this reduced list to budget lines currently used by 
different Commission services in CRIS.
Moreover, the rationalisation of CRIS in April 2016 leads to a de facto rationalisation of codes (using ABAC codes).
Replies of the Commission to the Court’s recommendations (4)
The Commission considers the implementation status to have moved towards ‘fully implemented’.
The Commission has signed a specific contract (reference No 84) on 21 October 2014. This assessment highlighted 
security threads, the Commission’s vulnerabilities and defined mitigating actions. A special report focused on the 
security of personal and financial data has been delivered on 18 December 2014. The full security assessment report 
has been delivered on 30 September 2015.

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EUROPEAN
COURTOF AUDITORS
Following up the Court’s special reports is a necessary 
element in the cycle of accountability and helps to 
encourage the effective implementation of 
recommendations by the Commission and the Member 
States. The current report presents the results of the 
Court’s fourth review of the Commission’s follow-up of 
a sample of 44 recommendations from eight special 
reports over the period 2009-2012. Our review showed 
that the Commission implemented 89 % of our 
recommendations in full or in most respects, 8 % in some 
respects, while 3 % were not implemented.
We also recommend that the Commission should carry out 
some improvements to its follow-up practices.