RESOLUTION OF THE EUROPEAN PARLIAMENT  
of 10 May 2012  
with observations forming an integral part of its Decision on discharge in respect of the 
implementation of the general budget of the European Union for the financial year 2010, 
Section III — Commission and executive agencies  
THE EUROPEAN PARLIAMENT,  
— having regard to the general budget of the European Union for the financial year 2010 (  1 ), 
— having regard to the annual accounts of the European Union for the financial year 2010 (COM(2011) 
473 – C7-0256/2011) (  2 ), 
— having regard to the Commission’s report on the follow-up to the discharge for the 2009 financial year 
(COM(2011) 736), and to the Commission staff working documents accompanying that report 
(SEC(2011) 1350 and SEC(2011) 1351),  
— having regard to the Commission communication of 1 June 2011 entitled ‘Synthesis of the Commis ­
sion’s management achievements in 2010’ (COM(2011) 323),  
— having regard to the Commission’s annual report to the discharge authority on internal audits carried 
out in 2010 (COM(2011) 643), and to the Commission staff working document accompanying that 
report (SEC(2011) 1189),  
— having regard to the Annual Report of the Court of Auditors on the implementation of the budget 
concerning the financial year 2010, together with the institutions’ replies (  3 ) (Annual Report), and to the 
Court of Auditors’ special reports,  
— having regard to the statement of assurance (  4 ) as to the reliability of the accounts and the legality and 
regularity of the underlying transactions provided by the Court of Auditors for the financial year 2010 
pursuant to Article 287 of the Treaty on the Functioning of the European Union,  
— having regard to the Council’s recommendation of 21 February 2012 on discharge to be given to the 
Commission in respect of the implementation of the general budget of the European Union for the 
financial year 2010 (06081/1/2012 – C7-0053/2012), and noting that the United Kingdom, the 
Netherlands and Sweden have for the first time refused to recommend approving discharge,  
— having regard to the Council’s recommendation of 21 February 2012 on discharge to be given to the 
executive agencies in respect of the implementation of the budget for the financial year 2010 
(06084/2012 – C7-0052/2012), and noting that the United Kingdom, the Netherlands and Sweden 
have for the first time refused to recommend approving discharge,  
— having regard to Articles 317, 318 and 319 of the Treaty on the Functioning of the European Union 
and Article 106a of the Euratom Treaty,  
— having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial 
Regulation applicable to the general budget of the European Communities (  5 ), and in particular Articles 
55, 145, 146 and 147 thereof,EN 17.10.2012 Official Journal of the European Union L 286/31  
( 1 ) OJ L 64, 12.3.2010.  
( 2 ) OJ C 332, 14.11.2011, p. 1.  
( 3 ) OJ C 326, 10.11.2011, p. 1.  
( 4 ) OJ C 332, 14.11.2011, p. 134.  
( 5 ) OJ L 248, 16.9.2002, p. 1.
— having regard to Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the statute 
for executive agencies to be entrusted with certain tasks in the management of Community 
programmes (  6 ), and in particular Article 14(2) and (3) thereof,  
— having regard to Rule 76 of, and Annex VI to, its Rules of Procedure,  
— having regard to the report of the Committee on Budgetary Control and the opinions of the other 
committees concerned (A7-0098/2012),  
A. whereas Europe is faced with a severe budgetary and financial crisis which can lead to a crisis of 
confidence in the Union and whereas it is vitally important that the Union is a leading example for 
good public management, through the Commission, which implements the Union budget; whereas good 
public management is necessary in order for the Union to maintain its AAA rating, which is important, 
in particular if it is to honour its commitment to provide EUR 60 000 000 000 in guarantees for the 
European Financial Stabilisation Mechanism,  
B. whereas 2010 was the first full financial year to come under the Lisbon Treaty provisions, with new 
budget procedures and the establishment of the European External Action Service (EEAS), together with 
the European Council Presidency alongside the rotating Council Presidency; whereas it was also the first 
year in the new Europe 2020 strategy,  
C. whereas good governance implies that political goals are set before legal instruments reaching those 
goals are passed and whereas existing legal instruments not fully in harmony with the political goals 
should be modified,  
D. whereas there shall be adequate arrangements for transparency, public accountability and public audit 
where public funds are at stake, whereas for the seventeenth consecutive year the Court of Auditors has 
not been able to issue a positive declaration of assurance on the Union budget,  
E. whereas Article 287(1), second subparagraph of the Treaty on the Functioning of the European Union 
(TFEU) requires the Court of Auditors to provide Parliament and the Council with a statement of 
assurance as to the reliability of the accounts and the legality and regularity of the underlying trans ­
actions, and also provides that that statement may be supplemented by specific assessments for each 
major area of Union activity,  
F. whereas more than 90 % of all errors are identified outside the Commission at the level of Member 
States’ authorities and the level of final beneficiaries (Annual Report, point 1.22),  
G. whereas in the majority of cases where errors were identified in the Cohesion area Member States’ 
authorities had sufficient information to have detected and corrected errors prior to certifying the 
expenditure to the Commission (Annual Report, point 4.25),  
H. whereas it is necessary to differentiate between national authorities having established well functioning 
supervisory and control systems and national authorities bearing responsibility for only partially effective 
systems in order to avoid additional burdens to all Member States,  
I. whereas Member States’ lack of serious interest in the discharge procedure could be due to the Commis ­
sion’s insufficient efforts in identifying publicly, clearly, unequivocally and in a substantiated way which 
Member States, regions and programmes are underperforming in managing Union funds,  
J. whereas mandatory national management declarations issued and signed at ministerial level and duly 
audited by an independent auditor are a necessary mean to counter some national authorities’ lack of 
responsibility as regards the use and management of Union money,EN L 286/32 Official Journal of the European Union 17.10.2012  
( 6 ) OJ L 11, 16.1.2003, p. 1.
K. whereas the increased use of pre-financing by the Commission has implications for the Court of 
Auditors’ audit approach and whereas the Court of Auditors could adapt its methodology to the new 
circumstances in order to ensure the usefulness of the Court of Auditors’ information to the discharge 
authority,  
L. whereas the Union more than ever needs a strong, independent and efficient truly external body of 
auditors, which naturally — and out of respect for taxpayers — means that the Members of the Court of 
Auditors should never be appointed on a political but only on a professional basis,  
M. whereas the use of innovative and complex financial instruments must be counter balanced by full 
transparency, including the publication of comprehensive data of all final beneficiaries, and clear rules 
on reporting in order to avoid any risk to the Union’s budget and reputation,  
N. whereas the Member States shall cooperate with the Commission to ensure that the appropriations are 
used in accordance with the principles of sound financial management,  
O. whereas Member States, even if their structure is federal, bear responsibility to the outside world and the 
Union,  
P. whereas both compliance and performance issues must be better addressed in order to reinforce the 
legitimacy of the Union,  
Q. whereas the continuous development of the Court of Auditors’ statement of assurance over the years has 
been instrumental in identifying areas where Member States’ and Commission’s management needs to be 
improved,  
R. whereas the Court of Auditors has yet again been unable to give a positive statement of assurance 
regarding the legality and regularity of the payments, which is deplorable,  
Priority actions for the Commission  
1. Invites the Commission to present to Parliament an Action Plan for the achievement of the following 
priority actions:  
— close monitoring of the use of Financial Engineering Instruments (FEIs), as described in point 21 of 
this resolution,  
— improvement and strengthening of the reliability of the accountability chain, as described in point 
36 of this resolution,  
— reconsidering the increased use of pre-financing, as described in point 56 of this resolution,  
— creation of an effective sanctioning mechanism in the area of Cohesion policy, as described in 
point 124 of this resolution;  
The Court of Auditors’ statement of assurance  
Accounts — clean opinion  
2. Notes that the annual accounts of the Union for the financial year 2010 present fairly in all material 
respects the position of the Union as of 31 December 2010, and the results of its operations and its 
cash flows for the then completed year;  
3. Notes the emphasis of matter in relation to a change in the Commission’s accounting policy with 
regard to financial engineering instruments (FEIs), which shows that risks of material misstatements 
remain, although the accounts have received an unmodified opinion since 2007; calls on the 
Commission to review annually whether the new treatment adopted reflects fairly the underlying 
reality;EN 17.10.2012 Official Journal of the European Union L 286/33
Legality and regularity of revenue — clean opinion  
4. Notes with satisfaction that revenue underlying the accounts for the year ended 31 December 2010 is 
legal and regular in all material respects;  
Legality and regularity of commitments — clean opinion  
5. Notes with satisfaction that commitments underlying the accounts for the year ended 31 December 
2010 are legal and regular in all material respects;  
Legality and regularity of payments — adverse opinion  
6. Regrets deeply that payments remain materially affected by error;  
7. Understands that the basis for the adverse opinion of the Court of Auditors is the observation that 
supervisory and control systems are only partially effective and — as a result — payments are affected 
by an error rate which is estimated to be most likely 3,7 %;  
8. Recalls that the most likely error rate for payments in the financial year 2009 was estimated to be 
3,3 %;  
9. Is worried about this increase because it reverses the positive trend observed in the past few years; 
calls on the Commission to achieve a trend that shows a consistent decrease in the error rate as 
demanded in previous discharge reports;  
10. Attributes this development mainly to the increase of the most likely error rate in the area of 
Cohesion, Energy and Transport, which marked a significant increase to 7,7 %;  
Horizontal issues  
Financial Engineering Instruments (FEIs)  
11. Recalls that the Commission promotes an increased use of FEIs for the next multiannual financial 
framework (  7 ) despite the fact that the Commission itself considers FEIs to be of high risk (  8 ); under ­
stands that FEIs complement rather than replace existing grant funding and have the potential benefit 
of being able to be used more than once;  
12. Is deeply concerned about the lack of information on the implementation of current FEIs which 
appears to affect all policy areas (Annual Report, points 1.31 and 1.33);  
13. Deplores the absence of formal reporting requirements and acknowledges the Commission’s efforts in 
receiving information on the current use of FEIs from the Member States in the context of the 
European Regional Development Fund (ERDF); welcomes the synthesis report of the information 
gathered by the Commission on ‘Financial Engineering Instruments Implemented by Member States 
with ERDF Contributions — situation as at 31 December 2010’ (Synthesis Report on FEIs) as 
submitted to Parliament’s Committee on Budgetary Control; notes that FEIs with a total commitment 
of approximately EUR 8 100 000 000 have been created and have received payments of approxi ­
mately EUR 5 200 000 000 from 2007-2013 operational programmes by the end of 2010 (Annual 
Report, point 4.32);  
14. Deplores the fact that the Commission received information only on approximately 75 % of the total 
contributions committed to FEIs for enterprises (  9 ); is worried that the information received from 
Member States differed in terms of completeness and accuracy and that a limited number of Member 
States or regions did not provide feedback or did not complete the monitoring reporting templates; 
understands that this makes it impossible for the Commission to cover all FEIs as at 31 December 
2010;EN L 286/34 Official Journal of the European Union 17.10.2012  
( 7 ) COM(2011) 662.  
( 8 ) SEC(2011) 1179, p. 24.  
( 9 ) Synthesis Report on FEIs, p. 6.
15. Underlines that:  
— the exact number and size of specific funds established  
(the Commission estimates that some 92 specific funds in France and Italy, for which no moni ­
toring reports were received or only insufficient information was available, are implemented in 
addition to almost 300 specific funds for which information was available (  10 )), 
— indicators with target levels on the effectiveness of FEIs  
(for example, number of investments in small and medium enterprises, jobs created or safe ­
guarded, additional resources mobilised at enterprise level or specific fund level (  11 )), and  
— indicators on the efficiency and economy of FEIs  
(for example, management costs and whether they provide incentives to make best use of the 
money, information on exits and returns to funds, information on the legacy of the funds after the 
programming period (  12 )), 
are important and indispensable elements for an evaluation of the use of FEIs and regrets deeply that 
this information is not yet fully available;  
16. Notes and deplores the Court of Auditors’ observations mainly in the Cohesion area such as excessive 
endowments to FEIs resulting in circumventing the n + 2 rule (Annual Report, example 4.4(a)), delays 
and slow implementation of the FEIs (Annual Report, example 4.4(b)), irregular winding-up 
requirements (Annual Report, example 4.4(c)), financial contributions paid as advances as soon as 
the legal structure of the FEI has been set up (Annual Report, point 4.34) and problems in performing 
adequate audits on FEIs (Annual Report, points 4.35 and 4.36);  
17. Believes that those observations are rooted in a deficient legal basis for FEIs; is concerned that the 
rules applicable to FEIs do not set appropriate incentives to make effective use of FEIs; is also worried 
that they leave too much room for flexibility for Member States; welcomes, however, recent 
improvements in developing a legal basis for FEIs; highlights the following most important deficiencies 
of the legal basis which was at the time a Council Regulation (  13 ): 
— insufficient provisions to stimulate rapid implementation of FEIs,  
— insufficient provisions on leverage and revolving requirements for FEIs,  
— insufficient provisions to prevent excessive endowments,  
— insufficient provisions to put in place management fee structures giving incentives to make use of 
FEIs in the most efficient way,  
— insufficient provisions on the legacy of the funds at the end of the programming period,  
— unclear eligibility conditions for working capital,  
— possibility for unjustified recourse to preferential private sector treatment;EN 17.10.2012 Official Journal of the European Union L 286/35  
( 10 ) Synthesis Report on FEIs, p. 10.  
( 11 ) Synthesis Report on FEIs, p. 9.  
( 12 ) Synthesis Report on FEIs, pp. 21 and 26.  
( 13 ) Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional 
Development Fund, the European Social Fund and the Cohesion Fund (OJ L 210, 31.7.2006, p. 25).
18. Agrees with the Court of Auditors’ opinion that resources returned to and revenues earned by the 
financial instruments should not be re-directed elsewhere before the closure of the operational 
programme, but should return to the relevant financial instruments (Court of Auditors, Opinion 
No 7/2011 (  14 ), page 11); expects that this recommendation will be seriously considered during the 
legislative procedure concerning the proposal for a regulation of the European Parliament and of the 
Council laying down common provisions on the structural instruments COM(2011) 615 – 
2011/0276(COD));  
19. Is pleased that Articles 130 and 131 of the proposal for a regulation of the European Parliament and 
of the Council on the financial rules applicable to the annual budget of the Union (COM(2010) 815 - 
2010/0395(COD)) will make it possible to stipulate the duration of financial instruments; asks the 
Commission for a summary of the measures which might prevent risks to the Union budget arising 
from the FEIs;  
20. Notes that FEIs are present in other policy areas, too; sees the risk of overlapping and inconsistent 
implementation of these instruments without adequate coordination; invites the Court of Auditors, 
therefore, to audit FEIs horizontally over all policy areas;  
21. Invites the Commission to consider it a priority action to closely monitor the use of FEIs, inter alia, 
by: 
— evaluating objectively and critically the experiences with FEIs in the Cohesion policy for the 
programming period 2007-2013 so far, in particular with regard to the Court of Auditors’ 
observations, including lessons learned and consequences drawn and to report to Parliament on 
the results of the evaluation,  
— providing a risk assessment considering different FEIs separately as well as taking into account the 
risk structure of the beneficiary of the FEIs,  
— completing the process of gathering information from Member States on issues not yet fully 
covered, such as the exact number and size of specific funds and relevant indicators on the 
effectiveness, efficiency and economy of FEIs; developing mechanisms to enforce the reporting 
obligations by Member States,  
— reporting annually to Parliament, in the context of the discharge procedure, on the use of FEIs in 
Member States, including indicators on the effectiveness, the efficiency and the economy of FEIs as 
well as on how the Commission coordinates, ensures consistency and mitigates the risk of 
overlaps across policy areas;  
Responsibility of the Commission and its management representations  
22. Recalls that, pursuant to Article 317 of the TFEU, the Commission implements the Union’s budget on 
its own responsibility; underlines that where the Commission implements the budget by shared 
management, implementation tasks are to be delegated to Member States, in accordance with 
Article 53b of the Financial Regulation;  
23. Stresses once again (  15 ) that the Commission therefore has the  primary  responsibility in the 
management of the Union funds concerned and that, as a consequence, the Commission has the 
obligation to take measures that are aimed at ensuring legality and regularity as well as sound financial 
management;  
24. Stresses that it is not possible for the Commission to transfer its financial responsibility to the Member 
States, even in cases where a managerial weakness or irregularity has been identified at the level of a 
Member State;EN L 286/36 Official Journal of the European Union 17.10.2012  
( 14 ) OJ C 47, 17.2.2012, p. 1.  
( 15 ) European Parliament resolution of 21 April 2004 on discharge to the Commission for the financial year 2002 
(OJ L 330, 4.11.2004, p. 82).
25. Considers that meaningful use of the term ‘shared management’ must be based on the fundamental 
principle that the Union delegates some of its powers to the Member States and that the Member 
States are obliged to carry out their part of the work in accordance with the legal acts of the Union; 
calls on the full implementation of point 44 of the Interinstitutional Agreement of 17 May 2006 
between the European Parliament, the Council and the Commission on budgetary discipline and 
sound financial management (  16 ); believes that annual summaries of the audits and declarations 
available, must be public so as to make a contribution towards improving management of the 
Union budget;  
26. Notes the close link between the Commission’s ultimate responsibility for implementing the budget 
and the significance of the discharge procedure; stresses that the Commission’s final responsibility 
regarding the implementation of the budget also covers weaknesses in Member States’ management 
and control systems;  
27. Stresses that financial responsibility is and shall remain indivisible and recalls Article 53b(4) of the 
Financial Regulation, which provides that ‘in order to ensure that the funds are used in accordance 
with the applicable rules, the Commission shall apply clearance-of-accounts procedures or financial 
correction mechanisms  which enable it to assume final responsibility for the implementation of the budget ’ 
(emphasis added);  
28. Underlines in this context the importance of the Commission’s management representations; notes, 
however, the Court of Auditors’ general observations on the Commission’s Annual Activity Reports 
(AARs) that there was no guidance on the calculation of the residual error rate or residual risk; notes 
further that these elements have gained importance for the question whether a reservation is necessary 
(Annual Report, points 1.19 and 1.20); is worried that this results in inconsistencies in application 
between the Directorates-General;  
29. Notes furthermore, the Court of Auditors’ observations on the following individual AARs:  
— the reservation regarding rural development measures under axis 2 should not have been lifted 
(Annual Report, point 3.53), the calculation of the residual error rates for aid schemes is affected 
by various deficiencies (Annual Report, point 3.54),  
— the estimated amount at risk as presented in the AARs of Directorate-General for Regional Policy 
(DG REGIO) and Directorate-General for Employment, Social Affairs and Inclusion (DG EMPL) 
may be underestimated (Annual Report, Annex 4.3),  
— the calculation of the residual error rate presented in the AAR of Directorate-General for 
Enlargement is limited to 30 % of the payments carried out (Annual Report, point 5.33),  
— the AAR of EuropeAid gives only a partially fair assessment of financial management in relation to 
regularity (Annual Report, point 5.34),  
— the reservation regarding Framework Programme 6 in the AAR of Directorate-General for 
Information Society and Media should have been maintained (Annual Report, point 6.47);  
30. Reminds the Commission that all reservations are included as an annex to the Commission’s Synthesis 
Report and underlines that by adopting the Synthesis Report the Commission ‘takes overall political 
responsibility for the management by its Directors-General and Heads of Service, on the basis of the 
assurances and reservations made by them in their Annual Activity Reports (AAR)’ (  17 ); 
31. Underlines that the College and the Commissioners thereby take the final responsibility for the 
reliability and completeness of the reservations made by the Directors-General and Heads of Units 
acting as ‘Authorising Officers by Delegation’ and stresses that the act of delegation in no way takes 
away final responsibility from the College and the Commissioners;EN 17.10.2012 Official Journal of the European Union L 286/37  
( 16 ) OJ C 139, 14.6.2006, p. 1.  
( 17 ) Synthesis of the Commission’s management achievements in 2010 (COM(2011) 323), p. 2.
32. Notes the observations made by the Court of Auditors concerning the Internal Auditor’s overall 
opinion; believes that without a substantial revisit addressing the Court of Auditors’ concerns, the 
usefulness of the overall opinion will remain limited;  
33. Is worried about the Court of Auditors’ observations with regard to the AARs and the Synthesis 
Report (Annual Report, points 1.17-1.25); believes that those observations need to be addressed 
without delay in order to safeguard the value of those documents as accountability instruments; 
recognises, however, that the calculation of a residual error rate is only one of the methods used 
by the Commission for estimating the amount at risk; calls on the Commission to provide consistent 
guidelines to be implemented by all Directorates-General;  
34. Notes the Commission’s Green Paper on the EU corporate governance framework (  18 ) for the private 
sector; further notes that the Commission has made great progress as regards adequate corporate 
governance within the Commission following the events leading to the resignation of the Santer 
Commission in 1999;  
35. Notes the Commission’s Governance statement adopted on 30 May 2007, which covers the internal 
functioning of the Commission and explains the way it is directed and controlled and the way it 
relates with its stakeholders; encourages the Commission to further improve its corporate governance 
and to inform the discharge authority of actions and measures taken by:  
— incorporating those elements of corporate governance required or proposed by Union company 
law relevant for Union institutions,  
— taking measures allowing the President to sign the accounts and to present together with the 
accounts:  
(i) a description of the risks and uncertainties which could affect the achievement of the policy 
objectives as well as a statement in which the President, together with the College of Commis ­
sioners, accepts responsibility for risk management; and  
(ii) a formal Corporate Governance declaration clearly showing which international standards for 
corporate governance the Commission is adhering to as well as objective and complete 
explanations if there is a need to depart from the corporate governance code’s recommen ­
dation (the ‘comply or explain’ principle);  
36. Invites the Commission to consider it a priority action to improve and strengthen the accountability 
chain, inter alia, by:  
— providing the Committee on Budgetary Control full insight into the Member States annual 
summaries; deplores the fact that the Commission until now has not given any information on 
the annual summaries, as without any knowledge of the content of annual summaries they cannot 
be regarded as national management declarations,  
— delivering a political declaration in which it accepts its final and overall responsibility for the 
implementation of the budget, including the part of the budget which is implemented under 
shared management,  
— adding the responsible Commissioner’s signature to the AAR,  
— establishing the AARs in accordance with the principle of objectivity, avoiding optimistic esti ­
mations,EN L 286/38 Official Journal of the European Union 17.10.2012  
( 18 ) COM(2011) 164.
— providing mandatory, complete and relevant guidance to the Directorates-General, in particular 
regarding the way residual error rates and residual risks are estimated in accordance with the 
principle of prudence,  
— providing in each AAR a complete and reliable explanation of the relationship between the 
residual risk or the residual error rate and the Court of Auditors’ error rate; calls on the 
Commission, in close cooperation with the Court of Auditors, to explore possibilities to align 
its methodology of calculating the residual error rate with the Court of Auditors’ most likely error 
rate methodology,  
— revisiting the methodology for the overall audit opinion of the Internal Auditor and addressing the 
weaknesses identified by the Court of Auditors,  
— analysing whether the Commission’s corporate governance arrangements could be further 
improved taking into account the abovementioned Commission Green Paper on the EU 
corporate governance framework for the private sector;  
European Schools  
37. Regrets that, despite the considerable budgetary means foreseen for the European schools, the latter 
continue to fail in the fulfilment of their main task, which is to provide for sufficient places in the 
required languages and in the vicinity of officials’ places of work and residence, but instead have 
expanded their activities to include other fields of education;  
38. Recognises that an essential problem lies within the decision-making and financing structures of the 
Convention on the European Schools; therefore demands the Commission to explore with the 
Member States a revision of that Convention and to report by 31 December 2012 on the progress 
made; in the meantime, calls on the Commission to push for more efforts to achieve the afore ­
mentioned targets, by way of more appropriate use of the budgetary means provided;  
Commission’s administration  
39. Calls on the Commission to clarify its relocation plans, the costs this will entail, how much office 
space will become available and how much will be added, and the number of staff in each Directorate- 
General who will be affected;  
40. Calls on the Commission to complete, without delay, the reclassification scheme for all the temporary 
staff of the European Anti-Fraud Office on open-ended contracts, as announced by Commissioner 
Šef čovi č in reply to written questions in preparation for this discharge (  19 ); 
41. Points out that in 2010, during the procedure to approve flexitime and compensatory leave as a 
voluntary benefit, the Commission approved around 90 000 additional days of leave for its staff, 
which is the equivalent of some 445 posts — even though Article 56 of the Staff Regulations states 
that overtime worked by AD 5/AST 5 staff shall not be compensated; asks for clarification of the total 
cost to the taxpayer of compensatory leave;  
Responsibility of Member States  
42. Recalls that pursuant to Article 317 of the TFEU the Commission implements the Union budget on its 
own responsibility but also in cooperation with Member States;  
43. Underlines that the two policy areas prone to the highest error rates (‘Cohesion, transport and energy’ 
and ‘Agriculture and natural resources’) are implemented under shared management, and deplores the 
fact that the estimated most likely error rates amount to 7,7 % and 2,3 %, respectively;EN 17.10.2012 Official Journal of the European Union L 286/39  
( 19 ) Commissioner Šef čovi č’s reply to written question No 12 for the hearing of 8 December 2011 before Parliament’s 
Committee on Budgetary Control.
44. Welcomes in this context the Commission’s analysis of the errors reported by the Court of Auditors 
for the financial years 2006-2009, which highlights for the first time the fact that, for ERDF and 
Cohesion Fund, three Member States (Spain, Italy and the UK) have contributed 59 % to the cumu ­
lative quantifiable errors identified during this period and that for the ESF four Member States (Spain, 
Portugal, the UK and Germany) have contributed 68 % to the cumulative quantifiable errors identified 
during this period in the area of Cohesion policy (  20 ); notes that, for ERDF and Cohesion Fund, most 
errors found in Italy came from the regions Calabria, Campania and Puglia and that in Spain a small 
number of operational programmes in the regions Andalucía, Valencia and Castilla-La Mancha 
contributed 75 % to the errors detected in Spain (  21 ); understands, furthermore, that Spain and Italy 
have also contributed significantly to the error rate for the financial year 2010;  
45. Notes that problems in Italy with regard to the ERDF ‘relate to systemic weaknesses identified at the 
level of audit and managing authorities’, and to ‘the application of public procurement rules and 
selection of projects, including the eligibility of retrospective projects’ (  22 ); notes further that in Spain 
the source of the problems is rooted in a complex management and control system which ‘may lead 
in practice to an unclear division of responsibilities as well as a lack of effective supervision on the 
part of the managing authority’ (  23 ); 
46. Recalls that the finance ministers of Greece, Italy and Spain were invited to an exchange of views in 
Parliament’s Committee on Budgetary Control; regrets that none of the invited finance ministers 
appeared to discuss with members of that committee the Court of Auditors’ results with a view to 
improving the management of Structural Funds and eventually the legal basis; calls on its President to 
address, at the next meeting of the Heads of State, the refusal by those finance ministers to discuss 
these important matters in public with Parliament’s responsible committee;  
47. Recalls its repeated invitations to the Commission to present a proposal for the introduction of 
mandatory national management declarations (NMDs) issued, made public and duly audited by the 
responsible audit authority, as part of the Commission’s final and overall responsibility for the 
implementation of the Union budget; notes that NMDs should contain full information about the 
use of Union funds;  
48. Proposes that the substance of national declarations signed at Directorate-General level should comply 
with international auditing standards and that those declarations should be used by the Court of 
Auditors in its audit work and based on, among other things, the declarations by authorities to which 
management power is delegated;  
49. Points to the existence of significant differences in Member States’ administrative performance in the 
field of revenue and expenditure in shared management, especially related to detecting irregularities, 
fraud and errors and financial follow-up in both the customs field and spending of Union funds; is of 
the opinion that if all Member States would show a correct performance, in the customs field alone, 
an additional (net) revenue of at least EUR 100 000 000 could be envisaged by the Union budget; 
notes that the Commission so far monitors administrative performance in a reactive way and on case 
level and thus not performs sufficient trend analysis to identify fields of risk; calls on the Commission 
to apply the method of trend analysis to identify financial risks and to take measures to improve 
Member States’ administrative performance;  
Bulgaria and Romania  
50. Notes with great concern the Commission’s interim report on the progress made by Bulgaria under 
the Cooperation and Verification Mechanism; is concerned at the continuing parlous state of the 
Bulgarian legal system; notes that 27 criminal proceedings are under way against 28 judges; asks for 
clarification regarding a series of cases of alleged fraud in connection with Union funds in Bulgaria, 
causing a suspension of payments in 2008 in which the public prosecutor’s office suspended the 
investigations, even though the investigations into similar cases based on the same facts continued inEN L 286/40 Official Journal of the European Union 17.10.2012  
( 20 ) SEC(2011) 1179, p. 13.  
( 21 ) Reply of Commissioner Johannes Hahn to written question No 4 for the hearing on 19 December 2011 in the 
European Parliament’s Committee on Budgetary Control.  
( 22 ) SEC(2011) 1179, p. 20.  
( 23 ) SEC(2011) 1179, p. 21.
another Member State; is astonished that, in all cases of fraud involving Union funds which were 
brought before the courts, criminal prosecution was replaced by administrative fines, and that an 
important case of fraud involving Union funds has been delayed in appeal in court for over 18 
months; deplores, furthermore, the disregard of the Commission’s recommendation in not authorising 
the National Commission for the Identification and Forfeiture of Criminal Assets (CEPACA) to 
undertake pro-active asset verification of senior officials and politicians; is concerned that the 
unified, prompt, systematic publication of substantiated judgments is not the norm in Bulgaria; 
calls on the Commission to put pressure on the judicial authorities to increase their efforts to 
reform and to implement the Commission’s recommendations as soon as possible; calls on the 
Commission in this context to disclose how much funding has been allocated to supporting Bulgaria’s 
efforts to reform and to assess the extent to which the payments have achieved the promised results; 
expects to see serious improvements over the coming year, with further considerations and a series of 
measures drawn up by the Commission in cooperation with the Bulgarian government for re-estab ­
lishing the integrity of Bulgaria’s legal system;  
51. Notes with concern the Commission’s interim report on the progress made by Romania under the 
Cooperation and Verification Mechanism; is pleased, however, to note the positive upward trend in the 
record of the National Integrity Agency (ANI) in pursuing cases of unjust enrichment and identifying 
conflicts of interest; notes that the ANI’s funding was increased with Union money; is, however, 
concerned that there is no uniform follow-up to ANI cases and that the follow-up is often delayed; 
welcomes the fact that the National Anticorruption Directorate (DNA) continued to act as an effective 
prosecution service in high-level corruption cases; notes the increase in 2011 in the number of 
indictments, court decisions and convictions and the acceleration of cases in the High Court of 
Cassation and Justice, which is reflected in the 85 % increase in final court decisions in DNA cases 
compared to 2011 (  24 ); is concerned at the results of an analysis of court judgments in cases of high- 
level corruption, which shows that 60 % of sentences are suspended and the sentences are often the 
minimum provided by law; is surprised at the unsatisfactory practice in relation to the prompt 
publication of substantiated judgments, which encourages the risk of statute-barring in some cases 
of high-level corruption as a result of protracted substantiation caused by the long-delayed possibility 
of redress; calls on the Commission to disclose how much funding has been allocated to supporting 
Romania’s efforts to achieve judicial reform; expects to see further improvements within the coming 
year; calls on the Commission to increase pressure on the Romanian government to implement the 
Commission’s recommendations; expects the Commission to call on the Romanian government, 
without fail, to ensure that the Romanian government’s efforts to develop a consistent jurisprudence 
in public procurement trials are increased; calls on the Commission steadfastly and determinedly to 
insist vis-à-vis the Romanian government that the Commission’s recommendations are complied with 
and a clearer, more comprehensive implementation plan to prepare for implementation of the 
provisions of the Criminal Code and the Criminal Procedure Code is drawn up; expects increased 
efforts with regard to the confiscation of assets resulting from criminal activities in Romania; also 
expects a series of measures from the Commission, in cooperation with the Romanian government, 
for improving the integrity of the Romanian legal system;  
Pre-financings  
52. Notes that pre-financings are considered necessary in order for beneficiaries to start the agreed action;  
53. Notes the Court of Auditors’ observations that the Commission has substantially increased the use of 
pre-financings between 2005 and 2010 (Annual Report, point 1.28); is concerned that there is a lack 
of clearing of pre-financings (Annual Report, point 1.29 and point 86 of Opinion No 6/2010 of the 
Court of Auditors);  
54. Is concerned about the influence pre-financings have had mainly in the policy areas ‘External aid, 
Development and Enlargement’ and ‘Research and Internal Policies’; notes an increased use of pre- 
financings and an overall error rate below 2 % in these two policy areas; notes, furthermore, the Court 
of Auditor’s conclusions that pre-financings were free from material error but interim and final 
payments remain affected by a material level of error (Annual Report, points 5.35 and 6.48);EN 17.10.2012 Official Journal of the European Union L 286/41  
( 24 ) Commission Report on progress in Romania under Cooperation and Verification Mechanism, COM(2012) 56, 
page 4.
55. Believes that by paying high volumes of pre-financings, the Commission takes on an increased 
financial risk, for example in cases of insolvency of beneficiaries, as well as an increased risk to 
legality and regularity as acceptance of the cost declared by beneficiaries is postponed to a later date;  
56. Believes that it is more efficient to prevent irregularities than to correct undue payment  ex-post  
through recoveries; therefore invites the Commission to make it a  priority action  to reconsider the 
increased use of pre-financing as well as control and audit mechanisms by:  
— informing Parliament about the reasons why the Commission has made an increased use of pre- 
financings between 2005-2010,  
— adapting the level of pre-financings in the various programmes to a level that will ensure the 
necessary float for the beneficiary to start the project, while also safeguarding the financial interest 
of the Union and informing Parliament accordingly;  
Outstanding budgetary commitments  
57. Recalls that outstanding budgetary commitments are commitment appropriations made, but not used 
(i.e. paid) and that they derive mainly from multiannual programmes (e.g. Cohesion) where 
commitments are made in the earlier years of the programming period while the corresponding 
payments are made gradually during the whole programming period;  
58. Notes that a high level of outstanding commitments might indicate difficulties experienced by Member 
States in absorbing the amounts allocated;  
59. Notes that in 2010, the Court of Auditors found that those outstanding commitments increased by 
nearly 10 % to approximately EUR 194 000 000 000 (Annual Report, point 1.43 and Graph 1.2) 
which represents nearly three years of spending at the current rate;  
60. Believes that, as regards the 2007-2013 programming period, there is a risk that:  
— the committed funds will have to be spent quicker than usual, thereby increasing the risk of error,  
— at the end of the 2007-2013 programming period, Member States might try to absorb all funds 
committed whereby they might co-finance projects already implemented and financed from 
national funds (so called ‘retrospective’ projects which have not passed through the Union 
management and control system and are as a result more prone to error);  
61. Invites the Commission to provide information on the size of outstanding commitments per Member 
State as well as on its cooperation with the Member States to identify and address risk areas in relation 
to absorption and regularity;  
Budgetary contribution to decentralised agencies and joint undertakings  
62. Notes that the Union contribution for the financial year 2010 amounted to over EUR 620 000 000 to 
the decentralised Agencies and to over EUR 500 000 000 for the Joint Undertakings; notes some 
difficulties in finding information on the Union contribution for agencies; calls on the Commission to 
provide the discharge authority annually with consolidated information on the total annual funding 
per Agency/Joint Undertaking made from the general budget of the Union, such as:  
— the initial contribution of the Union entered in the budget for the Agency/Joint Undertaking,  
— the amount of funds coming from the recovery of surplus,EN L 286/42 Official Journal of the European Union 17.10.2012
— the overall contribution of the Union for the Agency/Joint Undertaking,  
— the amount of the European Free Trade Association (EFTA)’s contribution where this applies;  
63. Expects the Commission, in such time of financial crisis, to avoid increases in the Agencies’ budgets 
and to even consider reducing the Union contribution to their budgets based on an assessment of its 
priorities;  
64. Invites the Commission to draw up guidelines for templates that could be used by all Agencies/Joint 
Undertakings to establish their Annual Working Programmes and Annual Activity Reports, in order to 
ensure meaningful comparison of results against planned objectives;  
65. Calls on the Commission to provide Parliament with a detailed overview of the criteria and verification 
mechanisms applied to avoid conflicts of interest and ‘revolving door’ cases for Agencies/Joint Under ­
takings;  
Union budget and the financial and budgetary crisis  
66. Is concerned about the continuing financial and budgetary crisis in Member States; takes the view that 
this crisis also entails different types of risks for the Union budget in the following ways:  
— financial risks in relation to loans granted to Member States,  
— financial risks in relation to revenue;  
67. Recalls that six Member States (Greece, Hungary, Ireland, Latvia, Portugal and Romania) are currently 
considered to be ‘Member States in difficulties’ as they are receiving assistance in the form of balance 
of payments (BOP) facility loans, loans granted under the European Financial Stabilisation Mechanism 
(EFSM) or assistance under the Greek loan facility;  
68. Notes that the Union budget guarantees loans granted under the BOP facility (loans disbursed as at 
31 December 2010 amounting to approximately EUR 12 000 000 000) and the EFSM (no 
disbursements as at 31 December 2010) (  25 ); notes furthermore that the maximum outstanding 
amount of loans possibly granted under the BOP facility and the EFSM is EUR 50 000 000 000 
(Article 1(1) second subparagraph of Council Regulation (EC) No 332/2002 (  26 )) and 
EUR 60 000 000 000 (  27 ), respectively; highlights that the total (EUR 110 000 000 000) is almost 
equal to an annual Union budget as total payments from the Union budget amounted to approxi ­
mately EUR 122 000 000 000 in 2010 (  28 ); 
69. Is concerned about the fact that the Court of Auditors did not pay sufficient attention to these new 
challenges in the Union in its annual report on 2010; especially deplores the fact that the Court of 
Auditors did not mention these risks for the Union budget in a sufficient way; underlines that the 
Court of Auditors has to give the new European Stability Mechanism a prominent role in its further 
work;  
70. Recalls that there is no guarantee fund established to protect the budget from calls on those guar ­
antees; invites the Commission, therefore, to evaluate the potential need to set up a guarantee fund to 
cover for potential losses similarly to the Guarantee Fund for External Actions with the aim to protect 
the Union budget;EN 17.10.2012 Official Journal of the European Union L 286/43  
( 25 ) Annual Accounts of the European Union (COM(2011) 473), pp. 32 and 90.  
( 26 ) Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term financial 
assistance for Member States’ balances of payments (OJ L 53, 23.2.2002, p. 1) as last amended by Regulation (EC) 
No 431/2009 (OJ L 128, 27.5.2009, p. 1).  
( 27 ) Article 2(2) of Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation 
mechanism (OJ L 118, 12.5.2010, p. 1) sets a ceiling of 1,23 % for which the Commission estimates that a total of 
EUR 60 000 000 000 would be possible to activate (COM(2010) 713, p. 4).  
( 28 ) Source:  Diagram IV of the Annex to the Court of Auditor’s Annual Report 2010.
71. Stresses that the EFSM facility signed loans for EUR 48 500 000 000 of a total of 
EUR 60 000 000 000 as at 30 September 2011; encourages the Court of Auditors to provide a 
report on the EFSM operations and in particular of the control mechanisms, established by the 
Commission, by the end of 2012;  
72. Recalls that the revenue of the Union budget consists of different sources; reiterates that without 
prejudice to other revenue, the budget shall be financed wholly from own resources; notes that, in 
particular gross national income (GNI) resources accounting for 73 % of total revenue derive from the 
national budgets of the Member States (  29 ); 
73. Is of the opinion that the more severe the financial situation in certain Member States becomes, the 
more difficult it will be for those Member States to contribute to the Union budget; believes that this 
puts at risk the revenue of the Union budget stemming from ‘Member States in difficulties’ which 
might even be prompted to take on additional government debt to finance the Union budget or 
national co-financing of certain aid schemes;  
74. Notes that GNI resources coming from ‘Member States in difficulties’ account for roughly 6 % of total 
GNI resources for the financial year 2010 (  30 ); 
75. Notes, furthermore, that the co-financing rates for Member States in difficulties were increased for the 
European Agricultural Fund for Rural Development (EAFRD), the Structural Funds, the Cohesion Fund 
and the European Fisheries Fund; expects higher co-financing rates to allow higher investments 
particularly in Member States in difficulties; emphasises in this context the Commission’s increased 
control and supervisory responsibility;  
European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM)  
76. Criticises the fact that the Council used Article 122 of the TFEU in 2010 for setting up the European 
Stability Facility (EFSF) because that Article is only applicable for natural disasters and not for 
economic catastrophes; is concerned that the EFSF neither contains an element of democratic 
control by Parliament nor gives the Court of Auditors any audit rights; strongly criticises the fact 
that the EFSF has not even any provision on external public audit;  
77. Notes the recent signature of the ESM Treaty by the Member States; underlines its resolution of 
23 March 2011 (  31 ), in which it warns against establishing the permanent European Stability 
Mechanism (ESM) outside the Union’s institutional framework as this decision entails problems for 
the control mechanism of the institutions of the Union; shares the concerns of some Supreme Audit 
Institutions that the Treaty lacks sufficient provisions for ensuring effective external audit;  
78. Reiterates its invitation to the Council and Member States to give due consideration to the following 
issues concerning the implementation of the ESM:  
— to ensure in the by-laws of the ESM appropriate arrangements for public external audit of legality, 
regularity as well as performance in line with internationally accepted auditing standards taking 
into account the following documents:  
(i) Resolution of the Contact Committee of the Supreme Audit Institutions (SAIs) of the 
European Union from 14 October 2011 on the Statement of SAIs of the euro area on the 
external audit of the ESM (CC-R-2011-01) (  32 );EN L 286/44 Official Journal of the European Union 17.10.2012  
( 29 ) Source:  Diagram I of the Annex to the Court of Auditor’s Annual Report 2010.  
( 30 ) Source:  Diagram V of the Annex to the Court of Auditor’s Annual Report 2010.  
( 31 ) European Parliament resolution of 23 March 2011 on the draft European Council decision amending Article 136 of 
the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose 
currency is the euro (P7_TA(2011)0103).  
( 32 ) http://eca.europa.eu/portal/pls/portal/docs/1 /9406723.PDF
(ii) Statement of the Contact Committee of the SAIs of the European Union addressed to the 
European Parliament, the European Council, the European Commission and parliaments and 
governments of EU Member States from 14 October 2011 on the Impact of the European 
Semester and other recent developments in EU economic governance on the Supreme Audit 
Institutions of the Member States of the European Union and the European Court of Audi ­
tors (  33 ); 
(iii) Letter from the President of the Dutch Court of Audit (  34 ) on issues to be addressed in the by- 
laws of the ESM with regard to Article 30 of the ESM Treaty,  
— to establish appropriate arrangements for accountability and full transparency of the ESM,  
— to ensure the reliability of data and statistics,  
— to clarify the responsibility and reporting arrangements of all actors whose liabilities will be 
involved in the establishment of the mechanism,  
— to urge the Commission to report to Parliament and the Council twice a year on the risk that is 
incurred on the Union’s budget by its guarantee to the EFSM and to ask the Commission how in 
case of a default this money would be transferred into the Union budget and then to the EFSM;  
79. Invites the Council and the Member States to define Parliament’s political scrutiny over any euro-bond 
issue, in general, and of the permanent crisis mechanism in particular; shares the view that Parliament 
should be involved at an equal basis in the mechanism;  
Transparency  
80. Emphasises the vital role transparency plays in ensuring accountability for the use of public funds and 
recalls that it is one of the main instruments in achieving legal and regular expenditure; reiterates its 
call for all grant payments from Union funds to be recorded in a user-friendly online database paying 
due regard to data protection law; believes that the payment of Union funds should be explicitly 
conditional on the acceptance by the beneficiaries that the basic details — including the amount, 
recipient’s name, and purpose — be a matter of public record;  
81. Notes that the current system in the policy area Cohesion does not ensure full transparency of 
beneficiaries of ERDF and Cohesion Fund; notes that in the current framework, the Commission 
provides a portal with access to lists of beneficiaries available on national websites, which are only 
accessible in the respective national languages and do not follow common criteria; expects the future 
regulation laying down common provisions on the structural instruments (COM(2011) 615 – 
2011/0276 (COD)) to ensure that Member States provide the data on final beneficiaries of ERDF 
and Cohesion Fund to be published on the Commission’s official website in one of the three working 
languages of the Commission and based on a set of common criteria to allow comparison and 
detection of errors; recalls its invitation to the Commission to seek inspiration from the American 
Recovery Accountability and Transparency Board and its website (www.recovery.gov);  
82. Reiterates the judgment of the Court of Justice of 9 November 2010 in Joined Cases C-92/09  Volker 
and Markus Schecke GbR  and C-93/09  Hartmut Eifert , which is relevant for the policy area Agriculture 
and Natural Resources; calls on the Commission to submit as soon as possible a proposal for a new 
regulation requiring Member States to publish information on legal and natural persons receiving 
European agricultural funds, taking that judgment into account; takes the view that information on 
beneficiaries should be available on the Commission’s official website in one of the three working 
languages of the Commission and based on a set of common criteria to allow comparison and 
detection of errors;EN 17.10.2012 Official Journal of the European Union L 286/45  
( 33 ) http://eca.europa.eu/portal/pls/portal/docs/1 /9504723.PDF  
( 34 ) Available on the website of the Netherlands Court of Audit http://www.courtofaudit.com/english/News/2012/02/ 
Letter_of_president_Netherlands_Court_of_Audit_on_ESM_Board_of_Auditors
Statement of assurance methodology  
83. Is aware that the Court of Auditors intends to provide Parliament with more information on the 
policy areas ‘agriculture and natural resources’ and ‘cohesion, energy and transport’; welcomes that 
intention as it would lead to greater transparency and more precise identification of problematic areas 
of the budget; is of the opinion that this allows the Commission, the Court of Auditors, Parliament 
and other stakeholders to better focus their attention and make recommendations concerning those 
areas in which management needs to improve; wishes, however, to highlight that it is important to 
ensure comparability from one year to the next;  
84. Welcomes the Court of Auditors’ more in-depth assessment of the reliability of the Commission’s 
management representations both in Chapter 1 but also in the individual Chapters of the Annual 
Report 2010; recalls that management representation needs a strong second opinion by the Court of 
Auditors; encourages the Court of Auditors to continue strengthening its analysis of the Commission’s 
management representation and to report on it in a descriptive way;  
85. Notes the increased use of pre-financings; believes that pre-financings are exposed to a lower level of 
risk to legality and regularity than interim or final payments as no justification of cost is necessary for 
a pre-financing; invites the Court of Auditors to consider adapting its audit approach to take into 
account the increased use of pre-financings in order to provide Parliament with even more useful 
information focussing on those transactions involving the highest risk;  
86. Notes that the Court of Auditors applies a common methodology to quantify public procurement 
errors in the two policy areas Agriculture and natural resources and Cohesion, Energy and Transport; 
deplores the fact that the Commission follows different methodologies in these two areas both of 
which are furthermore not in line with the Court of Auditor’s methodology; is worried that different 
approaches in these areas could undermine the credibility of the control and audit of shared 
management expenditure; calls therefore on the Commission and the Court of Auditors to 
harmonise the treatment of public procurement errors in these two policy areas urgently and to 
report back to the Parliament’s competent committee on the progress made by the end of 2012;  
Specific issues  
The role of the Commissioner responsible for budgetary control issues  
87. Notes that, in the 2004-2009 Commission, a Commissioner had full-time responsibility for budgetary 
control as had previously been called for by Parliament; regrets the fact that within the current 
Commission budgetary control issues have been merged with other responsibilities (‘taxation and 
customs union’); proposes that in the 2014-2019 Commission a full-time Commissioner for 
Budgetary Control be re-established with responsibility for matters related, inter alia, to the 
following areas:  
— internal audit,  
— anti-fraud,  
— liaison with the Court of Auditors and the relevant committee of Parliament,  
— contact with the relevant budgetary and audit authorities in the Member States, and the devel ­
opment of a comprehensive internal control framework,  
— overseeing and improving the utility of the annual synthesis report, including a review of the 
Member States’ management and control systems,  
— commissioning and assessing independent programme evaluations, and developing the Evaluation 
Report, provided for by Article 318 of the TFEU, into a valuable tool for performance 
improvement;EN L 286/46 Official Journal of the European Union 17.10.2012
Performance: Getting results from the Union budget  
88. Welcomes the new Chapter 8 on ‘Getting results from the EU budget’ in the Annual Report including 
the Court of Auditors’ observations on the Commission’s self-assessment of performance in its AARs;  
89. Notes the Court of Auditors’ findings concerning the quality of the Commission’s reporting on 
performance, such as:  
— ‘Currently the Management Plan does not foresee objectives and indicators to measure economy 
and efficiency’ (Annual Report, title before point 8.17)  
— ‘In some areas targets [are] not sufficiently quantified or specific’ (Annual Report, title before point 
8.18)  
— ‘Interim milestones for multiannual targets [are] not defined in some areas’ (Annual Report, title 
before point 8.20)  
— ‘Description of policy achievements provided limited information on results and impacts’ (Annual 
report, title before point 8.22);  
90. Takes the view that those important findings illustrate that Parliament cannot fully rely on the 
Commission’s reporting on performance; believes that reliable data is the basis for good management, 
policy development and parliamentary oversight; would appreciate it if the Court of Auditors could 
further develop its activities in this area to include ‘certification’ of the performance data reported by 
the Commission on a regular basis;  
91. Believes that performance is as important as legality and regularity, and invites the Court of Auditors 
to consider whether it would be possible to include the new insight on performance on the different 
policy groups in the related chapters of the Annual Report;  
92. Notes that objectives, indicators and targets presented in the Management Plans are mainly focussed 
on effectiveness (Annual Report, point 8.15); invites the Commission to improve its reporting on 
performance, including indicators relating to economy and efficiency and to set appropriate targets for 
assessing progress towards achieving multiannual objectives;  
93. Further invites the Commission in areas of shared management to define, together with the Member 
States, appropriate performance indicators to be applied consistently, and to verify that Member States’ 
reporting of achieved results is mandatory, complete, accurate and public;  
94. Notes the repeated opinions of both the Court of Auditors and the Commission that the quality of 
management and control systems differs widely between Member States and between different 
programmes;  
95. Calls on the Commission to systematically account for those differences in the effectiveness of control 
systems and to make available clear evaluations of efforts — or lack of effort — by Member States in 
detecting and correcting irregularities to make sure that Member States with well-functioning super ­
visory and control systems are not at risk of being discredited;  
96. Invites the Commission to present the Evaluation Report provided for in Article 318 of the TFEU in 
its competent committee and Plenary at the same time as the Court of Auditors’ Annual Report is 
presented and invites the Court of Auditors to present its observations on the Evaluation Report at 
these occasions; underlines that the Evaluation Report should be published at a moment of time 
allowing both the Parliament and the Court of Auditors to adequately assess it;EN 17.10.2012 Official Journal of the European Union L 286/47
97. Recalls that Article 318 of the TFEU requires the Commission to submit ‘an evaluation report on the 
Union’s finances based on the results achieved’; notes that the Commission on 17 February 2012 
adopted the first Evaluation Report under Article 318 of the TFEU, relating to the financial year 2010;  
98. Further recalls that Parliament, in its resolution on discharge to Commission for the financial year 
2009 (  35 ), suggested that:  
— the Commission should appoint a ‘performance evaluator’ in order to establish clear ownership of 
the evaluation report (point 199),  
— a clear and transparent relationship should be established between performance indicators, legal/ 
political basis, amount of expenditure and results (point 200),  
— the Internal Audit Service should audit the methodology used for the production of the report as 
well as assess the work done (point 200),  
— key performance indicators used by Commission departments should be publicly available (point 
200);  
99. Regrets that the Commission has not been able to fully address these suggestions in the first 
Evaluation Report under Article 318 of the TFEU; further notes that the first Evaluation Report is 
a summary of existing evaluation reports in two policy areas (Education and Culture and Research); 
believes that the coverage and contents of the first Evaluation Report do not live up to what could be 
expected of an evaluation report required by the TFEU;  
100. Invites the Commission to further develop the content of the Evaluation Report under Article 318 of 
the TFEU and, in particular, to identify the added value of this Evaluation Report compared to ‘normal’ 
evaluations carried out under the Financial Regulation (Article 27) and its implementing rules (Com ­
mission Regulation (EC, Euratom) No 2342/2002 (  36 ), Article 21);  
101. Fully supports the Commission’s intention to ‘work to ensure that there is increased coordination, 
exchange of information and coherence both within the Commission and with Member States on the 
programming, organisation and use of monitoring and evaluation in the next financial framework’ (  37 ); 
102. Welcomes the fact that the Court of Auditors is planning to make observations on the first Evaluation 
Report produced under Article 318 of the TFEU (  38 ); 
103. Reiterates its call for the Commission to review the briefing and training given to staff regarding ‘Title 
II: Rights and Obligations of officials’ of the Staff Regulations so as to ensure that all staff are fully 
conversant with its terms and particularly with the obligations under Article 22a of the Staff Regu ­
lations; requests that the Commission submit to Parliament’s competent committee by September 
2012 a report on its activities in this field;  
104. Requests that the Commission submit to Parliament’s competent committee by September 2012 a 
report on its activities to encourage whistle-blowing by the wider public;  
Cohesion, energy and transport — adverse conclusion  
105. Deplores the increase of the error rate to 7,7 % in the policy area ‘Cohesion, energy and transport’ 
despite an increased use of interruptions of payment deadlines; is deeply worried that some of the 
errors could have been detected and corrected for 58 % of the transactions affected by errors (Annual 
Report, point 4.25); is concerned that talk of a ‘stable’ situation regarding error rates betrays a growing 
sense of complacency;  
106. Calls on the Court of Auditors to present error rates for the European Regional Development Fund, 
the Cohesion Fund, the European Social Fund, energy and transport separately and not on an 
aggregate basis;EN L 286/48 Official Journal of the European Union 17.10.2012  
( 35 ) OJ L 250, 27.9.2011, p. 33.  
( 36 ) OJ L 357, 31.12.2002, p. 1.  
( 37 ) COM(2012) 40, p. 16.  
( 38 ) European Court of Auditors’ Work Programme 2012, p. 6.
107. Deplores the fact that, year after year, non-respect of public procurement rules accounts for a large 
proportion of the errors; sees the wider implications and considers this to be an indication that the 
functioning of the internal market is at stake; calls on the Commission to pursue the ongoing reform 
of public procurement taking due account of these worrying results and to follow up on 
infringements rigorously as the Court of Auditors has also identified cases of incorrect transposition 
of Union Directives into national public procurement law (Annual Report, point 4.27);  
108. Reads with great concern that audit authorities are only partially effective; is deeply concerned about 
the fact that audit approaches of the audit authorities differ to such an extent that their results cannot 
be aggregated to reach an overall opinion by Fund at national level (Annual Report, point 4.41); 
invites the Commission to disclose how it consolidates the information received from audit authorities 
and how the Commission ensures consistency in order to provide reliable information to Parliament 
in its AARs;  
109. Calls on the Court of Auditors, pursuant to the second subparagraph of Article 287(4) of the TFEU, to 
deliver an opinion on the independence of the national audit authorities with regard to shared 
management;  
110. Asks the Commission to inform Parliament when it intends to rely on selected audit authorities in 
accordance with Article 73 of Council Regulation (EC) No 1083/2006 (  39 ) and thereby reduce its own 
on-the-spot audits; invites the Court of Auditors to follow this development closely and to perform an 
audit on it;  
111. Encourages the Court of Auditors to examine the possibility of responding to the ongoing problem of 
multiannuality of the implementation of funds and the annuality of the Court’s audits; stresses that 
during the implementation period the error rate tends to be higher than at the closure when the 
expenditure has undergone all levels of control;  
Supervisory role of the Commission in the Cohesion policy area  
112. Understands that the Commission has the option (but not the obligation) to sanction non-conforming 
Member States with different tools:  
Interruption  Suspension  Financial corrections 
accepted by Member 
States  Financial corrections 
disagreed by Member 
States  
Effect  Payment deadline is 
delayed for a 
maximum period of 
six months by the 
authorising officer  Payment is 
suspended for an 
indefinite time by the 
College of 
Commissioners  Member States are 
allowed to re-use the 
funds ‘released’ not 
resulting in a loss of 
funds for the 
Member State  All or part of the 
Union contribution is 
cancelled (net 
reduction)  
Conditions  Evidence suggests a 
significant deficiency 
in the management 
and control system  Serious deficiency in 
the management and 
control system or 
expenditure declared 
is subject to a serious 
irregularity  Member State 
accepts financial 
corrections 
stemming from 
audits of the 
Commission, the 
Court of Auditors or 
any other Union 
auditor  Member State 
disagrees with 
financial corrections 
stemming from audits 
of the Commission, 
the Court of Auditors 
or any other Union 
auditor  
Legal basis 
(Regulation (EC) 
No 1083/2006)  Article 91  Article 92  Article 98  Article 99EN 17.10.2012 Official Journal of the European Union L 286/49  
( 39 ) OJ L 210, 31.7.2006, p. 25.
113. Welcomes the clarification brought by the Commission (  40 ) regarding the distinction between ‘sig ­
nificant deficiency’ and ‘serious deficiency’; takes note that the assessment which leads to such 
qualification is based on the guidance note COCOF 08/0019/01-EN, using the key requirements 
provided therewith;  
114. Deplores the fact that the Commission has no power to impose penalties on Member States or regions 
which have repeatedly failed to implement Structural Funds and the Cohesion Fund correctly;  
E f f e c t i v e n e s s o f i n t e r r u p t i o n s a n d s u s p e n s i o n s  
115. Recalls that Parliament has called for systematic activation of interruptions and suspensions inde ­
pendent from any political considerations (discharge resolution 2009 (  41 ), points 194-196);  
116. Notes that for 2010 the Commission has made more use of interruptions as DG REGIO has inter ­
rupted 49 payment deadlines (see AAR of DG REGIO, page 42-44) and DG EMPL has interrupted 14 
payment deadlines (see AAR of DG EMPL, page 50); notes furthermore that the Commission did not 
suspend any payments either for the ERDF or for the Cohesion Fund in 2010, while suspending six 
payments of the ESF;  
117. Deplores the fact that the error rate in Cohesion, and in particular in Regional Policy, has increased 
despite the increased use of interruptions and despite the fact that the Commission has identified the 
Member States and the regions which contribute most to the error rate; reminds the Commission of 
its action plan to strengthen the Commission’s supervisory role under shared management of 
structural actions (  42 ); calls on the Commission to analyse the weaknesses in the Member States 
and regions affected most by high error rates and to comply with its supervisory role by enforcing 
measures as stated in the action plan;  
118. Calls on the Commission to resume payments only if sufficient appropriate audit evidence gathered on 
the spot proves that weaknesses were remedied in order to make this power of sanction more effective 
and with a view to avoiding any risk that payments are resumed too quickly;  
119. Notes that DG REGIO resumed 24 % (12 out of the 49 payments interrupted in 2010, all of which 
had been interrupted in October 2010 (  43 )) of the interrupted payments in December 2010; believes 
that resuming payments in December aggravates the imbalance of payments throughout the year 
which increases the risk of error in managing the payments and limits the time for the Court of 
Auditors to audit those payments; invites the Commission to inform Parliament for which of these 12 
cases funding would have been lost according to the n + 2/n + 3 rule if payments had been resumed 
in 2011;  
E f f e c t i v e n e s s o f f i n a n c i a l c o r r e c t i o n s  
120. Wishes to highlight the important difference between a financial correction implemented by a Member 
States which does not result in a net reduction and financial corrections implemented by the 
Commission by means of recovery orders which result in a net reduction; believes that financial 
corrections implemented by a Member State have a ‘virtual character’ with little sanctioning effect; 
welcomes the improvements made to Note 6 of the annual accounts of the European Union and 
invites the Commission to continue to improve the information provided, for example by comparing 
the financial corrections and recoveries to the corresponding amounts of payments;EN L 286/50 Official Journal of the European Union 17.10.2012  
( 40 ) Reply to question 21, document ‘Annex: questions to Commissioner Šemeta’ made available by the Budgetary 
Control Secretariat on 16 December 2011, after the hearing of Commissioner Šemeta on 8 December 2011 in 
the Committee on Budgetary Control.  
( 41 ) See footnote 35.  
( 42 ) COM(2008) 97.  
( 43 ) Annex to the replies to the written questions to Commissioner Johannes Hahn for the hearing on 19 December 2011 
in Parliament’s Committee on Budgetary Control.
121. Is deeply worried about the following facts:  
— financial corrections in 2010 resulted in a net reduction in only around 20 % of all cases (see 
annual accounts of the European Union, page 68) since projects identified as being ineligible may 
be replaced by other projects, possibly also ‘retrospective projects’ although they represent an 
increased risk in terms of legality and regularity and have no Union added value,  
— in most cases, financial corrections address weaknesses in Member States’ control systems and not 
individual projects, which means that the financial consequences of system weaknesses are usually 
borne by the national taxpayer who has already contributed to the Union budget,  
— the implementation rate of financial corrections for the 2000-2006 programming period has 
dropped from 62 % to 58 % (see annual accounts of the European Union, page 71), mainly as 
a result of low implementation rates in the ERDF and Cohesion Fund;  
122. Is of the opinion that these facts seriously undermine the effectiveness of financial corrections; fears 
that the possibility of replacing ineligible expenditure puts pressure on Member States to present 
other, possibly retrospective projects, which could even lead to the adverse effect of increasing the risk 
in terms of legality and regularity to the Union budget;  
C o n c l u s i o n s o n t h e s u p e r v i s o r y r o l e o f t h e C o m m i s s i o n  
123. Calls on the Commission, in particular DG REGIO, to make full use of existing sanctioning tools; is, 
however, of the opinion that the 2007-2013 legislative framework does not provide sufficient 
incentives for Member States to comply with the rules, nor does it provide the Commission with 
sufficiently effective tools to reward compliance or to sanction non-compliance;  
124. Invites the Commission, therefore, to consider it a priority action to support Parliament in its efforts 
in the ordinary legislative procedure concerning the proposal for a regulation laying down common 
provisions on the structural instruments (COM(2011) 615 – 2011/0276(COD)) to create an effective 
sanctioning mechanisms so that the Commission can fully assume its final and overall responsibility 
for the implementation of the budget which should, inter alia, include the following elements:  
— making net reductions the rule for financial corrections imposed by the Commission and abol ­
ishing the possibility to declare retrospective projects,  
— obliging Member States to recover ineligible expenditure from final beneficiaries as far as possible 
so that final beneficiaries bear the consequences of ineligible expenditure and not the national 
taxpayer and forwarding to Parliament information on those recoveries by the Commission if 
possible,  
— allowing the Commission to give Member States incentives not only to comply with the rules but 
also to implement Cohesion policy effectively, efficiently and economically,  
— ensuring that a full range of sanctions (interruptions, suspensions, financial corrections, and 
penalties) are available for all funds with minimal scope for discretion when breaches of the 
rules are discovered,  
— allowing the Commission to impose penalties on Member States or to discontinue operational 
programmes in Member States or regions which have repeatedly failed to implement Structural 
Funds and the Cohesion Fund correctly,  
— bringing legal actions if Member States persistently fail to respect their obligations under 
Article 258 TFEU,  
— transmitting to the Commission all relevant data and information the Commission needs in 
exercising its supervisory role as regards the implementation of the funds by Member States;EN 17.10.2012 Official Journal of the European Union L 286/51
Agriculture and natural resources — qualified conclusion  
125. Welcomes the fact that direct payments covered by the Integrated Administrative and Control System 
(IACS) — which in 2010 accounted for 77 % of total expenditure under the CAP — were free from 
material error (Annual Report, point 3.55 and Commission’s reply to this point);  
126. Welcomes the fact that the Commission has managed to keep the most likely error rate at 2,3 % 
(Annual Report, Annex 3.1) and encourages the Commission to continue the efforts to bring the error 
rate further down;  
127. Recalls that IACS must ensure that correct and traceable payments are made to farmers; notes, 
however, that the effectiveness of IACS is adversely affected by inaccurate data in the databases, 
incomplete cross checks or incorrect or incomplete follow up of anomalies (Court of Auditors 
Annual Report, point 3.29); calls on the Commission to ensure that all databases are up to date 
and all anomalies are properly followed up;  
128. Notes the Court of Auditors’ example of an eligibility error under the European Agricultural Guarantee 
Fund (EAGF) (  44 ) in connection with a bartering arrangement using intervention stocks; further notes 
that the total amount borne by the Union budget for transporting the 9 894 tonnes of butter involved 
in the arrangement is approximately EUR 900 000 (  45 ); is highly concerned about the sound financial 
management of those operations; invites the Commission to take the necessary measures to ensure 
that bartering arrangements if to be continued at all are transparent and cost effective;  
129. Notes that rural development expenditure (approximately EUR 11 483 000 000 (  46 )) is particularly 
prone to error inasmuch as, out of 80 transactions sampled, 40 (50 %) were affected by errors and 
that 21 (52 %) of those transactions were affected by quantifiable errors (Annual Report, point 3.19);  
130. Notes that the clearance of accounts procedure has proven generally effective in protecting the 
financial interests of the Union budget by excluding expenditure which has not been effected in 
compliance with Union rules;  
131. Encourages the Commission to further reduce the duration of the conformity clearance procedure 
while ensuring that Member States’ right of defence is preserved; calls on the Commission to improve 
the link between the financial corrections imposed and the real amount of irregular payments; calls on 
the Member States to cooperate with the Commission by providing all necessary information in due 
time;  
132. Welcomes the Court of Auditors’ findings in its Special Report No 8/2011 on ‘Recovery of undue 
payments made under the common agricultural policy’ that systems related to recoveries and financial 
corrections have improved in recent years; reiterates its belief that agricultural funds unduly paid have 
to be recovered from the final beneficiaries as much as possible to avoid the taxpayer being hit twice; 
invites the Commission to take further measures to eliminate the scope for interpretation and 
diverging practices by the Member States and to rigorously control Member States’ systems for 
recoveries;  
133. Strongly believes that tripartite meetings between the Court of Auditors, the Commission and national 
authorities, should be extended to the policy area of agriculture and natural resources in order to 
facilitate a harmonised interpretation and application of the rules regarding the management and 
control of expenditure avoiding misunderstandings as much as possible;EN L 286/52 Official Journal of the European Union 17.10.2012  
( 44 ) Annual Report, Example 3.1, p. 79.  
( 45 ) Annual Report, Footnote 23, p. 79.  
( 46 ) Annual Report, Table 3.1, p. 72.
External aid, development and enlargement — qualified conclusion  
134. Notes the Court of Auditors’ conclusion that the supervisory and control systems for External aid, 
Development and Enlargement were only partially effective in ensuring the regularity of payments 
(Annual Report, point 5.36);  
135. Notes that the overall most likely error estimated by the Court of Auditors is 1,7 % (Annual Report, 
point 5.13); regrets, however, that a material level of error was found in interim and final payments 
which according to Commissioner Andris Piebalgs is around 5 % (  47 ) and would be even higher if 
budget support were excluded from the calculation; notes further that all quantifiable errors were 
found in the interim and final payments (Annual Report, point 5.13); deplores the fact that two thirds 
of the errors found in final payments had not been detected by Commission controls (Annual Report, 
point 5.16);  
136. Believes that the overall most likely error rate is below the materiality threshold of 2 % due to the 
proportion of pre-financings and budget support within total operational expenditure; notes that this 
proportion has increased from 66 % in the financial year 2008 to 75 % in the financial year 2010 (  48 ); 
137. Recalls that pre-financings have a different risk profile which does not materialise in the statement of 
assurance audit; believes that it is more efficient to prevent irregularities than to correct undue 
payment  ex-post  through recoveries;  
138. Recalls that the main risks linked to budget support (risk to effectiveness of the aid as well as risks of 
fraud and corruption) also do not materialise in the statement of assurance audit; invites the 
Commission to rigorously monitor those risks; however, considers sectoral budget support an 
effective measure for long-term capacity building; calls on the Commission to introduce budget 
support only under rigorous and well-defined conditions;  
139. Welcomes the Court of Auditors’ statement that ‘EuropeAid has set up a comprehensive control 
strategy and continued to bring significant improvements to the design and implementation of its 
supervisory and control systems.’ (Annual Report, Annex 5.3);  
140. Notes that the Court of Auditors considers that ‘the Director-General’s declaration and annual activity 
report only give a  partially fair  assessment of financial management in relation to regularity for the 
EDFs and the General Budget of the European Union’ (Annual Report, point 5.34, emphasis added);  
141. Invites the Commission to encourage EuropeAid to complete as soon as possible the work on a 
methodology to calculate the level of ‘residual error’ which might remain after all controls have been 
executed and to share the results with the other external relations Directorates-General in view of 
achieving the necessary improvement of the Commission’s management representations for external 
aid, development and enlargement;  
142. Calls on the Commission to allow a Deputy Head of Delegation, usually coming from a Member State, 
where one exists, to deputise for the Head of Delegation in his absence for all matters except the 
implementation of operational expenditure managed by the Union Delegation, which can only be sub- 
delegated to Commission staff;EN 17.10.2012 Official Journal of the European Union L 286/53  
( 47 ) Reply to an oral question to Commissioner Andris Piebalgs at the hearing on 12 January 2012 in the European 
Parliament’s Committee on Budgetary Control.  
( 48 ) Calculation on the basis of the reply to written question No 2 to Commissioner Andris Piebalgs for the hearing on 
12 January 2012.
143. Notes the Court of Auditors’ observations presented in example 5.3 of the Annual Report; is highly 
concerned about the ‘flexible interpretation of eligibility for co-financed actions’ or ‘notional approach’ 
with United Nations organisations which bears the risk of double financing of the same cost; believes 
that this also has a reducing effect on the Court of Auditors’ error rate; is also deeply worried about 
the ‘extended eligibility criteria’ applicable under the Financial and Administrative Framework 
Agreement with the United Nations Agencies (FAFA) and the Framework Partnership Agreements 
with the Commission’s implementing partners which also bear the risk of financing the same cost 
twice; calls strongly on the Commission to discontinue both practices; expects UN agencies to grant 
intergovernmental donor organisations similar rights to access internal audit reports as are granted to 
UN Member States; notes in this context that further progress is needed in order to improve reporting 
on the use of Union funds by providing information about results rather than actions;  
144. Welcomes the revised mandate, granted by the Commission, providing budgetary guarantee to the EIB 
covering risks against losses under loans and guarantees for projects outside the Union; underlines the 
fact that the Union guarantee provided to the EIB falls undoubtedly under the scrutiny of the Court of 
Auditors;  
145. Notes that the information on contracts awarded by EuropeAid (  49 ) and DG ECHO (  50 ) is not 
following the same template; encourages the Commission to implement a common template for 
the databases containing the contracts awarded by these two DGs, where the minimum information 
provided should be: contract number/reference, title of the contract, theme/sector of intervention, 
contractor’s name and nationality, country of intervention, amount, type of the contract and the 
duration (providing both the beginning date and the end date);  
146. Calls for a detailed report from the Commission on the total cost of advertising for EU enlargement 
(spots in cinemas, on television, the internet and other media), a breakdown of costs by the individual 
media and the countries in which the spots appeared, and detailed information on the implementing 
companies, from production to broadcasting; also expects a report on all other advertising activities of 
the Commission concerned with enlargement, together with a correspondingly detailed report and 
breakdown of costs;  
Union’s aid to Haiti  
147. Recalls the earthquake in Haiti and its disastrous consequences; regrets the insufficient level of coor ­
dination of humanitarian aid and development aid (linking relief, rehabilitation and development); 
takes the view that provision of humanitarian aid should be based on an exit strategy; considers that 
the Commission should direct its efforts and funding to rehabilitation and development;  
148. Regrets the insufficient coordination between the Union Delegation and the ECHO representation; 
supports a reinforced coordination between all Union actors in the country; therefore urges the 
Commission to ensure better coherence and complementarity between humanitarian aid and devel ­
opment aid, both at a policy level and in practice;  
149. Deplores the lack of sustainability of some projects and stresses that projects should principally aim at 
creating employment and sustainable growth which would allow the Haitian State to increase its own 
revenues in order to depend less on foreign assistance; therefore requests the Commission to provide 
Parliament with a list of projects which have been carried out during the last 15 years in Haiti with a 
detailed assessment of their current situation in order to see how sustainable they are since;  
150. Points to the lack of visibility of the Union aid in Haiti; takes the view that, in order to enhance 
visibility, not only the flag but also the name of the European Union should appear in PR documents 
rather than simply that of the Commission or of DG ECHO, which are much less identifiable to 
average Haitian citizens;EN L 286/54 Official Journal of the European Union 17.10.2012  
( 49 ) http://ec.europa.eu/europeaid/work/funding/ben eficiaries/index.cfm?lang = en&mode = SM&type = contract  
( 50 ) http://ec.europa.eu/echo/files/funding/agre ements/agreements_2010.pdf
Research and other internal policies — qualified conclusion  
151. Notes the Court of Auditors’ conclusion that the supervisory and control systems for Research and 
other Internal Policies were only  partially effective  in ensuring the regularity of payments (Annual 
Report, point 6.49);  
152. Notes as a specific characteristic of this policy group that most of the operational expenditure (72 %, 
Annual Report, Table 6.1) is implemented by way of pre-financing — which only requires compliance 
with a limited number of conditions as opposed to interim and final payments — and that this 
specificity has a positive influence on the overall error rate;  
153. Is worried, in particular, about the level of pre-financings in the lifelong learning programme which 
allows for pre-financings of up to 100 % of the budgeted project cost (Annual Report, point 6.9) and 
for which 93 % of all payments made in 2010 were pre-financings (Annual Report, Table 6.1);  
154. Notes that a material level of error was found in interim and final payments to beneficiaries and that 
the most likely error estimated by the Court of Auditors is 1,4 % (Annual Report, point 6.12) due to 
the influence of pre-financing; further notes that the Court of Auditors does not publish a specific 
error rate for interim and final payments;  
155. Understands that the Commission (  51 ) estimates the representative error rate without pre-financings on 
a multiannual basis to be 3,4 % for Framework Programme 6 and the provisional representative error 
rate for Framework Programme 7 to be a little above 4 % on a multiannual basis; understands further 
that the residual error rate on a multiannual basis, which is the level of error remaining after the 
corrections and recoveries by the Commission services following their audits have been made, 
amounts to around 2,4 % for Framework Programme 6 while for Framework Programme 7 the 
Commission has not yet had enough time to see the full effects of recoveries and corrections on a 
multiannual basis;  
156. Underlines the important role of the Risk-Sharing Finance Facility in the light of the current financial 
crisis; calls on the Commission to increase the support granted by the facility to universities and 
research organisations for their investments in PPP and research infrastructure projects of European 
interest with regards to the fulfilment of the smart public policy objectives of Europe 2020;  
157. Notes that the Commission is simplifying  ex ante  control procedures as far as possible with a view to 
facilitate the processing of payments with the consequence that only administrative requirements and 
arithmetical checks can be made; is worried that even in the case of doubt about the eligibility of cost 
declared, only limited  ex ante  checks were carried out (Annual Report, point 6.17 and example 6.2); 
insists that action be taken to remedy this situation;  
158. Believes that a balance has to be struck between facilitating payments and controlling the eligibility of 
cost declared; calls on the Commission to modify its  ex ante  control strategy and to apply a risk-based 
approach to address better specific risks of the cost statement and — in the case of a high risk — to 
extend the  ex-ante  control procedures to checks carried out on the spot;  
159. Is deeply worried that audit certificates still continue to be only partially effective (Annual Report, 
point 6.22); recalls that audit certificates are one of the most important elements of the Commission’s  
ex-ante  control; calls on the Commission to make it common practice to formally communicate with 
the external auditors by providing feedback and requesting explanations in cases of unreliable audit 
certificates;  
160. Welcomes the fact that the Commission’s  ex-post  audit strategy is judged to be effective in detecting 
and correcting errors (Annual Report, point 6.30); welcomes, moreover, the fact that the Commis ­
sion’s procedures to recover the funds unduly spent are adequate and that the Commission has made 
more use of the corrective measures such as early termination of the contracts and penalties;EN 17.10.2012 Official Journal of the European Union L 286/55  
( 51 ) Follow-up replies to questions to Commissioner Máire Geoghegan-Quinn for the hearing on 23 January 2012 in the 
European Parliament’s Committee on Budgetary Control.
161. Is deeply worried that the calculation of the residual error rate is based on assumptions which do not 
always hold true in reality such as the ‘extrapolation’ of errors found in one cost statement to other 
cost statements of the same beneficiary; shares the Court of Auditors’ view that limited reliance can be 
placed on the residual error rate (Annual Report, point 6.32); believes that this also calls into question 
the reliability of reservations made by the Director-Generals, as one of the main indicators used for 
deciding whether to make a reservation is the residual error rate;  
Views from specific policy perspectives  
Views from a Development Policy perspective  
162. Takes the view that the ongoing budgetary and economic crisis which many Member States are facing 
requires the Union, more than ever, to maximise the efficiency and impact of its aid; against this 
backdrop, is concerned that the Court of Auditors found in its Annual Report on the implementation 
of the 2010 budget that in 2010 the Commission’s supervisory and control systems for external aid 
and development were again only partially effective in ensuring the regularity of payments and that 
two-thirds of the quantifiable errors were found in final payments and that those errors had not been 
detected by Commission controls;  
163. Acknowledges, none the less, the Commission’s ongoing efforts to improve the design and imple ­
mentation of its supervisory and control systems and to raise the quality of data entered in the CRIS 
management information system; welcomes the fact that, overall, payments for external aid and 
development in 2010 were free from material error, with a lower estimated error rate than in 
2009; encourages the Commission to develop a coherent methodology for the external relations’ 
directorates to calculate the residual error rate, to further improve its external audit framework and to 
uphold the highest control standards possible;  
164. Encourages the Commission, in particular, to improve the quality of the  ex-ante  control, monitoring 
and reporting, supervision and risk-based audit functions of Union Delegations, where most of the 
errors were detected, to strengthen the capacity of the Delegations’ operational and financial sections, 
to increase the resources available to Delegations for key monitoring activities and to systematise the 
monitoring framework, which includes introducing multiannual monitoring and evaluation plans and 
strengthening monitoring guidance;  
165. Calls on the Commission to find workable solutions to the organisational challenges caused by the 
merger of DG DEV and DG AIDCO at the end of 2010; urges the Commission and the EEAS, which 
was launched in December 2010, to finalise without delay working arrangements clarifying their 
respective roles and responsibilities in the programming and implementation cycle of external 
assistance, which includes the Delegations;  
166. Takes the view that the new financing instruments under the next Multiannual Financial Framework 
2014-2020 must fully reflect Parliament’s enhanced legislative and scrutiny rights under the Lisbon 
Treaty, and that Parliament must be involved in the programming process on an equal footing with 
the Council;  
167. Encourages the Commission to further improve the effectiveness of Union aid to the basic education 
sector in Sub-Saharan Africa and South Asia (  52 ), in particular by establishing realistic indicators and 
targets to monitor results effectively, by ensuring that Delegations assign staff with sufficient expertise 
and seniority to maintain sector policy dialogue with partner governments and other donors, and by 
focusing more on the quality of education and the capacity of beneficiary governments to cope with 
increases in school enrolment;EN L 286/56 Official Journal of the European Union 17.10.2012  
( 52 ) EU Development Assistance for Basic Education in Sub-Saharan Africa and South Asia (Special report No 12/2010).
168. Is dismayed by the large-scale fraud cases uncovered in late 2010 by the Global Fund to Fight AIDS, 
Tuberculosis and Malaria in Mali, Mauritania, Djibouti and Zambia, and is worried about the potential 
misappropriation of substantial sums of money, such as from the EU 2010 contribution to the Global 
Fund; encourages the Commission to work more closely with the Global Fund to support and to 
monitor its country-level interventions in order to avoid the recurrence of such corruption cases and 
to improve the Global Fund’s accountability and effectiveness;  
169. Reiterates its call for the greater involvement of parliaments and consultation with civil society and 
local authorities in partner countries when drawing up and reviewing Development Cooperation 
Instrument (DCI) Country Strategy Papers and Multiannual Indicative Programmes;  
Views from an Employment and Social Affairs Policy perspective  
170. Notes that employment and social affairs account for 18 % of expenditure on the Union’s Cohesion 
Policy, with a vast majority of expenditure in this policy area (94 %) funded from the European Social 
Fund (ESF);  
171. Welcomes, therefore, the fact that, in the context of the resources allocated to the European Social 
Fund (ESF), the utilisation rate for commitment appropriations was 100 % (EUR 10,8 billion) and for 
payment appropriations 87,9 % (EUR 7,1 billion); recognises that the lower rate for payment appropri ­
ations arose because some commitments were not made until the last quarter of the year; 
acknowledges the Commission’s efforts to improve financial management;  
172. Takes note of the estimation by the Court of Auditors that the error rate in 2010 stood at 7,7 % with 
regard to spending in the fields of cohesion, energy and transport; is surprised at the Court of 
Auditors’ observation that Union directives were not properly transposed into national public 
procurement legislation; expects therefore the Commission to improve its supervision of transposition 
into national law and audit the admissibility of projects that receive funding; considers public 
procurement applies less to the ESF;  
173. Acknowledges the Commission’s efforts to ensure, by means of bilateral and multilateral training 
exercises that the Member States provide the beneficiaries and the implementing bodies on a 
continuous basis with training, information, advice and guidance with a view to reducing the error 
rate of payments; regrets that the Member States are apparently unable to do so on their own;  
174. Renews its call for the Member States to be required to report on the implementation of the funding 
instruments, and supports the Court of Auditors’ call for regular scrutiny by the Commission of the 
use of the ESF;  
175. Recalls that the proper usage of funds by Member States must be ensured and that payment inter ­
ruptions and suspensions are effective tools for doing so;  
176. Is concerned about the large number of errors detected by the Court of Auditors in relation to 
financial engineering instruments;  
177. Regrets that the recommendations of the Court of Auditors on the contribution of the ESF to 
combating early school leaving have as yet been only partially implemented by the Commission;  
178. Recalls that it is for the Directorate-General for Employment, Social Affairs and Inclusion, which 
administers the funds, to adopt appropriate measures to prevent fraud and corruption; welcomes the 
close cooperation with the European Anti-Fraud Office (OLAF); calls for assurances that national 
judicial authorities will also continue to investigate and punish instances of fraud in the ESF;EN 17.10.2012 Official Journal of the European Union L 286/57
179. Welcomes the Commission’s efforts to secure comprehensive accountability from all Member States 
by means of annual inspection reports from auditing bodies and annual summary reports, and 
considers that the Commission should extend its auditing to include a communication to Parliament 
on the added value of Union funding;  
180. Underlines the specific needs of target groups and project leaders in the ESF; suggests that the co- 
financing of projects should also include voluntary activities in non-profit-making organisations and 
contributions in kind; calls on project leaders to furnish an updated survey by Member State and by 
project on the administrative costs of the ESF;  
181. Highlights the fact that the Globalisation Fund has financed 21 projects so far with a total of EUR 105 
million, while appropriations of up to EUR 500 million can be mobilised through transfers; welcomes 
the growing trend amongst Member States to develop and submit appropriate projects in this context; 
encourages the Commission to support Member States effectively in developing and submitting 
projects to the Globalisation Fund in order to help workers to find new jobs and to develop new 
skills when they have lost their jobs as a result of changing global trade patterns or the global 
financial and economic crisis;  
182. Calls on the Court of Auditors to audit the other budget headings in the area of social and 
employment policy as well, and to determine why full use is not being made of the resources 
available;  
183. Calls on the Court of Auditors to present error rates for the European Regional Development Fund 
and the ESF separately and not on an aggregate basis;  
184. Expects the Commission to produce detailed reports on the pilot projects;  
Views from an Internal Market and Consumer Protection Policy perspective  
185. Notes with satisfaction the increase in the execution rate for payment credits in Title 12; points out, 
however, the low execution rate for budget line 17 02 04, which has had a negative impact on the 
average execution rate in the area of consumer policy; stresses the need for the Commission to rely on 
more efficient forecasting mechanisms for payment needs in order to improve the budget execution; 
welcomes the progress that the Commission has made in 2011 in this respect;  
186. Stresses the need to promote consumer financial education in order to empower consumers in respect 
of financial services; therefore, despite the previously highlighted execution deficiencies and taking into 
account recent positive developments in this respect, reiterates its support for the Pilot project on 
Transparency and stability in the financial markets established in 2010; encourages the Commission to 
take steps towards identifying the best ways to spend the allocated means;  
187. Welcomes the Commission’s initiative to organise workshops in the Member States to address the 
problems that national administrations encounter in the implementation and enforcement of internal 
market legislation; believes that it will have a positive effect on the implementation record;  
188. Once again calls on the Commission to analyse the effectiveness of the current financing programmes 
for SMEs and to explore the development of new joint financial instruments;  
189. Welcomes the importance that the Commission attaches to the promotion of SOLVIT and EU Pilot as 
alternative problem-solving mechanisms, and calls on the Commission to strengthen its efforts in this 
respect; emphasises that SOLVIT has proved effective in resolving problems affecting citizens such as 
the recognition of professional qualifications and employment rights; recalls its support for a separate 
budget line and appropriate financial means for SOLVIT, Your Europe Portal and all other tools used 
to ensure that the internal market works on the ground; welcomes the revamped Your Europe Portal 
as a single-entry website giving access to information about rights in different sectors as well as to 
assistance services; takes the view that the provision of public information on the Your Europe Portal 
should be stepped up and that it should be more widely promoted among Union citizens and 
businesses;EN L 286/58 Official Journal of the European Union 17.10.2012
190. Welcomes the continued financial support for the network of European Consumer Centres (ECC-Net), 
as well as the study commissioned to assess its efficiency; calls on the Commission to draw on the 
conclusions of that study and to take action in order both to improve the quality of the services 
offered and to ensure stable financing for the ECC-Net; stresses the importance of increasing consumer 
awareness about services offered by the ECC-Net; warmly welcomes the Commission’s actions in this 
respect, such as media campaigns and search engine optimisation measures;  
191. Calls on the Commission to strengthen its efforts to ensure that the Member States’ account 
statements for the purposes of traditional own resources are accurate, and to enhance national 
customs supervision to avoid errors in amounts of traditional own resources collected, in line with 
the Court of Auditors’ recommendation (point 2.21); encourages the Commission, therefore, to make 
further efforts to simplify the legal framework, notably in order to resolve remaining problems in 
some control systems;  
192. Underlines the complexity of rules as a major source of errors in the ‘Research and Other Policies’ 
chapter; asks the Commission to explore different options to improve the balance between simplifi ­
cation and control in order to reduce the administrative burden for SMEs; highlights the complexity of 
public procurement rules and recommends, therefore, their simplification in order to reduce the 
overall incidence of errors;  
193. Is concerned about the partial effectiveness of the Commission’s supervisory and control systems; 
points out that some errors found by the Court of Auditors were not detected by the Commission 
and, therefore, underlines that efforts need to be made towards improving current control systems;  
194. Acknowledges the efforts made by the Commission in the implementation of the Modernised Customs 
Code; notes the delays in the process and urges the Commission to set a more realistic deadline;  
195. Repeats its demand to the Commission that it should forward to Parliament and to the Council, each 
year, a more detailed description of expenditure against each budget line compared with the remarks 
made in respect of the line;  
196. Despite the Court of Auditors’ justified criticism (  53 ), considers the SME Guarantee Facility to be a key 
financial instrument for further boosting the potential of craft enterprises and retail shops; encourages 
the Commission to maximise the SME Guarantee Facility’s added value and further promote Union 
innovation and entrepreneurship on a world scale;  
197. Notes the Court of Auditors’ special report No 13/2011 on whether the control of customs procedure 
42 prevents and detects value added tax (VAT) evasion; to prevent significant losses to national 
budgets resulted from VAT evasion, calls on the Commission to further modify the Union regulatory 
framework; moreover, to ensure the uniform management of VAT exemption by customs authorities, 
calls on Members States to improve collaboration and exchange information more efficiently;  
198. Recalls the accountability of Member States under Article 317 of the TFEU and their duty to reinforce 
control systems in respect of, firstly, management verifications before certifying expenditure to the 
Commission and, secondly, of its guidance on annual summaries, which are a valuable source of 
assurance;  
199. With reference to ‘A budget for Europe 2020’, calls on the Commission to continue working with 
Parliament and the Council and to ensure that future programming activities in the Union respect the 
principles of simplification, sound financial management and accountability; calls on Member States 
and the Commission to focus on objectives that are SMART-specific, measurable, achievable, relevant 
and scheduled to coincide with the planning of Union spending programmes, and, at the same time, 
to take account of the eventual risks of implementation;EN 17.10.2012 Official Journal of the European Union L 286/59  
( 53 ) Court of Auditors’ special report No 4/2011 on ‘The audit of the SME Guarantee Facility’.
Views from a Transport and Tourism Policy perspective  
200. Notes that in the 2010 budget, as finally adopted and amended during the course of the year, 
specifically for policies within the remit of the Committee on Transport and Tourism, a total of 
EUR 2 640 819 360 was included in commitment appropriations and EUR 1 895 014 386 was 
available in payment appropriations; notes further that, of these amounts:  
— EUR 1 012 440 000 in commitment appropriations and EUR 890 594 000 in payment appropri ­
ations was available for Trans-European Networks for Transport (TEN-T),  
— EUR 16 876 000 in commitment appropriations and EUR 15 375 000 in payment appropriations 
was available for transport safety,  
— EUR 63 940 000 in commitment appropriations and EUR 30 257 000 in payment appropriations 
was available for the Marco Polo programme,  
— EUR 165 788 360 in commitment appropriations and EUR 128 447 410 in payment appropri ­
ations was available for the transport agencies,  
— EUR 896 035 000 in commitment appropriations and EUR 455 135 000 in payment appropri ­
ations was available for the Galileo programme,  
— EUR 427 740 000 in commitment appropriations and EUR 346 880 476 in payment appropri ­
ations was available for transport, including a priority area dedicated to sustainable urban mobility, 
under the Seventh Framework Programme for Research and Development,  
— EUR 4 600 000 in commitment appropriations and EUR 3 520 000 in payment appropriations 
was available for tourism;  
201. Notes that, in considering the implementation of the budget for the 2010 financial year, the Court of 
Auditors has chosen to focus on cohesion and energy policies rather than on transport policy;  
202. Welcomes the high utilisation rates for commitment appropriations for TEN-T projects; calls on the 
Member States to ensure that adequate funding is made available from national budgets to match this 
Union commitment; recalls that Parliament supported a higher level of Union funding; encourages the 
Member States, in connection with cross-border projects for the core network, to make every effort to 
reach balanced financial agreements that are in keeping with the Union’s stated ambitions;  
203. Calls on the Commission to present, on an annual basis, lists of tourism and transport infrastructure 
projects, co-financed by cohesion and regional funds, as is already the case for TEN-T funds, and, as a 
result, make information on Union co-funding easily accessible and transparent for other Institutions 
and the taxpayer;  
204. Welcomes the mid-term review of the priority projects coming under the TEN-T 2007-2013 multi ­
annual programme that DG Mobility and Transport (MOVE) conducted in 2010 in order to assess the 
progress made in establishing the network; considers that review to have established the principle of 
tying funding to tangible progress with projects, with a view to making the best possible use of the 
financial resources available; calls on the Commission to extend this results-oriented review process to 
other Directorates-General and Union policies, and calls on Parliament’s other committees to join it in 
doing so;  
205. Welcomes the Commission’s proposals in relation to the TEN-T and the relevant financial instrument 
(known as the ‘Connecting Europe Facility’), stresses the European added-value of improved use of 
funding, and endorses its budgetary commitments, which are commensurate with the objectives of the 
new proposal; supports the development of innovative sources of funding with a view to ensuring that 
European transport infrastructure projects, which are of necessity long and costly, are brought in on 
time;EN L 286/60 Official Journal of the European Union 17.10.2012
206. Welcomes the ‘Project bonds’ initiative, and calls on the Commission to monitor the effectiveness and 
multiplier effects of this new instrument; wholly endorses the proposal to earmark 
EUR 10 000 000 000 from the Cohesion Fund for transport infrastructure via the Connecting 
Europe Facility, with a view to making the structural and cohesion policies more effective and 
enhancing their added value; calls for the systems used to manage and control the use of Cohesion 
Fund appropriations to be improved, with a view to ensuring proper and effective take-up of the 
funding;  
207. Is disappointed at the low uptake of payment appropriations for transport safety (65 %); notes that the 
amount specified in the 2010 budget was that proposed by the Commission in its preliminary draft 
budget; calls on the Commission to provide a detailed explanation this underspending and the 
measures it will take to ensure that the problem does not recur in future;  
208. Welcomes the increase in the take-up rate for payment appropriations for transport safety, passengers’ 
rights and the Marco Polo II programme; notes, however, that 14 % of the appropriations for the 
Marco Polo II programme were transferred to other budget headings; notes that some of the appropri ­
ations against the SESAR programme budget line have also been transferred, and draws attention to 
how important this programme is in terms of strengthening the Union’s industrial policy;  
209. Welcomes the take-up rate for payment appropriations for the Egnos and Galileo programmes, which 
consolidated the progress made in 2009; emphasises the importance of investment in this sector, 
which has a knock-on effect on all Union policies and, in particular, on logistics, sustainable transport 
and transport safety sectors; welcomes the successful launch of the first two Galileo operational 
satellites on 21 October 2011, which was an essential step towards successful implementation of 
the two programmes; calls for steps to ensure that the innovative applications and services supported 
by these transport programmes are properly funded, developed and implemented, and are viable, with 
a view to maximising the programmes’ potential;  
210. Takes note of the Special Report entitled ‘Were ERDF co-financed tourism projects effective?’, which 
states that tourism is the largest service industry in the Union; welcomes the Court of Auditors’ 
conclusion that most projects had several results, either by creating or maintaining jobs or by creating 
tourism capacity or activity; calls on the Commission to follow the Court of Auditors’ recommen ­
dations concerning the management and control of ERDF funding for tourism projects and to make 
use of the provisions of the Lisbon Treaty to propose a multiannual tourism programme; with 
appropriately funded budget lines;  
211. Notes with satisfaction that the Court of Auditors has taken the view that the annual accounts of the 
Trans-European Transport Network Executive Agency are legal and regular in all significant aspects; is 
concerned about the proportion of commitment appropriations carried over (14,5 %); calls on the 
Commission to give a detailed explanation as to why these appropriations were carried over;  
212. Requests that a report be attached to each year’s budget on the unspent appropriations carried over 
from previous years, explaining why those monies have not been used and how and when they will be 
used;  
Views from a Civil Liberties, Justice and Home Affairs Policy perspective  
213. Regrets the decrease in the level of implementation of commitments in the budget for the Area of 
Freedom, Security and Justice (94,8 % in 2010 in comparison with 97,7 % in 2009), as well as the 
slight decrease in the level of implementation of payments (88,7 % in 2010 in comparison with 
89,6 % in 2009);  
214. Welcomes the fact that significant progress has been made in reducing the level of cancellations of 
payments (from 8,5 % in 2009 to 2,8 % in 2010); deplores the increase in the level of carryovers 
(from 1,9 % in 2009 to 8,5 % in 2010) mainly due to carryovers in the External Borders Fund, the 
European Return Fund and SIS II; encourages the Commission to reduce the level of carryover of 
payments in the budget for the Area of Freedom, Security and Justice;EN 17.10.2012 Official Journal of the European Union L 286/61
215. Welcomes the high implementation rates of three of the four ‘Solidarity and management of migration 
flows’ Funds; takes note of the justification given by the Commission for the lower implementation 
rate of the External Borders Fund, namely that the annual programmes of the five countries partici ­
pating for the first time in 2010 in that Fund were not adopted in 2010;  
Views from a Culture and Education Policy perspective  
216. Welcomes the efforts to further simplify procedures and enhance accessibility as regards education and 
culture programmes, and notes that in 2010, the Education, Audiovisual and Culture Executive 
Agency (EACEA) had e-forms available for most actions and programmes, in particular for the 
Lifelong Learning Programme (LLP), the Culture Programme and the Europe for Citizens Programme; 
is pleased with the extended use of lump sums and grant decisions; stresses the importance of a right 
balance between flexible procedures and necessary controls;  
217. Regrets that the primary controls for the LLP were not fully implemented by national agencies, which 
has resulted in the insufficient absorption of funds by the programme, due to incoherent reporting 
data and the lack of timely performance of the minimum number of checks; calls on the Commission 
to continue its efforts in order to ensure that all national agencies take up their responsibilities;  
218. Notes with satisfaction that the Commission has improved its control systems and that the policy area 
‘Culture and education’, as part of the ‘Research and Other Internal Policies’ policy group, was free 
from material error;  
219. Is pleased with the significant improvement in payment delays, and notes with satisfaction that the 
EACEA executed 94 % of its payments within the time limits; recalls that any delay in payments 
directly affects the beneficiaries’ rights, in particular those of small and medium-sized enterprises, and 
consequently the success of the programmes; recalls, however, that the main part of a grant should be 
paid as soon as possible and, in any event, during the subvention period, in order not to increase 
organisations’ dependence on banks approving loans, as the EACEA considers interests not ‘eligible’;  
220. Notes that the Commission launched a call for tender on a pan-European TV-network, as envisaged in 
the budgets for 2009 and 2010; is thus very concerned that in 2010 the Commission decided to close 
down the project and redirect the money elsewhere, without consent from the Parliament and the 
Council; demands the disclosure of all contracts and recommendations relating to the TV-network and 
evaluations made by the selection committee;  
Views from an Environment, Public Health and Food Safety policy perspective  
221. Considers the overall implementation rates of the budgetary headings for environment, public health 
and food safety as satisfactory; recalls in this context that only 0,76 % of the Union budget is 
dedicated to those policy instruments falling under the responsibility of the Committee on the 
Environment, Public Health and Food Safety;  
Environment and Climate Action  
222. Underlines the overall rate of execution amounted to 99,26 % in the field of environment and climate 
action; notes, further, that the implementation of payments was at the level of 84,1 %;  
223. Welcomes the achievement of 99,4 % of the implementation of the LIFE + operational budget; notes 
that in 2010 EUR 240 000 000 were dedicated to project grants, EUR 9 300 000 supported oper ­
ational activities of NGOs, EUR 42 500 000 were used for measures intended to support the Commis ­
sion’s role of initiating and monitoring policy and legislation development and EUR 14 500 000 were 
used for administrative support;EN L 286/62 Official Journal of the European Union 17.10.2012
224. Highlights the variation in indicative national and final allocation per Member State of LIFE + funds as 
well as the difference in the numbers of proposals received from different Member States; encourages 
further Commission’s efforts to provide training annually to national authorities and to organise 
seminars in each Member State to provide general information on the objectives of LIFE + and on 
how to prepare a successful proposal;  
225. Acknowledges the lack of a legal base to implement the EU Action programme to combat climate 
change; welcomes the transfer of the full amount of EUR 15 000 000 to the financial facility within 
the Sustainable Energy Financing Initiative, for the purpose of developing suitable funding instruments 
to give a major stimulus to energy-efficiency projects and projects for the exploitation of renewable 
energy sources;  
226. Takes note of the observations by the Court of Auditors concerning  ex-post  audits which have been 
conducted by the Commission on risk-based criteria since 2006; welcomes the fact that DG ENV 
decided to change its sampling methodology in 2011 in order to have results also based on a random 
sample that could more easily be generalised to the whole project;  
227. Welcomes the action plan designed by DG CLIMA to improve national security measures which was 
deemed necessary after a significant security weakness was identified in the national registries of the 
EU Emissions Trading System (ETS);  
228. Notes that seven pilot projects and one preparatory action were implemented under the 2010 budget;  
229. Underlines the fact that the implementation rate of contributions to international environmental 
activities, which are intended to cover obligatory and voluntary contributions to international conven ­
tions, protocols and agreements are subject to exchange-rate variations as most contributions are paid 
in US dollars;  
Public Health and Food Safety  
230. Welcomes the implementation rate of commitment appropriations in the field of public health of 
99,7 % (excluding appropriations envisaged for the European Food Safety Authority, the European 
Centre for Disease Prevention and Control, and the European Medicines Agency); notes the 
commitment execution of 95,3 % in the field of food safety, animal health and welfare and plant 
health;  
231. Underlines the importance of the public health programme; welcomes, therefore, the satisfactory 
implementation rate of nearly 100 % in commitment appropriations; is aware of a lower implemen ­
tation rate in payment appropriations (95,1 %) due to late payment requests by grant beneficiaries or 
extended contract agreements;  
232. Stresses the importance of continuing to raise public awareness about the harmful effects of tobacco 
consumption; considers the full implementation of the amount available in 2010 as a success of the 
HELP campaign;  
233. Notes the observations by the Court of Auditors on the Executive Agency for Health and Consumers, 
an administrative entity of the Commission; calls on the Executive Agency to significantly reduce its 
carried forward amounts by revising its budget planning and reporting instruments in order to respect 
the annuality principle of the Union budget; has also taken note of Commission’s annual report on 
internal audits carried out in 2010 and encourages the Executive Agency in cooperation with its 
partner DG to work on issues addressed such as IT governance and architecture;  
234. Takes note of the implementation level of 95,3 % for budget chapter 17 04 — Food and feed safety, 
animal health, animal welfare and plant health; is aware that full implementation was not possible due 
to a low number of outbreaks of animal diseases, thus the emergency funds were not consumed fully, 
as anticipated, and, secondly, there was no need to purchase emergency vaccines;EN 17.10.2012 Official Journal of the European Union L 286/63
235. Observes, in respect of the eradication measures that the final cost claims submitted for payments by 
the Member States were often lower than the initial estimation; notes further, that more audits have 
been necessary due to prior high error rates which also delay payment execution in this field;  
236. Regrets the lower outturn on payments for plant health measures due to delays by the Member States 
in submitting the required documents or because the documentation was incomplete; calls on the 
Member States to improve procedures in this regard;  
Views from a Foreign Affairs policy perspective  
237. Notes that most non-quantifiable errors identified by the Court of Auditors concern faults in 
procurement procedures and in the extension of contracts; reiterates, in common with previous 
discharge procedures, its concerns about the significant vulnerability of these two sectors to fraud 
and mismanagement;  
238. Takes note of the fact that the supervisory and control systems for External Action/Development/ 
Enlargement policies are considered only partially effective, and calls on the Commission and the 
EEAS to take and implement all necessary measures to improve the regularity of payments;  
239. Recalls that the main risks linked to budget support (namely the risk to how effective the aid is as well 
as the risks of fraud and corruption) do not appear in the statement of assurance audit; invites the 
Commission to rigorously monitor these risks;  
240. Considers that, above and beyond the efforts required to improve the regularity of payments, the 
Commission should, for all interventions, carry out systematic evaluations through the prism of 
cost/benefit ratio, as recommended by the Court of Auditors in its Special report (  54 ); insists that 
Parliament, as a branch of the budgetary authority, be informed about the findings of such evalu ­
ations, including the findings of evaluations covering CFSP activities;  
241. Stresses, however, that the cost/benefit ratio cannot always be considered, in itself, as a sufficient 
criterion for assessing the appropriateness of the Union’s assistance in a third country; is in fact of the 
conviction that the effectiveness of assistance in respect of the goals of Union Foreign Policy needs to 
be systematically evaluated and should include additional criteria — such as, for example, the strategic 
interests of the Union, the need for a Union presence on the ground, or the implementation of 
projects and actions fostering Union values and fundamental principles — should also be taken into 
consideration;  
242. Agrees with the Court of Auditors’ opinion that a variety of fields of Union assistance could, in some 
cases, be optimised and the impact of assistance could be increased by means of better coordination 
with Member States whose external action should not be considered competitive, but rather comple ­
mentary; calls therefore for greater efforts in respect of donor coordination inside the Union, with 
third countries and international organisations;  
Views from a Regional Development Policy perspective  
243. Notes that the budgetary execution was good for Regional policy, with EUR 30 557 000 000 having 
been paid out, and that the bulk of the payments in 2010 related mainly, and for the first time, to the 
implementation of the 2007-2013 programmes (EUR 25 550 000 000 of interim payments, 
compared with EUR 9 420 000 000 in 2009);EN L 286/64 Official Journal of the European Union 17.10.2012  
( 54 ) Special Report of the Court of Auditors n  o 1/2011 ‘Has the devolution of the Commission’s management of external 
assistance from its headquarters to its delegations led to improved aid delivery?’
244. Regrets that Regional policy was part of an error-prone group, among the policy areas of Union 
expenditure, with 49 % of the 243 payments audited by the Court of Auditors affected by error; notes, 
however, that only some of the errors will have a financial impact and that the 49 % frequency is 
lower than in the 2000-2006 period; underlines that the rate of error has been decreasing as 
compared to the error rates detected in the 2000-2006 programming period; calls on the Commission 
and the Member States to ensure, under shared management, that the trend shows a consistent 
decrease in the error rate;  
245. Recalls that an error occurs when a transaction is not carried out in accordance with the legal and 
regulatory provisions, therefore rendering declared (and reimbursed) expenditure irregular; also notes 
that an error does not necessarily mean that funds have disappeared, been lost or wasted or that fraud 
has been committed;  
246. Notes that the non-compliance with both public procurement rules and eligibility rules accounts for a 
high proportion of the estimated error rate (31 % and 43 %, respectively); notes in this context the 
recommendation of the Court of Auditors to identify areas for further simplification; calls, therefore, 
for analysis of whether technical assistance should be stepped up and, at any rate, of the need to 
ensure that full operational capacity is maintained for financial oversight; underlines the need for the 
Commission to simplify the rules in order to ensure more user-friendly procedures and not to 
discourage potential beneficiaries from participating in projects; calls on the Member States to 
simplify their national provisions, which very often add an administrative burden not required by 
the Union rules; considers, therefore, that meticulous efforts should be made to further reduce this 
error rate;  
247. Regrets the deficiencies in the financial engineering instruments’ implementation, namely in respect of 
the lack of compliance with regulatory requirements in making the contribution from the operational 
programmes to the funds implementing such instruments, as well as deficient reporting and verifi ­
cation requirements in force; notes that the potential of the financial engineering instruments should 
be further developed to allow the development of qualitative strategic projects, the participation of 
private actors, especially SMEs, and the use of capital in Union projects; calls on the Commission to 
simplify these instruments’ rules, as their current complexity limits their use; recommends more in- 
depth analysis to ascertain the real effect of these instruments and the guidelines on implementation; 
calls on the Member States to comply with their reporting obligations;  
248. Notes that, in a great number of transactions affected by error, Member States’ authorities had 
sufficient information to detect and apply corrective measures prior to certification; calls on the 
Commission to reinforce its assistance to Managing Authorities (MAs), through targeted workshops, 
guidance notes, circulation of best practices and training of officials responsible for management, 
given that the majority of errors occur at the first level control,; notes that a constant monitoring of 
the actual transfer of training measures targeted at the MAs should be established in order to check 
that knowledge is actually being passed on, giving special attention to what happens at the local level; 
calls for the establishment of corrective mechanisms, including the introduction of sanctions in clear 
cases of negligence;  
249. Welcomes the explanation by the Commission which states, for the first time, that the large majority 
of errors are concentrated in only three Member States and only in several operational programmes;  
Views from a Women’s Rights and Gender Equality Policy perspective  
250. Reminds the Court of Auditors and the Commission that pursuant to Article 8 of the TFEU, the 
promotion of equality between men and women is a fundamental principle of the European Union in 
all its activities; therefore, calls on the Court of Auditors to assess the implementation of the budget 
from the gender perspective, where applicable;  
251. Regrets that the annual report contains no observations from the Court of Auditors, nor any replies 
from the Commission regarding gender-related spending;EN 17.10.2012 Official Journal of the European Union L 286/65
252. Stresses that an audit of the budget which includes a gender perspective is a prerequisite to the 
preparation of a budget with a gender dimension, as it can reveal the effects of spending on 
gender equality, and, in particular, if men and women benefit from the expenditure proportionally 
and whether the budget has to be adjusted to better meet the different needs of men and women;  
Views from an International Trade Policy perspective  
253. Draws attention to the fact that ensuring efficient protection of the Union’s financial interests is linked 
to macro-financial assistance; considers it necessary that the Commission provides for appropriate 
controls and that the Court of Auditors provides for appropriate audits in relation to this instrument;  
254. Stresses that, as a result of the Aid for Trade strategy, Union funds must be used effectively and in 
accordance with the rules and regulations in force, with the objectives of ensuring better integration of 
beneficiaries into the rules-based world trading system and of promoting the eradication of poverty;  
255. Stresses that the Union’s business centres in China, Thailand and India should be supported; at the 
same time, is of the opinion that sufficient controls need to be put in place in order to guarantee the 
good and effective functioning of these centres;  
Views from a Fisheries Policy perspective  
256. Notes the communication from the Commission to the European Parliament, the Council and the 
Court of Auditors on the annual accounts of the European Union for the financial year 2010 (  55 ), and 
the Annual Report of the Court of Auditors on the implementation of the budget (  56 ); points out that 
neither text makes much reference to maritime affairs or fisheries;  
257. Thanks DG MARE for the additional documentation it sent, and takes the view that the overall 
implementation rates for maritime affairs and fisheries budget headings were satisfactory in 2010;  
258. Emphasises that the overall budget implementation rate was 97,2 % for commitment appropriations 
and the overall rate for payment appropriations was 79,23 %; notes, however, the very low imple ­
mentation rate in chapter 11 02 (fisheries markets), and notes the Commission’s explanations with 
specific reference to the implementation of fisheries programmes for the outermost regions;  
259. Is pleased to note that DG MARE plans to improve the implementation of commitments made 
available for projects co-financed with the Member States and encourages the relevant departments 
within the Commission to continue in this vein;  
260. Notes the efforts DG MARE has made in the area of internal auditing and calls on the Commission to 
continue to deal with all the projects and files as efficiently and quickly as possible;  
261. Notes the retention of DG MARE’s reserve for management and control systems relating to FIFG 
(Financial Instrument for Fisheries Guidance) operational programmes in Germany — packaging plant; 
notes that this is a long-standing, complex programme that began in 2001, and calls on the 
Commission to bring it to a close soon, at the same time safeguarding Union’s interests;  
262. Welcomes the action DG MARE has taken to increase effectiveness with regard to monitoring inter ­
national agreements, and welcomes the agreement to decouple purely trade-related payments 
(EUR 104 017 795, i.e. 72 % of the total) from sectoral support payments (EUR 40 211 849, i.e. 
28 % of the total);EN L 286/66 Official Journal of the European Union 17.10.2012  
( 55 ) OJ C 332, 14.11.2011, p. 1.  
( 56 ) OJ C 326, 10.11.2011, p. 3.
263. Emphasises that there is a need for effective monitoring of Union-funded activities that provide 
sectoral support in the context of international agreements by using matrices that are as detailed 
as possible; emphasises, furthermore, that a call needs to be made for the proportion of sectoral 
support to be increased; firmly believes that the trade-related parts of agreements ought ultimately to 
be made conditional upon effective, sufficiently monitored, substantial sectoral support;  
264. Given its legislative and budgetary role, asks to be more closely involved in fisheries policy, especially 
as regards international fisheries agreements and the various meetings at which they are discussed (e.g. 
joint committees and bilateral negotiations with non-EU countries);  
265. Requests the Court of Auditors to draw up special reports on priority areas for the common fisheries 
policy following the series of legislative proposals and communications that have been brought 
forward as part of the common fisheries policy reform package, including matters relating to the 
external dimension of the policy.EN 17.10.2012 Official Journal of the European Union L 286/67