EUROPEAN COMMISSION Brussels, 10.1.2018 COM(2018) 3 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Mid-Term evaluation of the Regulation (EU) No 250/2014 of the European Parliament and of the Council of 26 February 2014 establishing a programme to promote activities in the field of the protection of the financial interests of the European Union (Hercule III programme) and repealing Decision No 804/2004/EC {SWD(2018) 3 final}



1.Introduction The European Commission is currently conducting a reflection about the type of budget that is needed for the Europe of the future . An efficient and proper spending of the Union budget, including in the Member States, is a key element in building trust of the EU citizens and to boost the strength and added value of the European project. The Hercule programme fits that agenda as it is specifically dedicated to protecting the financial interests of the EU. The current Hercule III programme, which is administered by the European Anti-Fraud Office (OLAF) within the Commission, was established by Regulation 250/2014 (‘the Regulation’). The general objective of the programme is 'to protect the financial interests of the Union thus enhancing the competitiveness of the Union's economy and ensuring the protection of taxpayers' money' , whereas the programme's specific objective is 'to prevent and combat fraud, corruption and any other illegal activities affecting the financial interests of the Union' . The Regulation requires that the Commission carries out a mid-term evaluation of the programme (Article 13, paragraph 2(a)). The Commission services prepared a Staff Working Document (SWD) on the mid-term evaluation of the Hercule III programme that contains the evaluation's detailed findings. As the Regulation requires an independent assessment, the SWD was supported by a study carried out by an external contractor. The evaluation's detailed findings and the methodology employed are described in the SWD. In the light of the requirements of Article 13 of the Regulation and the Commission’s Better Regulation Agenda, the evaluation assesses six areas – relevance of all the objectives of the programme; internal and external coherence of the programme with other EU interventions; effectiveness in attaining its objectives and expected results; the efficiency of the use of resources; the programme's EU added value; and sustainability, i.e. the effects of Hercule III actions after their completion. The evaluation also touches upon the programme’s contribution to the Union’s priorities of smart, sustainable and inclusive growth. The time period covered by the evaluation is the first half of the seven year period that Hercule III programme lasts for, starting on 1 January 2014 (when the Regulation entered into force) until June 2017. 2.Key elements of the Hercule III programme The Hercule III budgetary envelope amounts to EUR 104.9 million over the period 2014-2020. The eligible beneficiaries of the programme are national or regional administrations of Member States and research bodies, as well as educational institutes and non-profit-making entities. The programme is implemented on the basis of annual cycles according to work programmes which are adopted by the Commission. Hercule III provides financial support for (i) technical assistance (at least 70% of the programme's budget) for actions such as the purchase of technical equipment and information technology tools, the promotion of cross-border cooperation and support of joint operations, staff exchanges, and the development and provision of access to databases for Member States and OLAF, (ii) training (maximum 25% of the programme's budget) for actions such as conferences and seminars to ensure cross-border exchange of experience and best practices, digital forensics training, and the development of high-profile research activities and studies, and (iii) any other action that falls within the programmes’ remit (not more than 5% of the budget). The programme provides financial support in the form of grants, public procurement contracts and reimbursement of the costs incurred by the participants to the activities. 3.Mid-term evaluation methodology To perform the mid-term evaluation, the Commission services relied primarily on the external contractor’s study, as well as the impact assessment carried out at the time of the legislative proposal for the programme, the Commission’s evaluation of the previous Hercule programme, the annual work programmes of Hercule III, and the annual overviews on the implementation of the programme that are prepared by the Commission and annexed to the Commission annual report on the protection of the Union's financial interests. The work on the mid-term evaluation started in June 2016. An Inter-Service Steering Group (ISSG) of Commission services was set up to support the evaluation process. It reviewed the roadmap, the terms of reference for the external contract, the inception and the end-of fieldwork reports. The ISSG was also closely involved in the preparation of the SWD. The scope of the mid-term evaluation covers the interventions supported under the Hercule III programme as well as the preparatory and implementing activities undertaken by the stakeholders for these interventions. It also covers those applications for grants submitted by potential beneficiaries, which remained unsuccessful. The external study relied upon primary data sources to reply to the evaluation questions collected via (i) interviews of EU and national civil servants, as well as of beneficiaries of actions funded under the programme and (ii) online surveys with beneficiaries, unsuccessful applicants, participants in events funded under the programme, as well as users of services procured under the programme. Secondary data were also used, such as publicly available sources (e.g., the Hercule III annual work programmes) and submitted applications for grants and awarded contracts and grants as well as final reports submitted by beneficiaries. The timing for the external study entailed some limitations mainly related to the normal life-cycle of the programme. This was reflected in the instruments that could be used by the external evaluator who had to rely to a large extent on the opinions expressed by beneficiaries, applicants, participants, and Commission staff. This is because by the time the data collection and the interviews were carried out, that is mostly in 2017, relatively few results were available. This limitation was particularly felt for Technical Assistance actions. However, because the interviewees arguably account for a large sample of the programme's stakeholders, the external study’s results are deemed robust enough.