ISSN 1831-0834
EuropEaN
Court of audItorS
2013
EN
Special r eport No 11
GEttING  thE  GroSS  NatIoNal INC omE  (GNI)  data 
rIGht: a morE  StruC turEd aNd bE ttEr-foCuSEd 
approa Ch would ImprovE  thE  EffEC tIvENESS  of 
thE  CommISSIoN ’S vErIfIC atIoN

GEttING  thE  GroSS  NatIoNal INC omE   
(GNI) data rIGht: a morE  StruC turEd  
aNd bE ttEr-foCuSEd approa Ch would 
ImprovE  thE  EffEC tIvENESS  of thE  
CommISSIoN ’S vErIfIC atIoNSpecial r eport No 11  2013
(pursuant to article 287(4), second subparagraph, tfEu)
EuropEaN  Court of audItorS
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special r eport  no 11  2013
more information on the European union is available  
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Cataloguing data can be found at the end of this publication.
luxembourg: p ublications o ffice of the European union, 2013
ISbN 978-92-9241-405-4doi:10.2865/36059
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Printed in Luxembourg
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification3
CoNtENt S
Paragraph
 AbbreviA tions
 GlossAry
i–viii executive summAry
1–17 introduction
10–17  verific Ations c Arried out by the c ommission on Gni  dAtA used for own resources
10–11  ResPonsibilities within the Commission and the Role of the Gni  Committee
12–13  VeRifiC ation woRk
14–17  RePoR tinG  RequiRements
18–23 Audit scope, Appro Ach And methodoloGy
24–92 observ Ations
24  the c ommission’s verific Ation c An be expected to improve the qu Ality of member st Ates’ Gni  
dAtA, however …
25 … the verific Ation w As not sufficiently structured And focused bec Ause …
26–36  … eurost At did not AppropriA tely pl An And prioritise its work
31–32  Risk assessment of Gni  ComPonents not aPPRoPRiately C aRRied out
33–36  Cost–benefit analysis not PRoPeRly C aRRied out
37–46  … eurost At did not Apply A consistent verific Ation Appro Ach between member st Ates
39 CheCks based on the Gni  inVentoR y assessment questionnaiRe not adequately doCumented
40–42  weaknesses in the PeRfoRmanCe of diReC t VeRifiC ation
43–44  l aCk of CRiteRia foR  settinG  CountR y-sPeCifiC  ReseRV ations
45–46  tR ansVeRsal sPeCifiC  ReseRV ations set inaPPRoPRiately
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification4
47–67  … eurost At did not c Arry out sufficient work A t member st Ate level
48–56  limited sC oPe in euRostat’s VeRifiC ation of Gni  inVentoRies
57–64   PRoblems ReGaRdinG  ComPlianCe with esa 95 and the quality of national aCC ounts’ estimates 
not deteC ted by euRostat
65–67  betteR-foCused VeRifiC ation would ha Ve an imP aCt on membeR  states’ RelatiVe C ontRibutions
68–76  … eurost At completed its verific Ation cycle l Ate
71–73  ex CessiVe use of GeneR al ReseRV ations
74–76  m ajoR  ReVisions not suffiCiently examined
77–92  … eurost At’s verific Ations were not Adequ Ately reported
79–82   euRostat’s assessment RePoR ts on membeR  states’ Gni  weRe not always C omPlete, tR ansP aRent 
and C onsistent
83–87  annual oPinions of the Gni  Committee not in line with leGislation and not infoRmatiVe
88–90  annual aC tiVity RePoR ts of dG budGet only PRoVided a  PaRtial assessment
91–92  annual aC tiVity RePoR ts of euRostat only PRoVided a  PaRtial assessment
93–98 conclusions And recommend Ations
 Annex i — Gni-b Ased own resources for the yeArs 2002, 2007  And 2010  by member 
stAte
 Annex ii — cAlcul Ation of Gni-b Ased own resources
 Annex iii — c ommission’s verific Ation of member st Ates’ Gni  inventories
 Annex iv — o verview of the c ourt’s A udit Appro Ach And methodoloGy
 Annex v — the c ourt’s control model
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification5
 Annex vi — risk Assessment mA trix used by the c ourt
 Annex vii — the c ourt’s risk Assessment
 Annex viii — the c ourt’s cost–benefit AnAlysis
 Annex ix — c ountry-specific reserv Ations set by the c ommission on  
eu-25  member st Ates
reply of the c ommission
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification6
AAr(s): annual activity report(s)
bop: balance of payments
br(s): business register(s)
cfc: consumption of fixed capital
cmfb: c ommittee on Monetary, f inancial and Balance of p ayments statistics
coe: compensation of employees
coso: c ommittee of sponsoring organisations of the treadway c ommission
edp: excessive deficit procedureesA95: European s ystem of national and r egional a ccounts
fisim: financial intermediation services indirectly measured
Gdp: gross domestic product
Gfcf: gross fixed capital formation
GG: general government
GiA q: Gni i nventory a ssessment Questionnaire
Gni: gross national income
Gos: gross operating surplus
GvA: gross value added
hbs: Household Budget survey
hh: households
iAc: internal audit capability (of a c ommission service)
ic: intermediate consumption
ics: internal control standardsabbrE vIatIoNS
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification7
nAce (rev. 1): statistical classification of Economic a ctivities in the Ec (‘nomenclature 
générale des activités économiques dans les c ommunautés européennes’). ‘r ev. 1’ was the 
framework applicable to the years under review (2002 to 2007).
nos: net operating surplus
npi: non-profit institutions
npish: non-profit institutions serving householdsnsi(s): national statistical institute(s)
or: own resources of the European unionpi: property income
pim: perpetual inventory methodpt: process tables
row: rest of the world
sbs: structural Business statisticstfeu: treaty on the f unctioning of the European union
tor : traditional own resources
vA: value added
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification8
Assessment reports: Eurostat’s assessments made on the quality of Member s tates’ G ni 
data, whose underlying components are compiled in accordance with the Gni inventory.
direct verification: control approach introduced in 2007 by Eurostat to confirm that the 
description of sources and methods in the Gni inventory reflects the compilation practice 
actually applied.
Gdp: Gdp is the final result of the production activity of resident producer units (in the eco -
nomic territory) and can be defined in three ways:
(a) production approach: the sum of gross value added of the various institutional sectors 
(non-financial corporations, financial corporations, general government, households and 
non-profit institutions serving households) or the various industries plus taxes less subsi-
dies on products;
(b) expenditure approach: the sum of final uses of goods and services by resident insti-
tutional units (actual final consumption and gross capital formation) plus exports and 
minus imports of goods and services;
(c) income approach: the sum of uses in the generation of income account of the total 
economy (compensation of employees, taxes on production and imports less subsidies, 
gross operating surplus and mixed income of the total economy).
Gni: Gni is Gdp minus primary income (including compensation of employees, taxes and 
subsidies on production and imports, and property income) payable by resident units to 
non-resident units plus primary income receivable by resident units from non-resident units.
Gni c ommittee: a committee made up of Member states’ representatives and chaired by 
Eurostat which assists the c ommission in its verification work.
Gni reservations: these are notified by the c ommission (or exceptionally by Member states) 
to allow Member states’ Gni data for a given year to be revised after the statutory 4-year cut-
off point. General reservations cover the compilation of all Gni components of a Member 
state, whereas (country or transversal) specific reservations cover the estimate of discrete 
Gni components.
GiA q: the G ni inventory assessment Questionnaire is the main tool used by Eurostat to verify 
the compliance of the Gni inventory with Esa95.
Gni inventory: d escription of the procedures (methods) and basic statistics (sources) used 
by Member states to make estimates for the various Gni components.
Gni questionnaire(s): data for the aggregate Gni and its components provided annually by 
Member states for the calculation of own resources.GloSSar Y
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
Gni quality report(s): the Gni questionnaire is accompanied by a report showing how the 
aggregate is obtained, and describing any main changes in the procedures and basic statis-
tics compared to previous years.
in-depth verification: this term is used to refer to the tests carried out by the c ourt, as 
opposed to direct verification, which refers to the work carried out by the c ommission. they 
are similar even though the scope and objectives of ‘in-depth verification’ are broader that 
those of ‘direct verification’ .
opinion of the Gni committee: annual opinion issued by the Gni c ommittee on the 
appropriateness of Member states’ Gni data for own resource purposes.
responsibilities within the c ommission: i n the context of the management of Gni-based 
own resources, dG Budget is the authorising officer for the recovery of revenue. However, the 
verification of Gni data provided by Member states for the calculation of own resources is 
carried out by Eurostat.
the terms ‘dG Budget’ and ‘Eurostat’ are used when reference is made to the work of each 
specific c ommission service. Where reference is made to the work of both dG Budget and 
Eurostat or the c ommission in general, the term ‘c ommission’ is used instead.
revision of Gni data: updating of Gni data necessitated by: the correction of mistakes, an 
update of statistical sources, changes in the reference or benchmark year or modifications 
of the national accounts’ conceptual framework (e.g. nacE r ev. 2). the latter two situations 
are considered major regular revisions (or benchmark revisions) and major occasional 
revisions respectively.
10
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationEXECutIvE Summar Y
i.
Member states’ gross national income (Gni) is the basis 
for the calculation of the most significant share of the 
revenue in the Eu budget. r evenue derived from this 
source has increased from around 50 % of the budget 
in 2002 (46 billion euro) to 70 % in 2012 (98 billion 
euro).
ii.
Gni is a macroeconomic aggregate whose compilation 
process should comply with Esa95. the commission 
verifies Gni data provided by Member states in order 
to ensure that their contributions to the Eu budget are 
correct. the Gni c ommittee assists the c ommission in 
its verification work.iii.
the c ourt’s audit examined the effectiveness of the 
commission’s verification of Gni data for the years 
2002 to 2007 used for own resource purposes. such 
data became definitive in 2012. the audit determined 
the risks in compiling Gni and assessed the c ommis-
sion’s performance in addressing these risks.
iV.
the c ourt’s auditors applied a more structured veri-
fication than the c ommission, focusing on a limited 
number of material and risky components. i f the c om-
mission applied a similar approach, this would require 
no increase in Eurostat staff dedicated to the verifica-
tion of Gni data for own resource purposes.
V.
the c ommission completed its verification cycle in 
January 2012. there was an excessive use of general 
reservations and major revisions carried out by Mem-
ber states between 2008 and 2011 were not suffi-
ciently examined by the c ommission.
11
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
Vi.
the c ommission’s verification can be expected to 
improve the quality of Member states’ Gni data. How-
ever, the c ourt concludes that this verification was not 
sufficiently structured and focused for the following 
reasons:
(a) verification strategy/approach: the c ommis-
sion did not plan and prioritise its work in an ap -
propriate way, as the risks were not appropriately 
assessed;
(b) verification process: the c ommission did not 
apply a consistent approach when carrying out 
its verifications in Member states resulting in 
particular in weaknesses in the performance of 
direct verification and a lack of criteria for setting country-specific reservations, and it did not carry out sufficient work at that level; and
(c) reporting: the verifications have not been ad-equately reported.
Vii.
the c ourt’s audit found cases of material non-compli-
ance with Esa95 or lack of quality of Gni estimates in 
terms of their reliability, comparability and exhaustive -
ness, which the c ommission had not detected.Viii.the c ourt recommends in particular that:
(a) the c ommission carry out a structured and formal -
ised planning and prioritisation exercise, reduce 
the duration of the verification cycle and limit the 
use of general reservations;
(b) the c ommission carry out a more focused verifica-
tion of material and risky Gni components on the 
basis of risk assessment, paying particular atten -
tion to the exhaustiveness of Gni, where possible 
assess the potential impact or the amount at risk of its findings, and set materiality criteria for plac-
ing specific reservations;
(c) the assessment reports on the Member states’ Gni  
include a more complete, transparent and consist -
ent overview of the results of the c ommission’s 
verifications; the annual opinions of the Gni c om-
mittee (i) include a clear assessment of whether 
the Member s tates’ G ni data are appropriate for 
own resource purposes, (ii) comply with the re -
quirements of the Gni regulation, and (iii) are ap -
propriately used in the budgetary procedure as 
provided for in the own resources’ regulation; the 
annual activity reports of dG Budget and Eurostat provide a true and fair view of the verification of Member states’ Gni data, and of the management of Gni-based own resources.EXECutIvE Summar Y
12
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification1. the Eu budget is financed from own resources and other revenue. there 
are three categories of own resources1: traditional own resources (cus-
toms duties collected on imports and sugar production charge, tor), 
own resources calculated on the basis of value added tax collected by 
Member states, and own resources derived from Member states’ gross national income (G ni) (‘G ni-based own resources’). Chart 1 shows the E u 
revenue budget for 2012. Gni-based own resources
2 is its main source.
2. after taking into account the total of tor , Vat-based own resources and 
other revenue, the Gni-based own resources due is the amount needed 
to balance the budget. this is collected from each Member state ac-
cording to its Gni. Annex I provides an overview of each Member state’s contribution of Gni-based own resources for 3 indicative years: 2002, 
2007 and 2010.INtroduC tIoN
1 council d ecision 
2007/436/Ec, Euratom of 
7 June 2007 on the system of the European c ommunities’ 
own resources ( oJ L 163, 
23.6.2007, p. 17) (‘own resources’ decision’), and council r egulation (Ec, 
Euratom) no 1150/2000 of 22 May 2000 implementing decision 94/728/Ec, Euratom 
on the system of the European c ommunities’ own 
resources ( oJ L 130, 31.5.2000, 
p. 1), as amended (‘own resources’ regulation’).
2 these include 
chapters 14 ‘Gni ’ and 32 ‘Gni 
balances’ of the budget.
chArt 1
eu revenue budGet 2012
GNI-based own resources
98 140 million euro 
(70 %)Other revenue and corrections
8 556 million euro
(6 %)Surplus from previous year
1 497 million euro
(1 %)
Traditional own resources (TOR)
16 454 million euro
(12 %)
VAT-based own resources
14 894 million euro
(11 %)
Source: European c ourt of a uditors (based on the c ommission’s financial reports).
13
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
INtroduC tIoN
3. any overstatement (or understatement) of Gni for a particular Member 
state — while not affecting the overall G ni-based own resources — has 
the effect of decreasing (or increasing) the respective contributions from 
the other Member states. Annex II provides an overview of the calcula-
tion of Gni-based own resources.
4. Gni data are macroeconomic aggregates resulting from Member states’  
statistical processes. this report sets out the c ourt’s audit on the effec-
tiveness of the c ommission’s verification of the Gni data used for own 
resource purposes. i t assesses to what extent the verification work car -
ried out by Eurostat was prioritised, determined whether the quality of Member states’ Gni data needed to be improved and was reported ad-
equately. i n its special r eport no 12/2012
3, the c ourt assessed whether 
the c ommission and Eurostat had improved the process for producing 
reliable and credible European statistics.
5. the estimation of Gni includes a large number of different components 
to be measured using the best available statistical sources and methods. 
these compilation procedures should comply with the requirements of 
the European s ystem of national and r egional a ccounts (Esa95)4. it is 
a complex process. Chart 2 shows the process of compiling national accounts from which Gni data are derived.3 special r eport no 12/2012 
did the c ommission and 
Eurostat improve the process 
for producing reliable and credible statistics?  (http://eca.europa.eu).
4 council r egulation (Ec ) 
no 2223/96 of 25 June 1996 on the European system of national and regional accounts in the c ommunity 
(oJ L 310, 30.11.1996, p. 1), as 
amended.
chArt 2
compil Ation process of nA tionAl Accounts
Compila tion pr ocessSources
Methods
GNI In ventory
Description of the procedures 
and basic statistics used to make estimates for the various GNI components.Transmitted to Eurostat in the GNI Questionnaire, accompanied by the Quality Report (description of the main changes in the compilation procedures 
compared to previous years).Annual GNI da ta
Source: European c ourt of a uditors (Eca).
14
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification6. although Gni data necessarily involve a certain degree of inaccuracy 
due to the application of estimation techniques and judgement, their compilation is also subject to risks resulting from the use of sources and 
methods which may not appropriately measure the economic activities 
in accordance with Esa95 accounting rules
5. for example, the use of 
incomplete or out-of-date sources weakens the quality of national ac-
counts in terms of their reliability, comparability and exhaustiveness.
7. Chart 3 shows the link between the compilation of Gni data and the 
calculation of Gni-based own resources, highlighting the importance 
of the c ommission’s verification process for the correct calculation and 
thus fair distribution of the individual Member state’s contributions.5 in particular those relating 
to production, expenditure 
and income, which are relevant for the estimation of the Gni components.
chArt 3
link between Gni  dAtA And the c Alcul Ation of Gni-b Ased own resources
MethodsGNI-based own resourcesMember States’ GNI-based 
own resources is the main source of EU revenue budget.
Eﬀective veriﬁcation of GNI data by the 
Commission is crucial to ensure that Member States’ respective contributions are correctly and fairly calculated.
Commission’s veriﬁcation 
of Member States’  GNI data 
(see paragraphs 10 and 11)EU revenue budget
(see Chart 1)
Member States’ contributions
Compilation of Member
States’ GNI data
(see Chart 2)
Source: Eca.
15
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification8. the Gni regulation6 stipulates that the c ommission should verify the 
sources and methods used by Member states to calculate Gni, which 
should be assessed with respect to reliability, comparability and ex -
haustiveness. the c ommission should therefore review the compilation 
procedures applied by Member states for the estimation of Gni in order 
to assess whether these comply with Esa95. Effective verification of Gni  
data is crucial to ensure fairness.
9. Gni data, and national accounts statistics in general, are important indi-
cators for policymakers to take key decisions on fiscal and monetary poli-
cies. i n addition, gross domestic product (Gdp) and/or Gni aggregates 
are used for other purposes such as in the context of the excessive deficit procedure (Edp)
7 and to allocate Eu expenditure between Member states 
in the area of cohesion8.
verific Ations c Arried out by the c ommission 
on Gni  dAtA used for own resources
responsibilities within the c ommission And the role of the 
Gni  committee
10.  dG Budget is the authorising officer by delegation for all own resources, 
whereas the verification of Gni data provided by Member states for the 
calculation of own resources is carried out by Eurostat.
11.  t he c ommission is assisted in its verification work by the Gni c ommittee 
which is composed of representatives from the Member states’ national statistical institutes (nsis) and chaired by Eurostat. this c ommittee has 
advisory powers including: the adoption of an annual opinion on the appropriateness of Member states’ Gni data to be used for own resource purposes (see paragraph 15); the expression of views on methodological issues; and the interpretation of E sa95 in order to improve the compila-
tion of Gni data.6 council r egulation 
(Ec, Euratom) no 1287/2003 
of 15 July 2003 on the harmonisation of gross national income at market prices (‘Gni regulation’)  (oJ L 181, 19.7.2003, p. 1).
7 see article 126 of tfEu 
and c ouncil r egulation (Ec ) 
no 479/2009 of 25 May 2009 on the application of the protocol on the excessive deficit procedure annexed to the treaty establishing 
the European c ommunity 
(oJ L 145, 10.6.2009, p. 1), as 
amended.
8 interinstitutional 
agreement between the European p arliament, the 
council and the c ommission 
on budgetary discipline and sound financial management (oJ c 139, 14.6.2006, p. 1).
16
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationverific Ation work
12.  t he verifications carried out by the c ommission are based on a control 
framework set up by Eurostat and approved by the Gni c ommittee. f or 
the examination of Member s tates’ G ni data for the period 2002–10, this 
control framework is mainly based on the verification of the Member 
states’ sources and methods used to compile Gni data (‘Gni inventories’).
13.  t his work includes desk checks on the compilation procedures for all Gni  
components (the ‘comprehensive approach’) by means of the Gni i nven-
tory a ssessment Questionnaire (Gia Q)9. in addition, direct verification 
of one or two Gni components has also been performed since 2007. By 
means of this approach Eurostat aims to verify whether the description 
of sources and methods in the Gni i nventory10 reflects the compilation 
practice actually applied, without making its own estimation of Gni com-
ponents. Annex III illustrates the cycle of the c ommission’s verification 
of Member states' Gni inventories.
reportinG  requirements
14.  a t the end of the verification cycle, Eurostat prepares assessment reports 
summarising its analysis of the quality of Member states’ Gni data and including matters for improvement. these reports are presented to the 
Gni c ommittee and are used as a basis for the c ommission to set specific 
reservations. t he Box  explains what Gni reservations are and when they 
are used.
15.  t he Gni c ommittee examines the Gni questionnaires and quality reports 
transmitted by Member states each year. i t issues an opinion on the ap -
propriateness of the Gni data for own resource purposes ‘with respect 
to reliability, comparability and exhaustiveness taking into account the 
cost–benefit principle’11.9 this questionnaire includes 
265 detailed questions to be 
addressed. 
10 this includes also the 
process tables (pt s) providing 
a quantitative dimension of the Gni compilation process.
11 see article 5(2)(b) of the 
Gni regulation.
17
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification16.  t he Gni c ommittee opinion is taken into consideration by dG Budget 
in the context of the calculation of the adjustment to balances of Gni-
based own resources. only changes to Gni data of previous years subject 
to this opinion can give rise to budgetary adjustments.
17.  a s set out in the financial regulation12 , the authorising officer by del-
egation reports on the performance of his/her duties in the form of an annual activity report ( aar). the financial regulation requires that the 
aar  indicate the results of operations by reference to the objectives set, 
the risks associated with these operations, the use made of the resources 
provided and the efficiency and effectiveness of the internal control 
system. the aars of dG Budget and Eurostat report on the management 
of Gni-based own resources.12 see article 60(7) of c ouncil 
regulation (Ec, Euratom) 
no 1605/2002 of 
25 June 2002 on the f inancial 
regulation applicable to 
the general budget of the European c ommunities 
(oJ L 248, 16.9.2002, p. 1), as 
amended.
box
Gni  reserv Ations
Gni reservations are a tool enabling Gni data of a given year to be revised after the statutory 4-year cut-off 
point. their setting is notified by the c ommission (or exceptionally by Member states) in accordance with 
article 10(7) of the own resources’ regulation.
General reservations cover the compilation of all Gni components of a Member state, and have been mainly 
used where Eurostat’s assessment of the Gni i nventory takes longer than 4 years. When Eurostat’s verification 
is complete, these reservations are lifted and replaced by specific reservations.
specific reservations cover the estimate of discrete Gni components. these are set on a Member state and 
are lifted as soon as Eurostat confirms that the required improvements in the compilation procedures are im-
plemented in national accounts by the nsis.
18
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationaudIt SC opE, approa Ch aNd mE thodoloGY
18.  t he c ourt’s audit examined whether the c ommission’s verification of Gni  
data used for own resource purposes was well structured and focused. 
it covered the c ommission’s verification of the Eu-2513 Member states’  
Gni data for the period 2002–0714, focusing on the Eurostat verification 
of Gni i nventories. this verification cycle was completed in January 2012.
19.  t he c ourt’s assessment addressed the three following questions:
(a) did Eurostat appropriately plan and prioritise its verification work?
(b) did Eurostat examine effectively the quality of Gni data in respect of reliability, comparability and exhaustiveness? and
(c) Were Eurostat’s verifications adequately reported (in terms of com-pleteness, transparency and consistency)?
20.  t he audit concentrated on Eurostat’s verification work (see paragraph 30). 
the c ourt reviewed the files of a sample of 10 Member states (see Annex 
I). audits on-the-spot audits were carried out by the c ourt in five of these 
Member states. an overview of the audit approach and methodology is presented in Annex IV.
21.  t he audit criteria used for assessing the c ommission’s performance are 
based on a set of good practices of verification arrangements drawn up by the c ourt taking into account the Eu rules and the relevant internal 
control principles
15.
22.  t hese practices include notably the following:
 ο qualitative risk assessment and cost–benefit analysis in prioritising and 
planning the verification;
 ο the in-depth verification16 of selected risky and material Gni components;
 ο the completeness, transparency and consistency in the reporting on the verification work carried out.13 for the Eu-10 the Gni data 
only refer to the period 2004–
07. Eurostat’s verification of Gni for Bulgaria and romania was only completed 
in January 2013, so these Member states are excluded from the audit scope.
14 Gni data for the years 2008 
–10 are excluded from the scope of the c ourt’s audit as 
they had not been closed when the audit started.
15 committee of sponsoring 
organisations of the treadway c ommission 
(coso) framework which is 
used by the c ommission as 
a reference for its supervisory and control systems.
16 this term is used to refer 
to the tests carried out by the court, as opposed to direct 
verification, which refers to the work carried out by the commission. they are similar 
even though the scope and objectives of ‘in-depth verification’ are broader than those of ‘direct verification’ . neither control procedure includes the calculation of its own estimate of Gni components.
19
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
23.  t hey are described in more detail in a consolidated framework, the 
‘court’s control model’ (see Annex V).
20
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationobSErvatIoNS
17 see article 5(2)(b) of the 
Gni regulation.the c ommission’s verific Ation c An be 
expected to improve the qu Ality of member 
stAtes’ Gni  dAtA, however…
24.  t he c ommission visited Eu-25 Member states and analysed their Gni  
inventories between the beginning of 2007 and the beginning of 2012. 
this resulted in the setting of numerous specific reservations which can 
be expected to improve the quality of Member states’ Gni data.
… the verific Ation w As not sufficiently 
structured And focused bec Ause … 
25.  t he following observations result from the use by the c ourt of good 
practices in its verification of Gni data (see paragraphs 21 to 23). the 
former are presented in terms of the verification strategy/approach, the 
verification process and the reporting.
… eurost At did not AppropriA tely pl An And 
prioritise its work
26.  a successful verification approach requires planning to ensure that re -
sources focus on the highest priority areas. this is particularly important 
in a very complex statistical area such as national accounts, where an adequate assessment of the compilation process based on the com-
prehensive approach is not possible because of the limited resources available.
27.  t he court used a ‘focused approach’ , according to which the criteria to 
prioritise the areas for verification are based on a qualitative risk assess -
ment of the compilation of national accounts (see paragraphs 31 and 
32) and a cost–benefit analysis (see paragraphs 33 to 36).
28.  i n the c ourt’s view, the c ommission did not appropriately plan and pri-
oritise its verification of Member states’ Gni data by applying the cost–
benefit principle, which would take into account the materiality of each 
Gni component and a qualitative assessment of the associated risk in its 
compilation. Eurostat did not report clearly and in a timely manner to the Gni c ommittee on cases where the cost–benefit principle is considered 
to apply
17.
21
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
obSErvatIoNS
29.  i n august 2011, the internal audit department18 of Eurostat also raised 
concerns about the lack of consideration of risk in planning the verifica-
tions. i t recommended the implementation of a risk matrix for planning, 
including the selection of components for direct verification and the 
identification of issues by comparative analysis between Member states 
and over time. this recommendation had not been implemented by 
september 2013.
30.  i n order to demonstrate whether its focused approach would give added 
value to the effectiveness of the commission’s verification system, the 
court compared the results of Eurostat’s verification with its own audit 
work in the 10 selected Member states, as set out in the following sec-tions (see paragraphs 37 to 76).
risk Assessment of Gni  components not AppropriA tely 
cArried out
31.  t he c ourt carried out a qualitative risk assessment for the 10 selected 
Member states mainly based on the qualitative description of sources 
and methods included in the Gni inventories. this identified those Gni  
components whose compilation was subject to a higher risk of non-compliance with Esa95.
32.  t he risk assessment matrix used and the results of its application are 
presented in Annex VI  and Annex VII  respectively. Eurostat did not carry 
out a structured exercise of this kind.
cost–benefit AnAlysis not properly c Arried out
33.  t he c ourt carried out a cost–benefit analysis to plan and prioritise its 
audit work. this was based on a qualitative risk assessment which also 
took into account the relative size of the Gni components in the total 
economy. the results are presented in Annex VIII.18 the internal audit 
capability (iac ).
22
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification34.  t he resulting risk-size indicator prioritises the Gni components to be veri-
fied in each Member state, and facilitates comparisons over time for each 
Member state and/or between Member states. thus, the c ourt selected 
the Gni components to be examined through in-depth verification and/
or desk review in the Member states. the c ourt found that Eurostat only 
carried out direct verification on one of the G ni components with the 
highest risk-size indicator according to the c ourt’s cost–benefit analysis 
in the 10 selected Member states19.
35.  t he c ourt compared the results of its own cost–benefit analysis with the 
Gni components on which Eurostat reported ‘action points a ’20 that may 
have a significant impact on the calculation of Gni, and with all those on 
which Eurostat carried out direct verification in the 10 Member s tates 
under review.
36.  t his comparative analysis revealed that Eurostat only covered the com-
pilation of most of the material and risky Gni components in its verifica-
tion of p oland. i n the other nine selected Member states Eurostat did 
not require improvements in and/or clarifications of the compilation process, and did not carry out direct verification on the following four significant areas (exceeding the reference threshold of 5 in the value of the risk-size indicator):
 ο manufacturing nacE d (r ev. 1) representing between 12 % and 21 % of 
their Gni;
 ο wholesale and retail trade, and repair nacE G (r ev. 1)
21 representing be -
tween 10 % and 12 % of their Gni;
 ο real estate, renting and business activities nacE K (r ev. 1)22 representing 
between 14 % and 18 % of their Gni;
 ο taxes minus subsidies on products23 representing between 10 % and 13 % 
of their Gni.19 in Belgium for the 
compilation of real estate, 
renting and business activities nacE K (r ev. 1).
20 such points relate to 
improvements in statistical methods, more exhaustive and updated sources and actions to comply with Esa95. a ction points B, c, d 
and E as well as transversal issues (not reported as action points a) were excluded from this analysis.
21 Belgium, Germany, spain, 
france, i taly, the netherlands 
and a ustria.
22 spain, i taly, a ustria and 
sweden.
23 Belgium, f rance, i taly, the 
netherlands, a ustria, s weden 
and the united Kingdom.
23
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification… eurost At did not Apply A consistent 
verific Ation Appro Ach between member 
stAtes
37.  t he application of the control procedures underlying the c ommission’s 
framework should ensure a consistent approach across Member states 
in terms of intensity and level of detail in Eurostat’s checks.
38.  Eurostat’s verification of Gni inventories relating to the 10 selected Mem-ber states was reviewed and the c ourt found that Eurostat had not 
consistently applied its control procedures in the Member states.
checks b Ased on the Gni  inventory Assessment 
questionnAire not Adequ Ately documented
39.  t he verification carried out by Eurostat was not adequately documented. 
this prevented the c ourt from fully assessing whether the c ommission’s 
control procedures had been applied consistently in the Member states 
and whether the c ommission’s management supervision had been car -
ried out properly.
 ο some of the questions of the Gia Q were not answered24.
 ο Varying levels of detail were given in the answers to the Gia Q25.
 ο it was not always possible to make a clear link between the Gia Q and the 
action points reported in Eurostat’s mission reports26.
 ο Eurostat’s follow-up of action points could not be examined in cases 
where the log-file was not updated and/or not sufficiently detailed27.24 More than 20 questions 
were not completed in 
respect of p oland and the 
united Kingdom.
25 insufficient details were 
included in the answers for Belgium, f rance, i taly and the 
netherlands.
26 Belgium, f rance, i taly and 
the netherlands.
27 Belgium, spain, i taly and 
the netherlands.
24
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationweAknesses in the performAnce of direct verific Ation
40.  t he guidelines adopted by the Gni c ommittee include several general 
criteria to select Gni components to be examined for direct verification28. 
However no guidance is provided on how to apply such criteria. Eurostat 
selected areas to be analysed on different bases from Member state to 
Member state and so a consistent approach was not applied.
41.  f or 8 of the 10 reviewed Member states29 there was no evidence that 
Eurostat had verified checks made by the nsis on the input data used for 
estimating the selected components. this raises doubts as to whether 
supervisory and control systems for the compilation of national accounts 
in these nsis were adequately assessed by Eurostat.
42.  t he legal basis under which Eurostat performed its direct verification was 
the G ni regulation30. Given the objectives and scope of direct verifica -
tion, in the c ourt’s view the more appropriate legal basis would have 
been the own resources’ regulation31. the latter does not foresee the 
participation of other Member state nsis in the inspections and sets out specific deadlines for formal c ommission reporting and the Member 
states’ replies
32. this legal basis was not used by Eurostat in the context 
of this verification cycle.
lAck of criteriA  for settinG  country-specific reserv Ations
43.  Eurostat did not define any criteria to decide which points included in the assessment reports (see paragraphs 79 to 82) should become country-specific reservations. i t did not attempt to calculate the poten-
tial impact on Gni of the required improvement actions underlying the reservations. thus it was not possible to assess whether the 103 specific 
reservations set on the Eu-25 Member states (see Annex IX) comply with 
the cost–benefit principle (see paragraph 28).
44.  c ases of inconsistent setting of country-specific reservations by the c om-
mission are reported in paragraphs 62 to 64.28 the selection of 
components for direct 
verification may take into account the following criteria: referring to parts that are representative of the compilation and estimation process of Gni, covering calculations which involve a number of adjustments and considering potential risk areas of the process.
29 all except a ustria and 
poland.
30 ‘information visits’ set out 
in article 6.
31 ‘control visits’ set out in 
article 19.
32 3 months for the 
commission and 3 months 
for the Member states.
25
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationtrAnsversAl specific reserv Ations set inAppropriA tely
45.  although not explicitly envisaged in the procedures adopted by the Gni  
committee, the c ommission set six ‘transversal’33 specific reservations. 
these reservations are defined by the c ommission as points notified to 
all Member states with the aim of enabling Eurostat to make a compari-
son of the underlying compilation in order to improve the estimation of Gni.
46.  t he c ourt found cases where these reservations were not justified as 
Member states were not affected by the underlying compilation is-
sues (e.g. in the case of the treatment of cooperative dwellings where 14 Member states declared they did not have these transactions
34), and 
their impact on the quality of national accounts was not significant (e.g. in the case of the treatment of entities with little or no physical pres-
ence where the expected impact on Gni is limited and mainly concerns 
small Member states).
… eurost At did not c Arry out sufficient 
work A t member st Ate level
47.  Eurostat should carry out sufficient work at nsi level to cover the main risks relating to the compilation of national accounts (see Annex VI) so 
as to be able to make an adequate assessment of the quality of G ni data 
in Member states.
limited scope in eurost At’s verific Ation of Gni  inventories
48.  t he evidence included in Eurostat’s files did not demonstrate that key 
compilation issues had been examined sufficiently in-depth as explained below.33 cross-border property 
income, financial 
intermediation services indirectly measured (fisiM), illegal activities, car scrap schemes, cooperative dwellings and entities with little or no physical presence.
34 Belgium, Bulgaria, Estonia, 
Greece, f rance, c yprus, Latvia, 
Lithuania, Hungary, Malta, the netherlands, r omania, 
slovenia and the united Kingdom.
26
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationinAdequ Ate ex Amin Ation of the business reGisters ( brs) And of the 
clAssific Ation of institutionAl units And tr AnsA ctions in the Gener Al 
Government (GG) sector
49.  t he quality of the Brs35 and the availability of detailed data, enabling 
a correct classification of the institutional units and transactions, are 
key elements for compiling national accounts. the examination of the 
completeness of Brs, as well as the application of the market/non-market criteria
36 and the classification of transactions in the institutional sector 
of general government (GG) fall under the responsibility of other depart -
ments in Eurostat, not the one in charge of the verification of Gni data 
for own resource.
50.  f or the 10 selected Member states there was no evidence that Eurostat’s 
department in charge of the verification of Gni data sufficiently exam-
ined these issues either by performing its own checks or by reviewing 
the results of the other responsible departments. the related risks in 
terms of the compilation of the national accounts were therefore not 
properly addressed due to insufficient coordination between Eurostat’s departments.
51.  t his is confirmed by the inadequate adjustment (based on information 
more than 20 years old still being used) made in the German national accounts to address the poor quality of the Br (see Table 1 , point 2), 
and by the classification of public hospitals and the recording of part of their revenue in a ustria which are not compliant with Esa95.
52.  f ollowing its visits to a ustria from 2007 to 2012, Eurostat’s department in 
charge of the excessive deficit procedure (Edp) raised the possibility that the nsi might not have properly applied the market/non-market criteria 
to classify public hospitals in the national accounts. this observation 
was not taken into account by Eurostat’s department responsible for the 
verification of Gni data for own resource purposes. a country-specific reservation should have been placed by the c ommission on this issue.35 Br includes information 
on the active population of 
statistical units engaged in an economic activity, their local units, the legal units which make up those enterprises, and enterprise groups. the 
Br should be updated on a regular basis. the analysis of 
the population of enterprises included in the Br should be the starting point for the compilation of Gni under the production approach.
36 see paragraph 3.27 to 3.37 
of Esa95. i n particular if less 
than 50 % of the production costs are covered by sales, the institutional unit is a non-market producer and may be classified in the GG sector.
27
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification53.  t he c ourt’s desk review found that funds disbursed by GG to cover the 
operating losses of these hospitals are recorded in a ustria as subsidies on 
products granted to services in the area of health care. these represent 
about 1,5 % of Gni per year37. Esa9538 does not allow payments of ser -
vices in the context of social risks or needs to be recorded as subsidies. 
Eurostat did not carry out any specific checks on this Gni component 
in order to assess whether the recorded transaction should have been 
classified as social transfers in kind. this reclassification would increase 
the estimation of the a ustria’s Gni.
lAck of evidence of/ And restricted scope of eurost At’s verific Ation
54.  t he quality of Eurostat control files in respect of Belgium, i taly and the 
netherlands prevented the court from fully examining the work carried 
out. i t was not possible to assess whether — for the Gni components it 
selected for these three Member states — the c ommission covered any 
of the key controls drawn up by the c ourt.
55.  t his calls into question Eurostat’s compliance with the requirements of 
the i nternal c ontrol standards (ics), according to which adequate docu-
mentation of the work carried out is required not only to allow proper 
management supervision but also to ensure operational continuity over 
time39.
56.  Moreover, Eurostat did not cover the following points in the 10 Member states examined by the c ourt:
 ο the assessment of the availability and possible use of other sources in the compilation process;
 ο the classification of units in institutional sectors other than general gov-ernment (GG)
40;
 ο the application of recommendations included in the Manual of Govern-
ment d eficit and d ebt and/or the consideration of the views put forward 
by the c ommittee on Monetary, f inancial and Balance of p ayments sta-
tistics ( cMfB) whenever relevant for the compilation of gross domestic 
product (Gdp) and Gni.
 a ddressing these three issues would improve the quality of the com-
pilation procedures in national accounts thus having an impact on the 
estimation of Gni data.37 this was calculated on the 
basis of the data published 
by Eurostat referring to the years 2004–07.
38 see paragraph 4.38 
according to which the following cannot be treated as subsidies: ‘(j) payments made by general government to market producers to pay entirely, or in part, for goods and services that those market producers provide directly and individually to households in the context of social risks and needs (see paragraph 4.84), and to which the households have a legally established right. t hese payments 
are included in individual consumption expenditure of general government, and subsequently in social benefits in kind and actual individual consumption of households.’
39 in particular, ics 
no 9 ‘Management supervision’ and no 10 ‘Business continuity’ . s ee 
communication to the 
commission ‘r evision of the 
internal control standards and underlying framework — strengthening control effectiveness’ , sEc(2007)1341 of 16.10.2007.
40 in particular, for non-
financial corporations, households (HH) and non-profit institutions serving households (npisH). t he 
classification of the latter sector was properly covered in the united Kingdom as a specific reservation was set by the c ommission.
28
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationproblems reGArdinG  compliAnce with esA95  And the qu Ality 
of nA tionAl Accounts’ estimA tes not detected by eurost At
57.  t he c ourt audited five of the 10 Member states on-the-spot. this  audit 
revealed problems in compliance with Esa95 and in the reliability, com-
parability and exhaustiveness of national accounts’ estimates which were 
not detected by Eurostat. Table 1 provides an overview of the main findings and includes information on the potential impact of the adjust -
ments needed to correct them (when quantifiable) and on the relative size of the items at risk (when the impact is non-quantifiable
41). this 
information results from the c ourt’s in-depth verification of selected 
Gni components, and includes an assessment based on data42 provided 
by the nsis without making any alternative statistical estimations.
58.  f or each of the non-quantifiable observations, the share of Gni at risk is 
the relative size of the component in the economy. the court established 
two materiality thresholds: for quantifiable observations the potential 
impact of the adjustments needed exceeds 0,2 % of Gni, and for non-
quantifiable observations the relative size of the Gni components at risk exceeds 0,5 % of Gni.41 this means that their 
impact on Gni is unknown.
42 in general, these relate to 
the compilation of Gni for the 
most recent benchmark or reference year.
29
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
observationsadditional specific country description, assessment of the impact on Gni and/or share of Gni at risk
Germany spain france italy united k ingdom
1. Incorrect treatment of 
rents on land in national accountsRents on land not deducted from Intermediate Consumption (IC) in some casesRents on land not deducted from IC and Output in some cases Not ApplicableRents on land not deducted 
from Output (excluded from 
the reservation set by the Commission) Not Applicable
Non-material finding (share of GNI at risk: 0,05 %)Non-material finding (share of GNI at risk: 0,15 %)Non-material finding (share of GNI at risk: 0,15 %)
2. Cut-off adjustments based on out-of-date assumptions or conceptual 
adjustments not madeCut-off adjustments for 
own account Output, small tools and Business Register (BR) based on out-of-date assumptionsNot Applicable Not Applicable Not ApplicableConceptual adjustments not made for small tools, occupational health and staff training costs, staff travel and subsistence
Material finding (share of GNI at risk: 0,73 %)Not measurable finding
3. Insufficient coverage or weaknesses in the estimation of the underground economyInadequate consideration of misreporting, unregistered units and tax fraudInadequate consideration of misreporting and VAT fraud without complicityExhaustiveness adjustment for unregistered units based on out-of-date assumptions and not documentedWeaknesses in the estimation of exhaustiveness adjustments for unrecorded employment and for misreportingNot Assessed (due to the existing specific reservation set by the Commission on this issue)
Material finding (share of GNI at risk: 1,59 %)Material finding (share of GNI at risk: 6,31 %)Material finding (share of GNI at risk: 0,74 %)Material finding (share of GNI at risk: 11,81 %)
4. Incorrect recording of EU grants in national accounts
s- Not Assessed (due to the existing specific reservation set by the Commission on this issue)- - -
Non-material finding (impact on GNI: +0,11 %)Non-material finding (impact on GNI: +0,09 %)Non-material finding (impact on GNI: +0,11 %)Non-material finding (impact on GNI: +0,11 %)
5. Insufficient quality of estimates made for 
distribution marginsDistribution margins by 
product not calculated according to the method 
recommended by the GNP 
CommitteeNot Applicable Not Assessed Not Applicable Not Applicable
Material finding (share of GNI at risk: 10,60 %)
 Non-quantifiable observations  Qua ntifiable observations  Not  measurable observationstAble 1
potentiAl imp Act of the c ourt’s findinGs on the qu Ality of member st Ates’ Gni
30
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
observationsadditional specific country description, assessment of the impact on Gni and/or share of Gni at risk
Germany spain france italy united k ingdom
6. Insufficient quality of 
estimates made for renting (NACE K rev. 1)Recording of financial leasingNo estimation of production of software for own-final use for non-market  
producersUnderstatement of Intermediate consumption (IC) for housing servicesUnderstatement of IC for housing services
Not Applicable
Non-material finding (share of GNI at risk: 0,29 %)Non-material finding (impact on GNI: +0,01 %)Material finding (impact on GNI:–1,18 %)Material finding (impact on GNI:  –1,50 %)
7. Insufficient quality of estimates made for health and social work (NACE N rev. 1)Not AssessedInsufficient quality in the estimate of market producers other than hospitalsWeaknesses in the 
estimation of social work 
activities Not Assessed Not Assessed
Material finding (share of GNI at risk: 1,77 %)Non-material finding (impact on GNI: +0,15 %)
8. Classification and valuation of NPISH not compliant with ESA95 (gross value added or 
expenditure)- - -
Not ApplicableNot Assessed (due to the 
existing specific reservation set by the Commission on this issue)Material finding (share of GNI at risk: 1,78 %)Material finding (share of GNI at risk: 0,87 %)Material finding (share of GNI at risk: 0,73 %)
9. Incorrect or inconsistent accounting treatment of revenue, taxes and subsidiesNot Assessed Not AssessedIncorrect recording of the tax on car circulation and revenue from municipalities Not AssessedInconsistent accounting 
treatment of taxes and 
subsidies on products due to weaknesses in the compilation procedure of transition from Output at producer’s prices to basic prices
Non-material finding (impact on GNI: +0,04 %)Material finding (share of GNI at risk: 6,87 %)
Total of impact on GNI  
(quantifiable observations)+ 0,11 % + 0,01 % – 0,90 % – 1,39 % + 0,11 %
 Non-quantifiable observations  Qua ntifiable observations  Not  measurable observationstAble 1
Source: Eca (based on its in-depth verification of Gni components).
31
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationcountry-specific reserv Ations not set by the c ommission
59.  Based on the court’s thresholds, specific reservations should have been 
placed by the c ommission on the following issues:
 ο adjustments based on out-of-date assumptions (information more than 
20 years old still being used) in Germany; these adjustments represented 
a total of 0,73 % of the Gni of Germany;
 ο insufficient coverage of the underground economy43 in Germany and 
spain, and weaknesses in the estimation of this component in f rance 
and i taly;
 ο insufficient quality in the estimation of distribution margins in Germany;
 ο insufficient quality in the estimation of renting services in f rance44 and 
italy;
 ο insufficient quality in the estimation of health and social work in spain 
(a significant part of these estimates was based on a survey of the year 2000 covering only the community of Madrid whose representativeness 
was not assessed);
 ο classification and valuation of non-profit institutions serving households (npisH) not fully compliant with Esa95 in Germany, spain and f rance, (the 
gross value added or the expenditure of this sector represents between 0,7 % and 1,8 % of these Member states’ Gni); and
 ο inconsistent accounting treatment of taxes and subsidies on products in 
the valuation of output in the united Kingdom.
estim Ation of the under Ground economy not fully comp ArAble between 
member st Ates
60.  t he compilation procedures used for estimating the underground econ-
omy by the five Member states audited on-the-spot are not fully com-
parable because they do not always follow the commission’s guidelines 
on exhaustiveness45.
61.  Given the significant levels of the underground economy as estimated by the nsis, an improvement in the quality of these estimates would have 
had a material impact on G ni. this effect cannot however be quantified.43 national accountants are 
particularly concerned about 
ensuring that the economic activities are measured comprehensively including those that are hidden (that is the ‘underground economy’) as well as those that are simply described as informal.
44 the estimate of 
intermediate consumption for households amounted to 3,3 % of the output, whereas the rate applied in the other institutional sectors exceeded 15 %. such a large difference shows that there are problems in the compilation of this component.
45 in particular, c ommission 
decision 94/168/Ec, Euratom 
of 22 f ebruary 1994 on 
measures to be taken for the implementation of council directive 
89/130/EEc, Euratom on the harmonisation of the compilation of gross national product at market prices ( oJ L 77, 19.3.94, 
p. 51), c ommission d ecision 
98/527/Ec, Euratom of 24 July 1998 on the treatment for national accounts purposes of V at fraud (the 
discrepancies between theoretical V at receipts 
and actual V at receipts) 
(oJ L 234, 21.8.98, p. 39) and 
Gni c ommittee document 
no 50 of July 2005 on ‘Eurostat’s tabular approach to exhaustiveness guidelines’ .
32
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationthe settinG  of specific reserv Ations by the c ommission w As not Alw Ays 
consistent
62.  t he findings in Table 1 classified as non-material represent less impor -
tant issues on which it is not necessary in the c ourt’s view to set specific 
reservations. nevertheless, it is noted that for some of these points the 
commission set a country-specific reservation on a Member s tate with -
out checking whether the same compilation problem existed in other Member states in order to ensure equal treatment.
63.  t he c ommission should not have placed reservations on these points or 
it should have set reservations on all Member states in which improve -
ments were required. the following are examples where there was an 
inconsistent setting of country-specific reservations by the commission 
(see Annex IX).
 ο a reservation was set on spain because of the incorrect treatment of small 
tools in national accounts, whereas no reservation was placed on the 
united Kingdom which has comparable problems on the recording of 
this component.
 ο another reservation was set on spain concerning the recording of Eu  
grants, whereas no reservations were placed on Germany, f rance, i taly 
and the united Kingdom which do not properly record these transac-
tions either.
 ο a reservation was set on i taly46 on the recording of rents on land, whereas 
no reservations were placed on Germany and spain which do not properly 
record these rents either.
 ο a reservation was set on p oland due to the failure to make an estimate for 
software for own-final use, whereas no reservation was placed on spain which does not record this type of software for non-market producers either.
64.  t hese problems would not have occurred if the c ommission had set cri-
teria for placing country-specific reservations (see paragraph 43) and car -
ried out sufficient work at Member state level to avoid inconsistencies.46 the scope of this 
commission’s reservation 
did not however cover the 
deduction of rents on land from output.
33
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationbetter-focused verific Ation would hA ve An imp Act on 
member st Ates’ rel Ative contributions
65.  Table 1 sets out the c ourt’s assessment of the results of failure to ap -
ply Esa95 correctly and of lack of quality in respect of 19 selected Gni  
components in five Member states. these problems in the compilation 
of national accounts’ estimates have had no effect on the overall Gni-
based own resources available to finance the Eu budget47, but they are 
relevant to the calculation of individual Member states’ contributions.
66.  t he annual contributions for the period 2002–07 of the Member states 
visited would have been different if Esa95 had been correctly applied and the quality of the estimates had been adequate. a s the c ommission 
did not place any reservations on these issues, it can no longer take these impacts into account for the budget by adjusting the G ni balances. 
it is not possible however, on the basis of the work done by the court, 
to state what those contributions should have been.
 ο the scale of the potential impact of the quantifiable observations on the 
annual contributions to the budget of the Member states visited ranged 
from + 0,4 % to –1,1 %.t his assumes that no other changes would have 
been needed for Gni components in the five Member states concerned, or in the Gni estimates of the other 22 Member states.
 ο the weaknesses leading to the non-quantifiable observations may also 
affect the calculation of Member states’ contributions: by definition it is not possible reliably to estimate their impact.
67.  t he c ourt’s examination of selected Gni components in five Member 
states thus demonstrates that a better-focused verification could have an impact on Member states’ relative contributions to the budget.47 changes in the estimated 
Gni of individual Member 
states would affect the estimate of total Eu Gni. However, this has no effect on the overall Gni-based own resources. any increase (or decrease) in estimates of total Eu Gni will be offset by a decrease (or increase) in the uniform rate to be applied to Member states’ Gni to finance the budget.
34
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification… eurost At completed its verific Ation cycle 
lAte
68.  a t the end of January 2012, Eurostat completed its verification of G ni 
inventories. dG Budget notified the Eu-25 Member states of the setting 
of specific reservations on Gni data for the period 2002–1048 and lifted 
the outstanding general reservations on the same Member states for 
the period 2002–07.
69.  t he c ommission’s examination of Member states’ Gni inventories was 
carried out between the beginning of 2007 and the beginning of 2012. 
the c ourt considers this examination to have taken too long: 10 years 
elapsed between the year the verification was completed and the first 
reference year of the Gni data under review.
70.  t his time lapse was due to the commission’s comprehensive approach, 
requiring a significant workload for both Eurostat and the nsis. i t is also 
due to the fact that, even though not specifically required by the Gni regu-
lation, all information visit reports and assessment reports were adopted 
by the Gni c ommittee, which only met around three times per year.
excessive use of Gener Al reserv Ations
71.  i n order to be able to modify Gni data for own-resource purposes during 
this long verification process, the c ommission placed general reserva-
tions on Member states to cover Gni data for the years 2002–07.
72.  Excessive use was made of these reservations. this could lead to cir -
cumventing the principle that the process of providing and examining Gni data must be concluded within the 4-year time limit set in the own 
resources’ regulation. r eservations should only relate to specific points 
covering the valuation of discrete Gni components.
73.  i n July 2012, the internal audit department49 of dG Budget pointed out 
that placing general reservations for extended periods in order to be able to modify Gni  data for own-resource purposes and subsequently 
replacing them with specific reservations allowed Member states’ Gni  
data to be subject to corrections more than 10 years after the years 
concerned. this led to budgetary uncertainty in Member states.48 With the exception of 
the transversal reservation 
on financial intermediation services indirectly measured (fisiM) which only covers the year 2010, and the country reservations on Eu-10 Member states which only cover the period 2004–10.
49 the internal audit 
capability (iac ).
35
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationmA jor revisions not sufficiently ex Amined
74.  By the time that Eurostat had completed its verification, all 10 selected 
Member states had carried out a major revision50 of their national ac-
counts (see Table 2) leading to a new set of Gni data to be taken into 
account for own resource purposes.
tAble 2
mA jor revisions c Arried out by the 10 member st Ates between 2008  And 
2011  reviewed by the c ourt
GNI inventory examined by Eurostat 
in the context of the verification 
cycle under reviewMajor regular or benchmark 
revisions during the verification 
processNew/updated GNI 
Inventory provided
Selected  
Member StatesProvided in:Benchmark/  
reference year:Implemented in:Revised  
benchmark/  
reference year:Yes, when/No/  
Not Applicable (N/A)
Belgium May 2007 2003 2009 20062No
Germany December 2006 2000 2011 2008 No
Spain December 2007 2000 2011 2008 No
France July 2007 2000 2011 2005 No
Italy December 2007 2000 2011 2008 No
Netherlands December 2006 2001 N/A1N/A N/A
Austria January 2007 20022008 2004 Yes, February 2009
2011 2008 No
Poland December 2006 2002 N/A1N/A N/A
Sweden January 2008 2005 2010 2006 No
United Kingdom July 2007 2003 2008 2005 Yes, March 2011
1 Except the revisions derived from the implementation of nacE r ev. 2 in national accounts.
2 reference year where detailed data derived from annual accounts were available to be used in national accounts.
Source: Eca (based on the information in Eurostat’s control files).50 the major regular or 
benchmark revisions imply 
changes in sources and methods for the compilation of Gni, whereas the major occasional revisions derive from important methodological changes in concepts and definitions and/or in the classification used: e.g. the introduction of the new Eu statistical classification of economic activities (nacE r ev. 2) in 
national accounts in 2011 or the implementation of the forthcoming accounting framework (Esa2010). Major revisions require the retrospective calculation of Gni data of previous years.
36
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification75.  s even of the eight nsis which carried out major regular or benchmark 
revisions during the verification process did not prepare updated Gni  
inventories. therefore Eurostat had to carry out its analysis on the limited 
information included in the Gni quality reports.
76.  i n five51 of these Member states the scope of Eurostat’s work was re -
stricted. this was because of the lack of time between the implementa-
tion of the major revisions52 (september 2011) and the completion of the 
verification process (January 2012). a s a consequence, a comprehensive 
assessment of the new sources and methods was not made and direct 
verification was not based on the revised compilation process of the 
selected Gni components.
… eurost At’s verific Ations were not 
Adequ Ately reported
77.  clear and transparent reporting on the verification of Gni data is im-
portant. it enables the stakeholders to understand the c ommission’s 
assessment of Member states’ Gni and to take action where necessary. 
thus the c ourt examined Eurostat’s assessment reports on the Gni of the 
selected Member states (see paragraphs 79 to 82), the annual opinions 
of the Gni committee for years 2002–11 (see paragraphs 83 to 87) and 
the aars of Eurostat and dG Budget for years 2002–11 (see paragraphs 
88 to 92).
78.  t he c ommission has limited internal guidance on the reporting of its 
verification of Gni data and of its management of Gni-based own re -
sources. the quality of the c ommission’s reporting was therefore as-
sessed against standards of completeness, transparency and consistency defined by the c ourt.
eurost At’s Assessment reports on member st Ates’ Gni  were 
not Alw Ays complete, tr Ansp Arent And consistent
79.  Eurostat prepared the assessment reports on Member states’ Gni, includ-ing country-specific points for improvement with possible impact on Gni  
and transversal issues. the c ourt found that no criteria had been used 
by Eurostat to establish the country-specific points for improvement or 
the transversal issues
53.51 Germany, spain, f rance, 
italy and a ustria.
52 Excluding those which 
concern the implementation 
of nacE r ev. 2.
53 these points concern 
in particular estimates of entertainment, literary and artistic originals, insurance, software and consumption of fixed capital on roads, bridges, etc.
37
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification80.  t hese reports were presented to the Gni committee in July and october 
2011 as provisional ‘draft’ documents. this allowed some points to be ad-
dressed by nsis before the setting of reservations and/or some changes 
to be made by Eurostat to apply the principle of equal treatment. How-
ever, no final assessment reports on Member states’ Gni were prepared.
81.  i n december 2011, Eurostat issued a document54 including all action 
points which were deemed not important enough to be considered as 
country-specific points for improvement to be included in the assess-
ment reports. However this document included points that could have 
an impact on Gni and/or that are similar to specific reservations set by the c ommission in other Member states such as:
 ο the Br in Germany (see Table 1, point 2);
 ο the adjustment made for fraud to intermediate consumption (ic ) in the 
area of hotels and restaurants in the netherlands;
 ο the treatment of small tools in national accounts in the netherlands, s we-
den and the united Kingdom;
 ο the estimate of V at fraud without complicity in p oland.
82.  t he c ourt has the following general observations on the contents of Eu-
rostat’s assessment reports in respect of the 10 selected Member states:
 ο incomplete presentation of the objective(s) and the scope of the verifica-tion, as well as the work carried out by Eurostat;
 ο unclear information on the potential impact of country-specific points for improvement and/or transversal issues and on the possibility that the commission sets specific reservations on them
55;
 ο in the absence of any materiality criteria, it is unclear whether Eurostat’s 
own findings in the reports represent qualifications to the assessment56 
and whether Eurostat’s overall conclusion is to be considered positive or 
negative.54 Gni c ommittee document 
no 222 entitled ‘o ther 
issues (deriving mainly from 
action points B, c and d) for 25 Member states’ .
55 if not addressed before the 
end of 2011.
56 in Eurostat’s assessment 
reports, it is stated either that the compilation of Gni components ‘could’ or ‘may’ be improved, or that there are some areas for improvement. it is however unclear whether 
the lack of implementation of these points has an impact on the overall assessment.
38
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationAnnu Al opinions of the Gni  committee not in line with 
leGisl Ation And not informA tive
83.  t he Gni committee adopted ‘non-opinion’ statements relating to Greece 
for 200657 and to the Eu-10 Member states for the years 2006–1158 on 
whether Gni data provided by these Member states were appropriate 
for own resource purposes.
84.  i n the case of Greece, the c ommission complied with article 10(7) of the 
own resources’ regulation59. it used the Gni  data included in the previous 
(2005) Gni questionnaire for own resource purposes and no adjustments 
were made to balances in the budgetary year 2006.
85.  t his provision was however not complied with in the case of the Eu-10 
Member s tates. the c ommission calculated and made the corresponding 
adjustments to balances of Gni-based own resources in the budgetary years 2006–11, even though the Gni c ommittee did not issue an explicit 
opinion (see paragraph 16).
86.  c oncerning the contents of all the opinions issued by the Gni c ommittee 
in the period under review the c ourt found that:
 ο it is good practice to refer to the legal basis, but this is not done;
 ο the presentation of the objective(s) and the assessment basis60 is incom-
plete;
 ο it is unclear whether the (general) reservations referred to in the opinions 
on E u-15 Member s tates allow the overall conclusion drawn by the G ni 
committee to be considered positive or negative.
87.  t aking into account the weaknesses found in the c ommission’s verifica-
tion strategy/approach (see paragraphs 26 to 36) and in the verification process (see paragraphs 37 to 67), the work carried out by Eurostat is 
insufficient to fully support the opinion of the Gni c ommittee. a s the 
cost–benefit principle was not properly applied in Eurostat’s verification, 
a scope restriction should have been made in the opinions of the Gni  
committee.57 see paragraph 4.26 of the 
court’s annual r eport 2006.
58 Because the c ommission’s 
verification of Gni i nventories 
was not yet complete.
59 this provision states that 
any changes to the Gni 
of previous financial years pursuant to article 2(2) of the Gni regulation subject to article 5 shall give rise for each Member state concerned to an adjustment to its contribution to Gni-based own resources. article 5 of the Gni regulation includes the requirement for the Gni c ommittee to issue 
an annual opinion on the appropriateness of Member states’ Gni data for own resource purposes. 
60 the scope of the 
verification and the work carried out by Eurostat.
39
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationAnnu Al Activity reports of dG budGet only provided 
A p ArtiAl Assessment
88.  dG Budget provided little information on the management, risk and 
control environment relating to Gni-based own resources61, or on the 
reasoning used to draw the overall conclusion on the management and 
control systems62. despite improvements over recent years, the aars 
until 2011 of d G Budget provided only a partial assessment of the man -
agement of Gni-based own resources.
89.  until 2011 the declarations of assurance issued by dG Budget were not 
supported by sufficient evidence on either legality and regularity or sound financial management. they only related to the accuracy of the 
calculation of Gni-based own resources, and not to the quality of the underlying data.
90.  t aking into account the specific characteristics of the management 
of Gni-based own resources63, the basis of the assurance given by dG 
Budget should have been properly disclosed in its aars.
Annu Al Activity reports of eurost At only provided 
A p ArtiAl Assessment
91.  d espite improvements over recent years, the aars of Eurostat provided 
only a partial assessment of the verifications carried out on Gni data for own resource purposes. Limited information was disclosed by Eurostat 
on the objectives, scope and the results of its verifications on Gni.
92.  Eurostat’s declarations covering the principle of sound financial man-
agement were not supported by sufficient evidence on the effective use of resources involved in the verification of Gni data for own resource 
purposes.61 in particular, how the 
annual contributions and 
adjustments (to previous years’ balances) are calculated, how the responsibilities are shared between dG Budget and Eurostat, the role played by the Gni c ommittee, and 
the scope and objectives of the verification work carried out by dG Budget and Eurostat.
62 including key indicators 
on legality and regularity and sound financial management of verifications on Gni-based own resources.
63 the Eu rules for their 
calculation, the complexity of the national accounts’ compilation process and the sharing of responsibilities between two c ommission’s 
services (see paragraphs 2 to 11).
40
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationCoNCluSIoNS aNd rEC ommENdatIoNS
93.  t he c ourt concludes that the c ommission’s verification of Gni data was 
not sufficiently structured and focused. the conclusions and recommen -
dations below derive from the application by the c ourt of good practices 
of verification arrangements established for the purpose of its audit. 
these practices form a more structured and formalised approach, as well 
as providing for a better allocation of resources than the one currently 
used by Eurostat. a s the number of Gni components to be selected for 
in-depth verification may be tailored to the resources available, there need be no increase in Eurostat staff resources dedicated to the verifica-
tion of Gni data.
94.  t he c ourt found that the verification of Gni data used for own re -
sources for the years 2002–07 was completed late by the c ommission 
and the major revisions carried out by Member s tates between 2008 and 
2011 were not sufficiently examined by the c ommission. there was an 
excessive use of general reservations (see paragraphs 68 to 76).
95.  Eurostat did not plan and prioritise its verification work in an appropri-
ate way, as the risks relating to Member states’ compilation of national accounts were not appropriately assessed in the selection of areas to be 
verified (see paragraphs 24 to 36).
96.  Eurostat did not apply a consistent approach when carrying out its veri-
fications in Member states and did not carry out sufficient work at that level. the c ourt’s audit demonstrated that a more structured and better-
focused approach would improve the effectiveness of the commission’s 
verification (see paragraphs 37 to 67).
97.  Eurostat’s verifications have not been adequately reported (see para-graphs 77 to 92).
41
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
the verific Ation str AteGy/ Appro Ach
the Commission should carry out a structured and formalised analysis 
that takes into consideration costs and benefits allowing it to plan 
and prioritise its verification on specific areas or compilation (sub-) processes (see paragraph 33). Such an analysis should consider the risks relating to the m ember States’ compilation of their national accounts 
(see paragraph 32) and the relative size of the GNI components in the total economy.
this risk assessment should be based on all qualitative and quantitative 
information available in all departments of Eurostat and concentrate 
on the compilation procedures described in GNI inventories and recent GNI quality reports of m ember States (see Annex VII and Annex VIII ).recommend Ation 1  
undert Ake A structured And formAlised pl AnninG   
And prioritisA tion exercise
the Commission should shorten the duration of its verification cycle 
in order to limit the use of general reservations (see paragraphs 68 to 70, and 72).
Such reservations should be limited to exceptional cases where there 
are significant risks that the financial interests of the E u are not pro -
tected, for example when a m ember State carries out a major revi -
sion during the verification cycle or at irregular intervals (see para -
graphs 71 to 73).recommend Ation 2   
shorten dur Ation of the verific Ation cycle And limit  
use of Gener Al reserv Ations
Eurostat should report clearly and in a timely manner to the GNI Com -
mittee on cases where the cost–benefit principle is considered to apply 
(see paragraph 28).recommend Ation 3    
improve reportinG  to the Gni  committee
42
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationthe verific Ation process
the Commission’s verification process should involve a  structured and 
formalised qualitative risk assessment of the compilation procedures 
described in the GNI inventories and in-depth verification of material and risky GNI components. t he selection of GNI components for in-
depth verification should be made in accordance with the cost–benefit analysis described in Recommendation 1 . the scope and objectives of 
in-depth verification should be broader than those of direct verifica -
tion carried out by Eurostat in the recent verification cycle (see para -
graphs 22, second indent, and 33 to 36).recommend Ation 4    
Apply A more focused verific Ation
the Commission should pay particular attention in its verifications to 
the exhaustiveness of m ember States’ GNI and the use of comparable 
estimation procedures to cover the underground economy in national 
accounts (see paragraphs 60 and 61). Eurostat should check whether 
the Commission’s guidelines64 are followed by all m ember States, and 
take appropriate actions ensuring a comparable treatment of this issue 
between m ember States.recommend Ation 5    
pAy pArticul Ar Attention to the verific Ation  
of the exhA ustiveness of Gni
the Commission should document its work including a complete set of 
information relating to Eurostat’s verification carried out on the basis of desk checks and/or of visits in the NSIs (see paragraphs 39, 54 and 55).
Eurostat’s control files should allow management to clearly identify 
the results of the checks carried out on the selected GNI components, in compliance with the internal control standards (ICS).recommend Ation 6    
complete control files And document Ation64 see footnote 45.
43
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationIn order to set specific reservations, Eurostat should, where possible, 
assess the potential impact (for quantifiable observations) and/or the 
amount at risk (for non-quantifiable observations) of the action points, and set clear materiality criteria. t hese criteria should be qualitative 
or quantitative (see paragraphs 43 and 58). a s a general rule, reserva -
tions should be placed on specific GNI components relating to action points not addressed by the NSIs within the deadlines set and whose 
impact may be material.recommend Ation 7    
specific reserv Ations should only cover mA teriAl findinGs
Eurostat should improve coordination between its department in 
charge of the verification of GNI for own resource purposes and its other departments, in particular those dealing with national accounts 
(see paragraphs 49 to 53).
In the cases where possible actions undertaken by other Eurostat’s 
departments may have an impact on the compilation of G dp and/or 
GNI, the GNI Committee should be consulted and the final decision on these measures should be taken at an appropriate hierarchical level in Eurostat.recommend Ation 8   
improve coordinA tion between eurost At’s dep Artments
44
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationEurostat should improve its assessment reports to provide a complete, 
transparent and consistent evaluation of the m ember States’ GNI data 
(see paragraphs 79 to 82).
the annual opinions of the GNI Committee should include a clear as -
sessment on whether m ember States’ GNI data are appropriate (or not) 
for own resource purposes, their contents should comply with the re -
quirements of the GNI regulation and they should be used appropri -
ately in the budgetary procedure as provided for in the own resources’ 
regulation (see paragraphs 83 to 87).
the aar s of d G budget and Eurostat should provide a true and fair view 
of the verification of m ember States’ GNI data and of the management 
of GNI-based own resources (see paragraphs 88 to 92).the Commission should establish requirements for Eurostat to report 
regularly on the results of its verification of GNI data, allowing d G 
budget to draw the required assurance to be used in the context of 
its aar s.recommend Ation 9   
improve reportinG
98.  t he c ourt invites the c ommission to consider these recommendations 
in the context of the forthcoming revision of the Gni regulation.
this r eport was adopted by the c ourt of a uditors in Luxembourg at its 
meeting of 26 s eptember 2013.
 For the Court of Auditors
 Vítor Manuel da si LVa ca LdEira
 President
the reportinG
45
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationAnnex  i
Gni-b Ased  own  resources  for  the  yeArs  2002, 2007 And  2010  
by member  stAte 
Member StatesYear 2002 Year 2007 Year 2010
million euro  % million euro  % million euro  %
The 10 largest contributors selected in the context of this audit
Germany (DE) 10 504,5 22,86 % 14 653,8 19,83 % 18 703,8 20,54 %
France (FR) 7 684,7 16,72 % 11 215,7 15,17 % 14 762,0 16,21 %
United Kingdom (UK) 8 480,5 18,46 % 12 551,2 16,98 % 12 963,4 14,24 %
Italy (IT) 6 390,4 13,91 % 9 143,7 12,37 % 11 386,6 12,51 %
Spain (ES) 3 430,7 7, 47  % 6 073,4 8,22 % 7 611,3 8,36 %
The Netherlands (NL) 2 264,9 4,93 % 3 400,6 4,60 % 4 219,2 4,63 %
Belgium (BE) 1 335,7 2,91 % 1 985,8 2,69 % 2 662,4 2,92 %
Sweden (SE) 1 220,7 2,66 % 1 948,9 2,64 % 2 771,6 3,04 %
Poland (PL) 0,0 0,00 % 1 745,6 2,36 % 2 630,9 2,89 %
Austria (AT) 1 070,0 2,33 % 1 564,9 2,12 % 2 131,7 2,34 %
Total 42 382,1 92,25 % 64 283,6 86,98 % 79 842,9 87, 6 8  %
Other Member States
Denmark (DK) 893,1 1,94 % 1 393,5 1,89 % 1 705,7 1,87 %
Greece (EL) 704,8 1,53 % 1 946,6 2,63 % 1 616,9 1,78 %
Portugal (PT) 635,9 1,38 % 940,1 1,27 % 1 344,0 1,48 %
Finland (FI) 693,5 1,51 % 1 087,7 1,47 % 1 256,0 1,38 %
Czech Republic (CZ) 0,0 0,00 % 703,8 0,95 % 1 051,4 1,15 %
Ireland (IE) 537,5 1,17 % 972,2 1,32 % 950,1 1,04 %
Romania (RO) 0,0 0,00 % 681,7 0,92 % 859,6 0,95 %
Hungary (HU) 0,0 0,00 % 546,7 0,74 % 702,2 0,77 %
Slovakia (SK) 0,0 0,00 % 302,5 0,41 % 450,1 0,49 %
Slovenia (SI) 0,0 0,00 % 198,3 0,27 % 250,9 0,28 %
Bulgaria (BG) 0,0 0,00 % 163,0 0,22 % 247,2 0,27 %
Luxembourg (LU) 100,7 0,22 % 202,2 0,27 % 196,6 0,22 %
Lithuania (LT) 0,0 0,00 % 158,3 0,21 % 186,4 0,20 %
Latvia (LV) 0,0 0,00 % 118,0 0,16 % 133,9 0,15 %
Cyprus (CY) 0,0 0,00 % 88,2 0,12 % 124,3 0,14 %
Estonia (EE) 0,0 0,00 % 95,8 0,13 % 98,9 0,11 %
Malta (MT) 0,0 0,00 % 32,5 0,04 % 40,4 0,04 %
Total 3 565,5 7,75  % 9 631,1 13,02 % 11 214,6 12,32 %
Total GNI-based own 
resources (GNI OR)45  9 47, 6 100,00 % 73 914,7 100,00 % 91  057, 5 100,00 %
Total revenue  
(million euro)95 434,4 117 563,0 127 795,0
Total GNI OR/  
total revenue48,15 % 62,87 % 71,25 %
Source: Eca (based on the c ommission’s financial reports, chapters 14 ‘Gni ’ and 32 ‘Gni balances’ of the Eu budget). 
46
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationAnnex  ii
cAlcul Ation  of  Gni-b Ased  own  resources
cAlcul Ation of Gni-b Ased own resources finAncinG  the budGet
1. the calculation of G ni-based own resources is performed by the application of a uniform 
rate to Member s tates’ G ni. this is determined as a percentage of the sum of the forecast 
of annual G ni in such a manner that it fully covers that part of the budget not financed by 
tor , Vat-based own resources and other revenue1. thus the calculation of the overall G ni-
based own resources is influenced by these other sources of revenue.
2. Balances and adjustments to balances of G ni referring to year n are calculated respectively 
in year n + 1 by comparing forecast data with actual G ni data2, and in the following years 
(n + 2, n + 3, n + 4 ... etc.) using more up-to-date actual data as further described below.
3. the E u rules relating to the calculation of own resources allow for the possibility to modify 
Gni data for a given financial year until the 30 s eptember of the year n + 4 . this 4-year 
rule may be extended in cases where the c ommission and/or Member s tates consider that 
the quality of data should be improved in some points of the G ni compilation for a given 
financial year3. 
4. the c ommission’s reservation procedure is used to notify the Member s tates of these 
improvement points. a general reservation covers the compilation of all G ni components 
of a Member s tate, whereas a specific reservation covers the estimate of discrete G ni com -
ponents. When the c ommission lifts reservations, no more changes to the underlying data 
can be taken into account for the calculation of own resources. 
1 see a rticle 5 of the own resources’ regulation.
2 see a rticle 10(6) of the own resources’ regulation.
3 see a rticle 10(7) of the own resources’ regulation.
47
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationAnnex  ii
use of Gni  dAtA in the c Alcul Ation of other elements of own resources
5. Gni data play a key role in the wider system of own resources. t hey are also used to de -
termine the capped amount of V at bases (which should not exceed 50 % of G ni) for the 
calculation of V at-based own resources4, to redistribute among Member s tates the cost 
of the correction granted to the u nited Kingdom in respect of budgetary imbalances5 and 
the amount of the gross reduction granted to the n etherlands and s weden on their annual 
Gni contributions6 and to determine the maximum total annual amount of commitment 
and payment appropriations to be entered in the budget (ceilings)7.
Annu Al Gni  dAtA for the c Alcul Ation of own resources
6. annual G ni data8 are compiled by the nsi s in the Member s tates. t he nsi s must provide 
the commission (Eurostat), before 22 september of each year, with figures for G ni, Gdp 
and their components, covering the preceding year and any changes made to figures of 
previous years. t hese data are provided by Member s tates in the ‘G ni questionnaire’.
7. together with these data, the nsi s of Member s tates must also transmit a report showing 
how the aggregates were obtained, describing any significant changes in the procedures 
(‘methods’) and basic statistics (‘sources’) used and explaining any revisions made to earlier 
Gni estimates (‘quality report’)9.
4 see a rticle 2(1)(b) of the own resources’ decision.
5 the ‘uK correction’. s ee a rticle 5 of the own resources’ decision.
6 see a rticle 2(5) of the own resources’ decision.
7 see a rticle 3 of the own resources’ decision.
8  Gni data are drawn up on the basis of statistics and other estimates. t hese are different from forecast data which are used in the 
system of own resources in the context of the procedure for the approval of the annual budget.
9 see a rticle 2 of the G ni regulation.
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8. in order to make a more detailed description of how G ni data are compiled, the nsi s should 
provide Eurostat with an inventory of the procedures and basic statistics (‘G ni inventory’) 
used to make estimates of the different G ni components10.
9. according to the guidelines adopted by the G ni committee in July 2005, a fully updated G ni 
inventory should be prepared by Member s tates at the latest 1 year after the completion 
of any major revision11. if a Member state does not have a revision policy which includes 
major revisions, the G ni inventory should be updated at least every 5 years.
10.  i n July 2012, these guidelines were amended so as to require Member s tates to provide an 
updated G ni inventory only if requested by the G ni c ommittee when major revisions are 
carried out within the Eurostat verification cycle.
10 see a rticle 3 of the G ni regulation.
11  the major regular or benchmark revisions imply changes in sources and methods for the compilation of national accounts, whereas 
the major occasional revisions derive from important methodological changes in concepts and definitions and/or in the classification 
used. s ee also footnote 50 of the report and its Glossary .
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commission ’s verific Ation  of  member  stAtes ’ Gni  inventories
settinG  of Gener Al reserv Ations
1. as Gni data are open for own resource purposes for only 4 years and as Eurostat assessment 
of Member s tates’ G ni inventory can take longer than this period (as has happened, for 
example for G ni data of years 2002 onwards), the c ommission ( dG Budget) places general 
reservations covering the compilation of all G ni components of a Member s tate.
desk checks b Ased on the GiA q
2. Eurostat reviews the G ni inventories1 in order to ensure a ‘systematic, consistent and fair’ 
approach in the assessment of the quality of Member s tates’ G ni data. Eurostat’s work is 
documented using the G iaQ, which includes 265 detailed questions covering the compila -
tion of the entire national accounts.
informA tion visits2
3. taking into account its desk checks based on the G iaQ, Eurostat prepares questions to be 
clarified during an information visit to the nsi . the information visit aims in particular to 
collect the necessary information to determine any weaknesses in the statistical sources 
and methods used to calculate G ni and its components.
1 see footnote 11 of the report.
2  these are carried out by the c ommission. r epresentatives from other Member s tates may participate (see a rticle 6 of the G ni 
regulation).
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mission reports And A ction points
4. the information visit in a Member s tate gives rise to ‘action points’, which consist of is -
sues for which possible methodological changes are necessary and/or weaknesses in the 
 supervisory and control systems need to be addressed. t hese action points are broken 
down into the following five categories:
 ο Action Points ‘A’: possible improvement of methodology required;
 ο Action Points ‘B’: submission of new information that should be included in the Gni inventory;
 ο Action Points ‘C’: redrafting, clarifying or correcting already existing information in the Gni in-
ventory;
 ο Action Points ‘D’: submission of new information that does not necessarily have to be included in the Gni inventory;
 ο Action Points ‘E’: points to be implemented by Eurostat.
5. the mission reports (together with the timetable for the implementation of action points) 
should be agreed between Eurostat and the nsi s, and should be submitted to the G ni 
committee for discussion and adoption.
direct verific Ation
6. as a supplement to the review of G ni inventories based on the G iaQ, Eurostat has performed 
direct verification of G ni components since 2007 , as recommended by the c ourt3.
7. as set out in Eurostat’s guidelines, this approach mainly aims to follow the trail from the 
selected national accounts’ component back to the source data4.
3 see paragraph 4.30 (a) of the c ourt’s a nnual r eport 2005, a nnex 4.1 of a nnual r eport 2006 and paragraph 4.45 of a nnual r eport 2007.
4  the principal objectives of direct verification are to verify whether the description of sources and methods in the G ni inventory 
adequately reflects the compilation practice actually applied, and whether the basic data as shown in the sources have been 
processed appropriately into the national accounts’ figures provided by Member s tates for G ni-based own resources. By means of this 
approach, Eurostat does not make any estimation of G ni components.
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8. direct verification is generally carried out for one or two G ni components. Eurostat does 
not normally expect to be able to draw conclusions on all parts of the estimates included 
in the G ni inventory on the basis of this work.
loG-files And tr Acked upd Ates of the Gni  inventory
9. in order to monitor progress on action points and to document the verification process, 
Eurostat keeps a log-file showing all information relating to each action point and a con -
tinuously updated (non-public) version of the G ni inventory in tracked mode.
Assessment reports
10.  Eurostat drafts assessment reports on the quality of Member s tates’ G ni data relating to 
a certain number of years (e.g. the period 2002–10). t he assessment reports are used as a 
basis for the setting of specific reservations by the c ommission.
settinG  of specific reserv Ations And liftinG  of Gener Al reserv Ations
11.  f or any action points considered important by Eurostat for which full information has not 
been made available and/or the required improvements have not been made by nsi s, the 
commission sets specific reservations covering the estimate of discrete G ni components. 
this means that the verification is complete and any existing general reservations may be 
lifted.
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overview  of  the  court ’s Audit  Appro Ach And  methodoloGy
Did Eurostat appropriately plan 
and prioritise its veriﬁcation work?The audit examined whether the Commission’s veriﬁcation of GNI data used for own resources was well 
structured and focused. This was addressed by the following three questions:
- The control requirements set out in the main provisions of the GNI regulation
- The accounting rules set out in ESA95- The relevant principles on internal control (Committee of Sponsoring Organisations of the Treadway Commission  (COSO) framework)- The reporting requirements set out in the ﬁnancial regulation on the annual activity reports (AARs) 
 of the authorising oﬃcers by delegationDid Eurostat examine eﬀectively 
the quality of GNI data in respect 
of reliability comparability 
and exhaustiveness?Were Eurostat’s veriﬁcations 
adequately reported (in terms 
of completeness, transparency 
and consistency)?
Good practices 
of veriﬁcation 
arrangementsAudit 
objectives
Audit 
criteria
Evidence 
collection 
methodsTHE COURT’S CONTROL MODEL
Step 1
Veriﬁcation strategy/approach
Performance of a cost–beneﬁt analysis 
based on a risk assessment of the compilation of national accounts for a sample of 10 Member States with large contributions to GNI-based own resources (BE, DE, ES, FR, IT, NL, AT, PL, SE and UK).Step 2
Veriﬁcation process
Review of Eurostat’s control ﬁles for the sample (focusing on between 2 and 8 GNI components) of 10 Member States selected for step 1, and audit on-the-spot to carry out in-depth veriﬁcation in the NSIs of the compilation of between 3 and 4 GNI components in a sub-sample of 5 Member States (DE, ES, FR, IT and UK).
Work of other auditors (i.e. the internal audit departments (IACs) of DG Budget and Eurostat)
Step 3
Reporting
Examination of Eurostat’s assessment reports of GNI for the sample of 10 Member States selected for steps 1 and 2, of the annual opinions of the GNI Committee for years 2002 to 2011, and of the AARs of Eurostat and DG Budget for years 2002 to 2011.
Source: Eca.
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the  court ’s control  model
tow Ards An improved control fr Amework
1. the c ourt analysed the general architecture of the c ommission’s systems in order to estab -
lish good practices of verification arrangements to be used for the purpose of this audit.
2. these practices involve a more structured and formalised approach, as well as a better al -
location of resources. t hey envisage a different mix of control procedures compared to the 
commission’s framework: less intensity of qualitative examination of sources and methods 
described in the Member s tates’ G ni inventory and more testing of the compilation process 
through in-depth verification1 of material and risky components.
3. these verification arrangements, which are consolidated in this control model, are divided 
into the three key steps of Eurostat’s verification, as described below.
steP 1 — Ve RifiCation st Rate Gy/a PPR oaCh
4. the proposed strategy/approach is to plan and prioritise the verification of G ni components 
using a structured methodology implementing the cost–benefit principle (‘cost–benefit 
analysis’).
1 see footnote 16 of the report.
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5. the cost–benefit analysis should result from the application of the following tools and 
procedures:
(a) a detailed qualitative risk assessment of the compilation of G ni in Member s tates 
should be carried out. risk sources and factors are set out in Annex VI , and the assess -
ment takes into account the G dp compilation process according to the production 
approach. a desk review2 of the G ni inventory and the recent annual quality 
reports  of Member s tates represents the main information to be used to perform 
this detailed qualitative assessment of inherent risks. c ontrol risks3 are not taken into 
account because of the limited reliance on supervisory and control systems for the 
compilation of national accounts by the nsi s of Member s tates.
(b) a matrix4 should be prepared in order to present the compilation of G dp components 
(under the production approach) and of G dp/Gni transitional items based on the fol -
lowing two elements: the risk assessment score (associated to risk weightings)5 and 
the size of the components in the economy (percentage of G dp/Gni component over 
total G ni). Multiplying the risk weighting by the size of each component, a risk-size 
indicator is determined. for the purpose of this audit, the above-mentioned indicator 
is calculated for each nac E (rev. 1) activity and for transitional items. the cost–benefit 
analysis may also be applied to the expenditure and income approaches6.
(c) the benefits and costs in this analysis ( methodology ) should be established as follows: 
the ‘benefits’ are represented by the value of the risk-size indicator for the G dp/Gni 
components selected for in-depth verification, whereas the ‘costs’ are the opportunity-cost of the lack of in-depth verification of other G dp/Gni components. t his latter is 
measured by the sum of the values attributed to the risk-size indicators of the G dp/
Gni components not  verified.
2  if necessary an ‘information visit’ (in accordance with a rticle 6 of the G ni regulation) may be carried out to clarify the compilation 
process of national accounts.
3 including also the risks derived from the functioning of the statistical production systems (i.e. see source of risk d in Annex VI ).
4  the use of a similar risk matrix in planning G ni controls has also been proposed by Eurostat to address one of the recommendations 
made by its iac in the report on the G ni statistical process issued in a ugust 2011.
5  the c ourt’s auditors propose to use the following risk weightings: 100 for ‘very high’ risks, 75 for ‘high’ risks, 50 for ‘medium’ risks 
and 10 for ‘low’ risks.
6  this analysis should take into account the specific compilation procedures of the Member s tates.
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(d) in order to select the G dp/Gni components to be verified in depth, the c ourt proposes 
using a reference threshold as a general rule7 (materiality criteria ): the components 
with a risk-size indicator value above the reference threshold will be selected, whereas 
those with a value below the reference threshold will not  be selected. Exceptions to 
these quantitative criteria may be made in some justified cases in order to improve 
the effectiveness of the cost–benefit analysis.
(e) the number of G dP/G ni components  to be selected in each Member s tate depends 
on the staff resources available for verification.
ste P 2 — the V eRifiCation PR oCess
6. an in-depth verification of G dp/Gni components selected on the basis of the cost–benefit 
analysis (as described under step 1) should be carried out. t he scope and the objectives 
of in-depth verification should be broader than those of direct verification carried out 
by Eurostat. f urthermore, a risk-based approach  is applied in the context of in-depth 
verification as explained hereafter.
 ο scope: the coverage of the verification is the whole compilation process of selected Gdp/Gni 
components, including the examination of the quality of the basic data sources (primary data) 
even though belonging to nsi departments other than the one responsible for the national 
accounts or to other bodies providing statistical data.
 ο objectives: in addition to the objectives set out in Eurostat’s direct verification guidelines, in-
depth verification also includes the examination of the compliance of the selected Gdp/Gni  
components with Esa95.
 ο approach: starting from the reconstitution of the trail from aggregate to disaggregate level, 
the verification concentrates on the sub-components determined by those compilation sub-processes which are considered to represent a (very) high risk on the basis of risk assessment (see paragraph 5, point (a) of this annex).
7  for the purpose of this audit, the threshold used to select G ni components for in-depth verification was 5. a desk review of Eurostat’s 
control files was carried out using a selection threshold of 2 for Member s tates visited on-the-spot and 5 for the other selected 
Member s tates.
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7. in-depth verification of G dp/Gni components is carried out during ‘control visits’8 to nsi s. 
a detailed check-list should be drawn up for the verification in order to cover the risks of 
the compilation process of national accounts (see Annex VI ), and to ensure a consistent 
approach between Member states. t he findings should be agreed with the nsi s but there 
is no need for the G ni committee to approve the control visit reports9, as the overall evalu -
ation of G ni data for each Member s tate is included in the assessment report which should 
be examined by the G ni c ommittee (see step 3).
steP  3 — t he R ePoRtin G
8. reporting of the verification of G ni-based own resources should take place at three levels 
as described below.
Assessment reports
9. these reports should include an overall assessment on the reliability, comparability and 
exhaustiveness of Member s tates’ G ni data based on the application of the cost–benefit 
principle (see steps 1 and 2). t hese reports should describe at least the following:
(a) background information;
(b) objective(s) and scope of the verification (i.e. main documents on which the examina -
tion is based);
(c) work carried out;
(d) findings;
(e) conclusion (overall assessment);
(f) qualifications.
8 in accordance with a rticle 19 of the own resources’ regulation.
9  after taking into account of comments from the visited nsi s, these reports (when final) may be distributed to this c ommittee for 
information purposes.
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10.  a standard text should be drawn up for the reports’ conclusion. m ateriality criteria  
(i.e. a percentage of the value of the component examined and/or of G ni) should be set to 
make the distinction between significant and insignificant findings resulting from in-depth 
verification. i f the impact of all significant findings (i.e. qualifications) exceeds a defined 
reference threshold (e.g. 2 % of G ni), the overall assessment should be negative.
opinion of the Gni  committee 
11.  t his opinion should take account of the verification carried out by the c ommission in accord -
ance with its control framework, and Eurostat’s consistency checks on data and information 
provided by the Member s tates in their annual G ni questionnaires and quality reports.
12.  t he opinion of the G ni c ommittee should cover at least the following issues:
(a) background information and legal basis;
(b) objective(s) and scope of the verification (i.e. main documents on which the examina -
tion is based);
(c) work carried out;
(d) (general and specific) reservations and other significant findings;
(e) conclusion (opinion);
(f) qualifications.
13.  i t should be positive, negative or positive with qualification(s) . an opinion should be 
qualified where there are existing general reservations and/or (material) specific reserva -
tions, or where significant findings are revealed from the checks made by Eurostat on the 
Gni questionnaires and quality reports. i f the qualifications do not allow a positive opinion 
to be issued (see paragraph 10 of this annex), the underlying G ni data should only be con -
sidered for the calculation of G ni-based own resources where the c ommission duly justifies 
their use.
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14.  t he proposed standard text for this opinion is presented in Box 1 .
box 1 — proposed st And Ard text for the Annu Al Gni  committee opinion
taking into account the objectives and scope of the verification of Gni data (see .....) and based on the work 
carried out by Eurostat (see .....), the Gni c ommittee issues its opinion [in compliance with article 5(2)(b) 
of the Gni regulation] that the use of data included in the [YEar] Gni questionnaires and quality reports 
of Member states for own resources is appropriate/is not appropriate. [However, ... the following issues 
qualify the opinion ... e.g. (general and/or specific) reservations on Gni data have been set in accordance with article 10(7) of r egulation (Ec, Euratom) no 1150/2000 ...].
Annu Al Activity reports (AArs)
15.  Eurostat and d G Budget should both describe in their aar s (in p art 1 ‘ policy achievements’, 
part 2 ‘Management and internal control systems’ and/or p art 3 ‘Building blocks towards 
the declaration of assurance’10) the verification of G ni-based own resources11, providing 
relevant information on the use of resources in accordance with the principle of sound 
financial management.
16.  a s authorising officer by delegation for G ni-based own resources, d G Budget should also 
include appropriate evidence (e.g. indicators on legality and regularity) in order to support its own d eclaration  of assurance (i.e. p art 4 of the aar s) on the management of G ni-based 
own resources. 
10  these parts are defined by the c ommission’s internal guidelines on the preparation of the 2011 aar . similar sections have been set in 
the guidelines for the previous years.
11  in particular, the calculation of Member s tates’ contributions, the allocation of responsibilities within the c ommission (including the 
role of the G ni committee), the scope and objectives of the verification carried out by Eurostat and d G Budget, and the c ommission’s 
management of G ni reservations.
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17.  a s regards the quality of G ni data used to make the calculations of own resources, Eurostat 
should provide d G Budget with an annual overall assessment on G ni data to allow the lat -
ter to underpin its declaration. a lternatively, Eurostat could provide assurance in its aar s 
on the quality of G ni data to be used for own resources, and d G Budget could refer to this 
building block towards the declaration of assurance in its aar s.
18.  t he annual opinion of the G ni c ommittee may be used as a source of assurance, provided 
that its contents are clear and that the overall conclusion is unambiguous.
19.  t he scope of the declaration should be clarified in the d G Budget aar so as to present 
a true and fair view on both the legality and regularity of the underlying transactions and 
sound financial management for G ni-based own resources. t he proposed text for clarifying 
the scope of the declaration is set out in Box 2 .
box 2 — scope of the decl ArAtion on Gni-b Ased own resources
(a) the assurance is given on the calculation of Gni-based own resources of the current year which is 
made using forecast data (in accordance with article 5 of r egulation no 1150/2000) to be revised in 
the following years, and on the calculation of the balances12 and of adjustments13 to balances of Gni-
based own resources of previous years ( article 10(6) and article 10(7) of r egulation no 1150/2000);
(b) Member states’ Gni data of a given year can still be revised up to 4 years later. i n addition, the existence 
of general and specific reservations allows these data to be modified beyond this period;
(c) the assessment of the quality of Gni data is based on Eurostat’s verification, as described in p arts 1 
and 2 of the aar, and the basis of the assurance is described in p art 314;
(d) the Gni c ommittee issued its annual (positive, negative or positive with qualification(s)) opinion on 
the appropriateness of Gni data for own resource purposes on ..., taking into account the cost–benefit 
principle.
12  these are obtained in the year n + 1 by comparing the (provisional) actual G ni data of year n provided by Member s tates in the 
Gni questionnaires with the corresponding forecast G ni data used for the establishment of the budget of the same year. 
13  these are obtained in the years n + 2 onwards by comparing the improved (final) actual G ni data of year n with the 
corresponding actual G ni data for the same year provided by Member s tates in the G ni questionnaires for the previous years.
14 see paragraphs 15 to 18 of this annex.
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risk  Assessment  mA trix  used  by  the  court
sou RCes of R iskRisk fa CtoRs  
Per each G dP component (i.e. na Ce activities) and G dP/G ni 
transitional items)Risk assessment   
(low, medium, high, 
very high)
(A) Quality of statistical 
sources(A1) Inadequacy of the source for the measurement of activities and/or transactions in national accounts in terms of coverage of the universe, and completeness and detail of the variables available. Overall assessment for risk 
source A per each GDP/GNI 
component(A2) Unavailability of updated sources.
(A3) Lack of control and quality indicators accompanying the sources (e.g. service level agreements, quality reports, ad hoc surveys).
(B) Quality of statistical methods(B1) Methods applied to measure activities and/or transactions in national accounts do not comply with ESA95.
 Overall assessment for risk 
source B per each GDP/GNI 
component(B2) The methods recommended by the GNI Committee and/or by Eurostat for the valuation of specific issues are not fully applied.
(B3) Inappropriate use of ‘indirect’ methods.
(B4) Lack of specific methods to capture the non-observed economy for purposes of exhaustiveness.
(C) Determination of statistical estimates and recording in national accounts in compliance with ESA95(C1) The calculation of national accounts’ activities and/or transactions does not comply with ESA95.
 Overall assessment for risk 
source C per each GDP/GNI 
component(C2) Data validation and other (explicit cut-off, explicit exhaustiveness and balancing) adjustments are not made appropriately so as to obtain estimates complying with ESA95.
(C3) Variables of the statistical sources are not correctly classified for the measurement of ESA95 activities and/or transactions.
(C4) The allocation among institutional sectors and/or units of activities and/or transactions in national accounts does not comply with ESA95 (with a potential impact on GNI).
(D) Functioning of the statistical production systems (including organisational arrangements)(D1) Lack of adequate resources in the national accounts’ department(s) (e.g. staff number, and specific experience and knowledge of ESA95).
 Overall assessment for 
risk source D for the 
compilation of national 
accounts
1(D2) Lack of independence of staff/management in the national accounts’ department(s).
(D3) Weaknesses in the planning and in the allocation of tasks  
(e.g. production of data releases) within the NSI.
(D4) Lack of standardised information systems supporting the determination of estimates, and recording of activities and/or transactions in national accounts.
(D5) Inadequate coordination between:
— national accounts’ department(s) and other 
departments of the nsi in charge of thematic statistics used in national accounts; and
— national bodies (national central bank, nsi and 
ministries) when the responsibility for the  
compilation is shared.
1  in the context of the performance of the risk assessment for the compilation of national accounts in Member states, the risk source d was not taken 
into account as it refers to supervisory and control systems whose functioning was not the scope of this audit.
Source: Eca.
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use of the mA trix And procedure for risk Assessment
1. a qualitative risk assessment of the compilation procedures was carried out on the basis of 
the information available in Eurostat, in particular that described in the G ni inventory and 
recent G ni quality reports of Member s tates. 
2. in order to carry out this exercise, the risk factors described above have been in some cases 
broken down into more detailed sub-factors1. specific criteria were established for each risk 
factor and/or sub-factor in order to determine the cases where the associated risk should be assessed as Low (L), Medium (M), High (H) or Very High (VH).
3. for example, as regards the risk factor a 2 ‘unavailability of updated sources’, the risk as -
sessment is made as follows:
 ο Very h igh: when the source is not updated and refers to a very old reference year;
 ο high: when the reference year of the source does not correspond to the reference year of the 
final data under analysis and the update is not regular;
 ο medium: when the reference year of the source does not correspond to the reference year of 
the final data under analysis or the update is not regular;
 ο low : when the reference year of the source corresponds to the reference year of the final data 
under analysis and the update is regular.
4. in case of insufficient and/or no information available on the compilation of the G ni com -
ponent in any of the risk factors, the related risk assessment is considered to be High or Very High depending on the importance of the compilation issues not described in a complete 
and clear manner.
5. the use of this matrix allows the determination of a detailed assessment for each risk sub-
factor, factor and source of risk. a n overall risk assessment is made for each G ni component 
(i.e. G dp component or G dp/Gni transitional item) (see Annex VII ). this latter assessment 
represents the main input for the performance of the cost–benefit analysis (see Annex VIII ).
1  risk factor a 1 is divided into two sub-factors: (a) coverage of the universe and (b) completeness and detail of the variables available; 
risk factor c 1 is divided into two sub-factors: (a) estimates obtained through indirect methods and (b) conceptual adjustments;  
risk factor c 2 is divided into three sub-factors: (a) data validation and balancing adjustments, (b) explicit cut-off adjustments and 
(c) explicit exhaustiveness adjustments.
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the  court ’s risk  AssessmentNiace Rev. 1 
sectionsGNI componentsRisk assessment in the selected Member StatesBelgium
Germany
Spain
France
Italy
Netherlands
Austria
Poland
Sweden
United 
Kingdom
A Agriculture, hunting and forestry H H M H M M M H M H
B Fishing M H H H H H M H M VH
C Mining and quarrying L M M L M H H H M H
D Manufacturing H M M M H M H H H H
E Electricity, gas and water supply M M L L M M H M M L
F Construction H H M H H H H H H H
GWholesale and retail trade; repair of motor 
vehicles, motorcycles and personal and household goodsH H H M H H H H H H
H Hotels and restaurants H H H VH H H H H H H
I Transport, storage and communication H M M M M H H H H H
J Financial intermediation L L L L L M M H M H
K Real estate, renting and business activities H H H H H H H H H H
LPublic administration and defence;  compulsory social securityL M L M M M M H M M
M Education M H M H M H H H H H
N Health and social work H H VH H H H H VH M H
OOther community, social and personal service activitiesH VH H H H H H H H H
P Private households with employed persons VH M M M H M H H H H
Q Extra-territorial organisations and bodies N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Gross value added (GVA)
— Taxes on products M L L H M M M H M M
— Subsidies on products M H L M M M VH H H H
Gross domestic product (GDP)
Transitional itemsCoE received from RoW H H H H H M M H M H
CoE paid to RoW H M M H H M M H M H
PI received from RoW H H H H H H H H H H
PI paid to RoW M H M M H H H H H H
Taxes on production and imports paid to EU VH L L L L L L VH L M
Subsidies granted from EU VH H M VH VH H VH VH H H
Gross National income (GNI)
— FISIM1N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
 GNI for own resource purpose (OR)
Legend:  ‘L’ stands for ‘Low’ , ‘M’ stands for ‘Medium’ , ‘H’ stands for ‘High’ (yellow), ‘VH’ stands for ‘Very High’ (red), and ‘n/a ’ stands for ‘not applicable’ or ‘not a ssessed’ .
1  fisiM have only been included in the compilation of Gni to be used for own-resource purposes since the year 2010. a s this audit covers the c ommission’s 
verification of Gni data for the period 2002–07, the compilation of this component was not assessed.
Source: Eca (based on the examination of Member states’ Gni inventories).
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resul ts of the risk Assessment
1. this exercise allowed the G ni components whose compilation is subject to higher risk of 
non-compliance with E sa95 to be identified. a ll areas with an overall risk assessment of 
Low or Medium are not expected to be examined in depth, except in those limited cases 
where their relative size in the economy is very significant1.
2. the c ourt’s qualitative risk assessment results from the use of the matrix and related proce -
dure illustrated in Annex VI . for the five Member s tates visited on-the-spot, a short expla -
nation is given below on the reasoning used to assess the compilation of G ni components 
as Very High risk.
3. in the case of Germany, there is insufficient information on the completeness of the sources 
used to estimate a significant part of the gross value added (GV a) produced in nac E o 
(rev. 1) ‘ other community, social and personal service activities’. t he description of all 
adjustments made does not allow an assessment of the estimation process.
4. in the case of s pain, the quality of sources used to estimate a significant part of the GV a 
produced in nac E n ( rev. 1) ‘Health and social work’ is insufficient. f urthermore, key infor -
mation on the compilation process is not adequately disclosed (e.g. methods, adjustments and translation of the variables from the sources into E sa95 transactions).
5. in the case of f rance, the description of the estimation of nac E H ( rev. 1) ‘Hotels and res -
taurants’ does not include sufficient information on the exhaustiveness adjustments which 
are expected to be significant. n o details are disclosed on the subsidies granted by the E u.
6. in the case of i taly, no details are disclosed on the subsidies granted by the E u.
7. in the case of the u nited Kingdom, the information provided on the compilation of nac E 
B (rev. 1) ‘ fishing’ is not detailed, in particular as regards the adjustments made in national 
accounts and the translation of the variables from the sources into E sa95 transactions. 
However, this activity was not examined in the context of the audit because of its very limited size in the economy. 
1 E.g. at least 10 % of G ni for components assessed as medium risk.
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the  court ’s cost–benefit AnAlysis
GNI components  
(NACE rev. 1 section)Belgium Germany Spain France Italy Netherlands Austria Poland Sweden United Kingdom
SizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSIR(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M)
Agriculture (A)1,0 %
0,71,1 %
0,93,8 %
1,92,1 %
1,62,4 %
1,22,2 %
1,11,7 %
0,94,1 %
3,00,9 %
0,50,6 %
0,4
H(75) H(75) M(50) H(75) M(50) M(50) M(50) H(75) M(50) H(75)
Fishing (B)0,0 %
0,00,0 %
0,00,2 %
0,20,1 %
0,10,1 %
0,10,1 %
0,10,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,0
M(50) H(75) H(75) H(75) H(75) H(75) M(50) H(75) M(50) VH(100)
Mining (C)0,1 %
0,00,3 %
0,10,3 %
0,10,1 %
0,00,4 %
0,22,5 %
1,90,4 %
0,32,0 %)
1,50,4 %
0,22,2 %
1,6
L(10) M(50) M(50) L(10) M(50) H(75) H(75) H(75) M(50) H(75)
Manufacturing (D)15,4 %
11,620,9 %
10,417, 0 %
8,512,7 %
(i) 6,318,9 %
14,213,0 %
6,517,7 %
13,314,9 %
(i) 11,117, 3 %
13,011,8 %
8,9
H(75) M(50) M(50) M(50) H(75) M(50) H(75) H(75) H(75) H(75)
Electricity (E)2,1 %
1,11,7 %
0,81,8 %
0,21,5 %
0,21,8 %
0,91,2 %
0,62,3 %
1,73,4 %
1,72,6 %
1,31,3 %
0,1
M(50) M(50) L(10) L(10) M(50) M(50) H(75) M(50) M(50) L(10)
Construction (F)4,3 %
3,24,7 %
3,57, 6 %
3,84,8 %
3,64,5 %
3,45,0 %
3,86,6 %
(i) 5,05,7 %
4,34,0 %
3,05,6 %
4,2
H(75) H(75) M(50) H(75) H(75) H(75) H(75) H(75) H(75) H(75)
Wholesale and retail trade (G)11,4 %
8,510,1 %
7, 510,2 %
7,79,9 %
5,011,5 %
8,612,0 %
9,011,8 %
8,917,9 %
(i) 13,59,9 %
7, 410,4 %
7, 8
H(75) H(75) H(75) M(50) H(75) H(75) H(75) H(75) H(75) H(75)
Hotels and restaurants (H)1,5 %
1,11,5 %
1,17, 0 %
(i) 5,22,1 %
(i) 2,13,5 %
(i) 2,61,7 %
1,34,1 %
3,11,1 %
0,81,3 %
1,02,6 %
(i) 2,0
H(75) H(75) H(75) VH(100) H(75) H(75) H(75) H(75) H(75) H(75)
Transport (I)7, 2 %
5,45,0 %
(i) 2,56,7 %
(i) 3,35,7 %
(i) 2,96,6 %
3,36,3 %
4,76,5 %
4,96,7 %
(i) 5,06,0 %
4,56,5 %
(i) 4,8
H(75) M(50) M(50) M(50) M(50) H(75) H(75) H(75) H(75) H(75)
Financial intermediation (J)5,2 %
0,53,8 %
0,44,2 %
0,44,5 %
0,44,2 %
0,45,4 %
2,74,8 %
2,43,8 %
2,83,9 %
2,06,4 %
(i) 4,8
L(10) L(10) L(10) L(10) L(10) M(50) M(50) H(75) M(50) H(75)
Real estate, renting and business (K)19,5 %
(i) 14,621,2 %
15,913,6 %
10,223,6 %
17,718,1 %
13,518,8 %
14,116,4 %
12,312,8 %
9,618,0 %
13,520,8 %
15,6
H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75)
Public administration (L)6,6 %
0,75,8 %
(i) 2,95,7 %
0,66,9 %
(i) 3,45,3 %
(i) 2,76,2 %
3,15,4 %
2,75,8 %
4,45,1 %
2,64,8 %
(i) 2,4
L(10) M(50) L(10) M(50) M(50) M(50) M(50) H(75) M(50) M(50)
Education (M)5,9 %
3,04,1 %
3,14,5 %
(i) 2,25,1 %
3,84,4 %
(i) 2,23,9 %
2,94,9 %
3,64,3 %
3,25,1 %
3,95,2 %
3,9
M(50) H(75) M(50) H(75) M(50) H(75) H(75) H(75) H(75) H(75)
 Components selected by the Court for both in-depth verification and desk review in the five visited Member States
 Components selected by the Court for desk review in the five Member States which were not visited
 Components selected by the Court only for desk review in the five visited Member States
Legend:
 ο‘size’: relative size of the component as a share of Gni.
 ο‘r’: risk assessment (see Annex VII).
 ο‘M’: risk weighting.
 ο‘rsi’: risk-size indicator.
 ο‘L’ , ‘M’ , ‘H’ , ‘VH’ , ‘n/a ’ and ‘fisiM’: see Annex VII.
Source: Eca.
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationGNI components  
(NACE rev. 1 section)Belgium Germany Spain France Italy Netherlands Austria Poland Sweden United Kingdom
SizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSIR(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M)
Agriculture (A)1,0 %
0,71,1 %
0,93,8 %
1,92,1 %
1,62,4 %
1,22,2 %
1,11,7 %
0,94,1 %
3,00,9 %
0,50,6 %
0,4
H(75) H(75) M(50) H(75) M(50) M(50) M(50) H(75) M(50) H(75)
Fishing (B)0,0 %
0,00,0 %
0,00,2 %
0,20,1 %
0,10,1 %
0,10,1 %
0,10,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,0
M(50) H(75) H(75) H(75) H(75) H(75) M(50) H(75) M(50) VH(100)
Mining (C)0,1 %
0,00,3 %
0,10,3 %
0,10,1 %
0,00,4 %
0,22,5 %
1,90,4 %
0,32,0 %)
1,50,4 %
0,22,2 %
1,6
L(10) M(50) M(50) L(10) M(50) H(75) H(75) H(75) M(50) H(75)
Manufacturing (D)15,4 %
11,620,9 %
10,417, 0 %
8,512,7 %
(i) 6,318,9 %
14,213,0 %
6,517,7 %
13,314,9 %
(i) 11,117, 3 %
13,011,8 %
8,9
H(75) M(50) M(50) M(50) H(75) M(50) H(75) H(75) H(75) H(75)
Electricity (E)2,1 %
1,11,7 %
0,81,8 %
0,21,5 %
0,21,8 %
0,91,2 %
0,62,3 %
1,73,4 %
1,72,6 %
1,31,3 %
0,1
M(50) M(50) L(10) L(10) M(50) M(50) H(75) M(50) M(50) L(10)
Construction (F)4,3 %
3,24,7 %
3,57, 6 %
3,84,8 %
3,64,5 %
3,45,0 %
3,86,6 %
(i) 5,05,7 %
4,34,0 %
3,05,6 %
4,2
H(75) H(75) M(50) H(75) H(75) H(75) H(75) H(75) H(75) H(75)
Wholesale and retail trade (G)11,4 %
8,510,1 %
7, 510,2 %
7,79,9 %
5,011,5 %
8,612,0 %
9,011,8 %
8,917,9 %
(i) 13,59,9 %
7, 410,4 %
7, 8
H(75) H(75) H(75) M(50) H(75) H(75) H(75) H(75) H(75) H(75)
Hotels and restaurants (H)1,5 %
1,11,5 %
1,17, 0 %
(i) 5,22,1 %
(i) 2,13,5 %
(i) 2,61,7 %
1,34,1 %
3,11,1 %
0,81,3 %
1,02,6 %
(i) 2,0
H(75) H(75) H(75) VH(100) H(75) H(75) H(75) H(75) H(75) H(75)
Transport (I)7, 2 %
5,45,0 %
(i) 2,56,7 %
(i) 3,35,7 %
(i) 2,96,6 %
3,36,3 %
4,76,5 %
4,96,7 %
(i) 5,06,0 %
4,56,5 %
(i) 4,8
H(75) M(50) M(50) M(50) M(50) H(75) H(75) H(75) H(75) H(75)
Financial intermediation (J)5,2 %
0,53,8 %
0,44,2 %
0,44,5 %
0,44,2 %
0,45,4 %
2,74,8 %
2,43,8 %
2,83,9 %
2,06,4 %
(i) 4,8
L(10) L(10) L(10) L(10) L(10) M(50) M(50) H(75) M(50) H(75)
Real estate, renting and business (K)19,5 %
(i) 14,621,2 %
15,913,6 %
10,223,6 %
17,718,1 %
13,518,8 %
14,116,4 %
12,312,8 %
9,618,0 %
13,520,8 %
15,6
H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75)
Public administration (L)6,6 %
0,75,8 %
(i) 2,95,7 %
0,66,9 %
(i) 3,45,3 %
(i) 2,76,2 %
3,15,4 %
2,75,8 %
4,45,1 %
2,64,8 %
(i) 2,4
L(10) M(50) L(10) M(50) M(50) M(50) M(50) H(75) M(50) M(50)
Education (M)5,9 %
3,04,1 %
3,14,5 %
(i) 2,25,1 %
3,84,4 %
(i) 2,23,9 %
2,94,9 %
3,64,3 %
3,25,1 %
3,95,2 %
3,9
M(50) H(75) M(50) H(75) M(50) H(75) H(75) H(75) H(75) H(75)
 Components selected by the Court for both in-depth verification and desk review in the five visited Member States
 Components selected by the Court for desk review in the five Member States which were not visited
 Components selected by the Court only for desk review in the five visited Member States
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationGNI components  
(NACE rev. 1 section)Belgium Germany Spain France Italy Netherlands Austria Poland Sweden United Kingdom
SizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSIR(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M)
Health and social work (N)6,1 %
(i) 4,66,1 %
4,64,6 %
(i) 4,67, 3 %
5,54,8 %
3,66,7 %
5,05,3 %
4,03,8 %
(i) 3,810,1 %
5,06,4 %
4,8
H(75) H(75) VH(100) H(75) H(75) H(75) H(75) VH(100) M(50) H(75)
Other community, social activities (O)2,0 %
1,54,5 %
(i) 4,53,3 %
2,43,2 %
2,42,7 %
2,02,7 %
2,13,7 %
2,83,5 %
2,73,2 %
2,44,2 %
(i) 3,2
H(75) VH(100) H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75)
Private households with employed 
persons (P)0,3 %
0,30,3 %
0,20,9 %
0,50,5 %
0,20,8 %
0,60,4 %
0,20,0 %
0,00,5 %
0,40,0 %
0,0 0,4 %
0,3
VH(100) M(50) M(50) M(50) H(75) M(50) H(75) H(75) H(75) H(75)
Extra-territorial organisations (Q)0,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,0
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Gross value added (GVA)
Taxes on products11,3 %
(i) 5,710,6 %
1,110,8 %
1,111,2 %
8,411,9 %
(i) 6,012,0 %
(i) 6,012,2 %
(i) 6,112,0 %
(i) 9,013,2 %
(i) 6,611,4 %
(i) 5,7
M(50) L(10) L(10) H(75) M(50) M(50) M(50) H(75) M(50) M(50)
Subsidies on products0,9 %
0,50,5 %
0,41,2 %
0,11,2 %
0,61,2 %
0,60,9 %
0,42,2 %
(i) 2,20,2 %
0,10,5 %
0,30,4 %
0,3
M(50) H(75) L(10) M(50) M(50) M(50) VH (100) H(75) H(75) H(75)
Gross domestic product (GDP)
Transitional items1,4 %
(i) 3,5–1,0 %
(i) –0,2-0,9 %
(i) 0,40,6 %
(i) 1,9-0,8 %
(i) –0,10,8 %
(i) 1,0-0,8 %
(i) –0,3-0,4 %
–0,3-0,2 %
(i) 0,11,7 %
(i) 1,3
(ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii)
Gross National income (gni)
FISIM (Impact) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
GNI used for own resources purposes (OR)
 Components selected by the Court for both in-depth verification and desk review in the five visited Member States
 Components selected by the Court for desk review in the five Member States which were not visited
 Components selected by the Court only for desk review in the five visited Member StatesAnnex  viii
Legend:
 ο‘size’: relative size of the component as a share of Gni.
 ο‘r’: risk assessment (see Annex VII).
 ο‘M’: risk weighting.
 ο‘rsi’: risk-size indicator.
 ο‘L’ , ‘M’ , ‘H’ , ‘VH’ , ‘n/a ’ and ‘fisiM’: see Annex VII.
Source: Eca.
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationGNI components  
(NACE rev. 1 section)Belgium Germany Spain France Italy Netherlands Austria Poland Sweden United Kingdom
SizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSISizeRSIR(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M) R(M)
Health and social work (N)6,1 %
(i) 4,66,1 %
4,64,6 %
(i) 4,67, 3 %
5,54,8 %
3,66,7 %
5,05,3 %
4,03,8 %
(i) 3,810,1 %
5,06,4 %
4,8
H(75) H(75) VH(100) H(75) H(75) H(75) H(75) VH(100) M(50) H(75)
Other community, social activities (O)2,0 %
1,54,5 %
(i) 4,53,3 %
2,43,2 %
2,42,7 %
2,02,7 %
2,13,7 %
2,83,5 %
2,73,2 %
2,44,2 %
(i) 3,2
H(75) VH(100) H(75) H(75) H(75) H(75) H(75) H(75) H(75) H(75)
Private households with employed 
persons (P)0,3 %
0,30,3 %
0,20,9 %
0,50,5 %
0,20,8 %
0,60,4 %
0,20,0 %
0,00,5 %
0,40,0 %
0,0 0,4 %
0,3
VH(100) M(50) M(50) M(50) H(75) M(50) H(75) H(75) H(75) H(75)
Extra-territorial organisations (Q)0,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,00,0 %
0,0
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Gross value added (GVA)
Taxes on products11,3 %
(i) 5,710,6 %
1,110,8 %
1,111,2 %
8,411,9 %
(i) 6,012,0 %
(i) 6,012,2 %
(i) 6,112,0 %
(i) 9,013,2 %
(i) 6,611,4 %
(i) 5,7
M(50) L(10) L(10) H(75) M(50) M(50) M(50) H(75) M(50) M(50)
Subsidies on products0,9 %
0,50,5 %
0,41,2 %
0,11,2 %
0,61,2 %
0,60,9 %
0,42,2 %
(i) 2,20,2 %
0,10,5 %
0,30,4 %
0,3
M(50) H(75) L(10) M(50) M(50) M(50) VH (100) H(75) H(75) H(75)
Gross domestic product (GDP)
Transitional items1,4 %
(i) 3,5–1,0 %
(i) –0,2-0,9 %
(i) 0,40,6 %
(i) 1,9-0,8 %
(i) –0,10,8 %
(i) 1,0-0,8 %
(i) –0,3-0,4 %
–0,3-0,2 %
(i) 0,11,7 %
(i) 1,3
(ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii)
Gross National income (gni)
FISIM (Impact) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
GNI used for own resources purposes (OR)
 Components selected by the Court for both in-depth verification and desk review in the five visited Member States
 Components selected by the Court for desk review in the five Member States which were not visited
 Components selected by the Court only for desk review in the five visited Member States
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationAnnex  viii
Comments:
1. the risk-size indicator is obtained by multiplying the relative size of the component in G ni 
by the results of the risk assessment. f or the latter, the following risk weightings were used: 
100 for Very High risk, 75 for High risk, 50 for Medium risk and 10 for Low risk. s mall round -
ing differences may occur in the calculation of the rsi .
2. the general threshold used to select G ni components for in-depth verification in the five 
visited Member s tates is 5. f or the desk review of Eurostat’s control files, the general thresh -
old is 2 for the five visited Member states, and 5 for the other five selected Member states 
not visited.
3. Exceptions (i) are made in the following cases to improve the quality of the cost–benefit 
analysis.
 ο these components, even though eligible according to the threshold set, were not selected 
because: Eurostat carried out direct verification, they are covered by c ommission’s reservations, 
they have the lowest rsi  and/or none of their sub-processes were assessed by the c ourt as High 
or Very High risk.
 ο these components, even though not eligible according to the threshold set, were selected 
because: they were assessed by the c ourt as Very High risk (with a minimum rsi of 2 %) and/or 
they have the highest rsi.
4. transitional items are obtained as follows: compensation of employees and property income 
received from the rest of the world + compensation of employees and property income paid to the rest of the world – taxes on production and imports paid to E u + subsidies 
granted from E u. the value of rsi disclosed for ‘transitional items’ is obtained by the sum 
of the rsi of the underlying components. t he cost–benefit analysis was however carried 
out at individual level.
5. for details on the risk assessment (ii), see Annex VII .
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1. a risk-size indicator is determined for all G ni components in the 10 Member s tates under 
review by multiplying the relative size of the G ni component by the weighting obtained 
from the risk assessment (see Annex VII ). 
2. the resulting risk-size indicator prioritises the G ni components to be verified in each Mem -
ber s tate, and facilitates comparisons over time for each Member s tate and/or between 
Member s tates. t he total value of the risk-size indicator for a given Member s tate, calculated 
by the sum of the values of these indicators for all G ni components, may vary between 10 
and 100. 
3. Based on the general thresholds set, this analysis allowed the c ourt to select the G ni com -
ponents to be examined through in-depth verification and/or desk review in the Member 
states. s ome exceptions were made in order to improve the effectiveness of the cost–  
benefit analysis1.
4. for example, in the case of Belgium which was not visited on-the-spot, the c ourt selected 
for desk review the G ni components of nac E d ( rev. 1) ‘Manufacturing’, nac E (rev. 1) G 
‘Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and house -
hold goods’ and nac E i ( rev. 1) ‘ transport, storage and communication’ because the re -
spective risk-size indicator exceeded 5. 
5. the activity of nac E n ( rev. 1) ‘Health and social work’ was also selected in order to have 
a total of four G ni components because it had the highest risk-size indicator value (albeit 
below 5). t he activity of nac E K ( rev. 1) ‘ real estate, renting, and business activities’ was 
excluded because Eurostat carried out direct verification on this G ni component.
6. a similar procedure was applied in the other Member s tates, even those visited on-the-spot 
where in-depth verification and desk review of G ni components were carried out by the 
court. f or these five Member s tates, two different materiality thresholds were used for the 
selection (i.e. 5 for in-depth verification and 2 for desk review). 
1 see components highlighted by the note (i) in the table and related comments.Annex  viii
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country-specific reserv Ations  set  by  the  commission  on   
eu-25 member  stAtes
Member StatesNumber of  
reservationsSubject of country-specific reservations for the period 2002–10 ( EU-15 Member States) 
and for the period 2004–10 ( EU-10 Member States)
Belgium 3(1) Update of estimates of hidden economy in construction; 
(2) Update of coefficients of adjustments for exhaustiveness; 
(3) Foreign trade statistics.
Czech Republic 2(1) Dwelling services; 
(2) Tips.
Denmark 1 (1) Dwelling services.
Germany 2(1) Dwelling services; 
(2) Film, radio and TV originals.
Estonia 2(1) Consumption of fixed capital (CFC) for roads, bridges, etc; 
(2) Entertainment, literary and artistic originals.
Ireland 1 (1) Losses to be included in the mixed income.
Greece 8(1) Update of Structural Business Statistics (SBS) and employment data; 
(2) HBS (Household Budget Survey) data used in the expenditure approach to be reviewed; 
(3) Construction; 
(4) Value added (VA) on general government (GG); 
(5) Non-profit institutions serving households (NPISH); 
(6) Data on balance of payments (BoP) used for ships and maritime transport to be revised; 
(7) Dwelling services; 
(8) Further clarifications.
Spain 3(1) Small tools; 
(2) Compensation of employees; 
(3) Subsidies from EU.
France 2(1) Revised data on BoP; 
(2) Mutual funds.
Italy 3(1) Net operating surplus (NOS) for work in progress to be added; 
(2) Holding gains and losses to be excluded from changes in inventories; 
(3) Rents on land.
Cyprus 5(1) VAT fraud without complicity; 
(2) Own-account production of films, radio and TV originals; 
(3) Royalties to be used to value output of literary and artistic originals; 
(4) Own-account production of software; 
(5) Taxes and subsidies.
Latvia 10(1) Own-account output; 
(2) Transfer costs for existing dwellings; 
(3) CFC of GG and NPISH; 
(4) Classification of non-profit institutions (NPI); 
(5) Entertainment, literary and artistic originals; 
(6) Non-life insurance services; 
(7) Software; (8) Exhaustiveness; 
(9) Balancing procedure; 
(10)  Further clarifications.
Lithuania 2(1) Full integration of supply and use tables; 
(2) Entertainment, literary and artistic originals.
Luxembourg 2(1) Updating the adjustment on undeclared labour; 
(2) Own-account construction of dwellings.
Hungary 10(1) Coverage and valuation of own-account gross fixed capital formation (GFCF); 
(2) Estimates for originals; 
(3) Treatment of recyclable waste; 
(4) Revision of VA on insurance, pension funds and financial intermediation; 
(5) Holding gains and losses to be excluded from changes in inventories and trade margins; 
(6) VA of sole proprietors in the households (HH) sector; 
(7) Cross-validation within supply and use tables; 
(8) Exhaustiveness; 
(9) CFC for roads, bridges, etc; 
(10)  Further clarifications for a number of activities.
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Member StatesNumber of  
reservationsSubject of country-specific reservations for the period 2002–10 ( EU-15 Member States) 
and for the period 2004–10 ( EU-10 Member States)
Malta 8(1) Small tools; 
(2) Holding gains and losses to be excluded from changes in inventories; 
(3) Problems in the valuation of health services; 
(4) Own-account construction of dwellings; 
(5) Restaurants and bars; 
(6) Output and GFCF for film, radio and TV originals; 
(7) Insurance services; 
(8) Further clarifications on dwelling services.
Netherlands 4(1) Updating own-account construction; 
(2) Reclassification of Euro-vignette as services; 
(3) Updating foreign trade statistics; 
(4) Updating imports and exports of government services.
Austria 1 (1) Clarifications on own-account software.
Poland 11(1) Review of sources and methods used for the estimation of output; 
(2) Non-market producers' output; 
(3) Holding gains and losses to be excluded from changes in inventories; 
(4) Research and development; 
(5) Tips; 
(6) Imputed social contributions to be included in compensation of employees; 
(7) Taxes; 
(8) Exhaustiveness; 
(9) Treatment of withholding taxes in the cross-border interest and dividend flows; 
(10) Insurance; 
(11) Estimation of software (in particular the one for own-account).
Portugal 3(1) Measurement and valuation of output for own-final use; 
(2) Need to investigate whether time profiles of GFCF can be used in the perpetual inventory method 
(PIM) model for calculating CFC; (3) Employers' social contributions for civil service pension scheme.
Slovenia 3(1) Updating VA of agriculture; 
(2) Property Income (PI) of real estate; 
(3) CFC of GG and of dwellings activities.
Slovakia 2(1) Treatment of reinsurance commissions; 
(2) GFCF and CFC of GG.
Finland 1 (1) Updating renovations within the construction activity.
Sweden 4(1) Compensation of employees to/from the rest of the world (RoW); 
(2) Entertainment, literary and artistic originals; 
(3) Software; 
(4) Treatment of reinsurance commissions.
United Kingdom 10(1) Dwelling services; 
(2) NPISH; 
(3) Exhaustiveness; (4) Own-account construction; 
(5) Insurance; (6) Cinematographic film originals; 
(7) Own-account software; 
(8) CFC for roads, bridges, etc; 
(9) Need to investigate the impact of the use of list prices on the purchase of new cars; 
(10) GNI data need to be reconciled with the nationally published data.
Total number 103
Source: Eca (based on the c ommission’s notifications of reservations to Member states).
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CommISSIoN
exe CutiV e summa Ry
iV.
the c ommission has a well-established and multi-faceted 
verification system. i t emphasises quality, peer review and 
has sufficient flexibility to deal with exceptional circum-
stances. the c ommission will further develop its strategy 
for Gni verification to incorporate a more structured and 
formalised programme. this will include a risk analysis and 
take full account of cost-effectiveness. the c ommission 
notes the model used by the c ourt and will consider which 
elements could be beneficial to this process.
the c ommission considers that an evaluation of the staff 
resources needed is complex and has yet to be made.
V.
the c ommission agrees that general reservations should 
be used as infrequently as possible. Yet they are an essen-
tial part of protecting Eu  financial interests and thus can-
not be foregone completely.
the c ommission’s control system is also robust enough 
to accommodate major regular revisions, such as the 
incorpor  ation of changes in basic data sources or new esti -
mation methods.
Vi. (a) 
the c ommission considers that it has a well-established 
risk-based procedure for planning and prioritising its work 
which includes the prior agreement of plans by the Gni  
committee.
Vi. (b)
the c ommission applies the same verification methodol-
ogy in all Member states. a s agreed with the Gni c om-
mittee, direct verification is used as a supplement to the 
verification of each country’s Gni inventory based on the 
Gni i nventory a ssessment Questionnaire (Gia Q).
Vi. (c)
the verification results have been reported to the Gni  
committee which has considered this information suffi -
cient to issue its opinion of the data.
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification
Vii.
the c ommission has examined each case quoted in the 
report in detail and does not share the view of the c ourt 
concerning a number of the findings the c ourt presents.
Viii. (a)
the c ommission will further develop its strategy taking 
account of the findings of the audit, aiming at shorter 
verification cycles. the c ommission in the meantime 
has implemented a policy restricting the use of general 
reservations.
Viii. (b)
the c ommission is of the opinion that the approach it 
applied (desk checks of the G ni questionnaires and quality 
reports, the verification of Gni inventories using the Gia Q 
supplemented by a direct verification, with all steps sub -
ject to peer review) was appropriate for a final assessment 
of the Member states’ Gni for own resources. However, the 
commission will look into formalising explicitly the crit -
eria to be used for selecting the components to be verified 
by direct verification and making other improvements in 
documentation.
Viii. (c)
the c ommission’s reporting on Gni verifications was con-
tinuously improved over the past years. nevertheless, the 
commission takes note of the c ourt’s findings and agrees 
with the need to continue efforts to improve.
the c ommission has always considered reporting to be 
adequate and compliant with the Gni regulation and that 
the annual opinion of the Gni committee is sufficient. the 
court’s recommendation on the annual opinion will be put 
to the Gni c ommittee.
Elsewhere in this report the c ourt recognises the improve -
ments that have already been made while recommenda-
tions made during the audit were taken into account in the 
most recent annual activity report.
the c ommission considers that the opinions of the G ni 
committee have always been appropriately used for budg-
etary purposes.intR oduC tion
box — Gni reservations
General reservations can also be used if Member states do 
not comply with transmission deadlines.
obse RVations
28.
the c ommission considers that it had a well-established 
risk-based procedure for planning and prioritising its work. 
the Gni c ommittee agreed the plans for the last verifica-
tion cycle. the c ommission in accordance with the Gni  
regulation uses a mainly qualitative approach for (cost–
benefit) judgments on the potential size and significance 
of specific activities or transactions.
the c ommission uses the cost–benefit principle to deter -
mine whether an action point needs to be made into a reservation and reported on this to the Gni c ommittee 
as soon as the verification cycle (including Bulgaria and romania) was finished, presenting, in april 2013 a docu -
ment regarding follow-up on action points not leading to 
a reservation. this represents the main utilisation by the 
commission of the cost–benefit principle, i.e. helping to 
decide which open action points justified reservations and which points could be classified as other issues for 
follow-up.
29.
Work on the implementation of this recommenda-tion is still ongoing. the c ommission will also take into 
account the result of the c ourt’s audit. a conclusion on 
the approach will have to be ready before the start of the next verification cycle which will commence after 
september 2015.
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the c ommission considers that the approach it applies 
(desk checks of the Gni questionnaires and quality reports, 
the verification of Gni inventories using the Gia Q supple -
mented by a direct verification, with all steps subject to 
peer review) is appropriate for a final assessment of the 
Member states’ Gni for own resources.
34.
the c ommission’s control model requires a comprehensive 
qualitative analysis of the Gni inventories. direct verifica-tion is only understood by the c ommission and the Gni  
committee as a supplement to the verification of the 
countries’ Gni inventories based on the Gni i nventory 
assessment Questionnaire (Gia Q). the principal objectives 
of direct verification are to verify whether the descrip -
tion of sources and methods in the inventory adequately reflects the compilation practice actually applied and 
whether the basic data as shown in the sources have been 
transformed in an appropriate way into the na figures pro -
vided by the Member states for the Gni own resource. the 
comparability of methodology with other Member states is 
also taken into account.
direct verification is not an appropriate basis for drawing 
conclusions on all parts of the G ni estimates as described 
in the inventory.
35.
the c ommission’s verification system requires a compre -
hensive qualitative analysis of the Gni inventories (supple -
mented by direct verification). it does not focus merely on 
components covered by action points of type a or those for which direct verification was carried out. the c om-
mission is of the view that conclusions of this part of the 
court’s findings are based on an assumption that Eurostat 
concentrated its verification on the components covered by action points and those on which Eurostat carried out 
direct verification.36.
the c ommission is of the view that the conclusions of this 
part of the c ourt’s findings are based on an assumption 
that Eurostat concentrated its verification on the compo -
nents covered by action points and those on which Euro -
stat carried out direct verification.
38.
the c ommission is committed to the equal treatment of 
Member states. all Member states’ cases were individually 
assessed yet with full transparency towards the Gni c om-
mittee and a horizontal management overview.
39.
the c ommission recognises that the documentation of its 
verifications should be improved and is working to that 
end.
40.
as is documented in mission reports, the c ommission 
(Eurostat) selected the components/areas to be verified by 
direct verification using general criteria agreed by the Gni  
committee deliberately taking into account the particular -
ities of individual Member states.
the criteria agreed in the Gni c ommittee fully served their 
purpose and the c ommission feels that the direct verifica-
tion exercise allowed it to draw the conclusions expected 
from this supplementary tool. the direct verification did 
not, in general, identify a high risk of Member states incor -
rectly describing their calculation methods or having sig-
nificant compilation errors in their calculations.
41.
as agreed by the Gni c ommittee, and in accordance with 
the provisions of regulation (Ec, Euratom) no 1150/2000, 
the scope of direct verification started when the data 
arrived at the national accounts department. the super -
visory and control systems (scs ) are of an organisational 
nature. they give no specific indication of the reliability 
of the accounts, (which depends primarily on the statis-tical sources and methods used) although they may help 
mitigate the risk of errors. the commission will pursue 
its efforts to develop scs guidelines for the compilation of their national accounts by Member states, taking into 
account the observations made by the c ourt.
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Given the key importance of peer review for Gni-based or  
the commission maintains that the most appropriate legal 
basis for visits to Member states is the Gni regulation (i.e. 
information visits with the participation of other Member 
states), followed by scrutiny in the G ni c ommittee. f ur-
thermore, the expertise of those who compile the national 
accounts in Member states is invaluable to ensure compa-rability in other Member states.
43.
once the draft country assessment reports have been 
accepted by the Gni c ommittee it is for the c ommission, 
as stipulated in the own resource regulation, to set res-ervations without the approval of the country concerned or the Gni c ommittee. r eservations are set on the basis 
of a qualitative and quantitative assessment of each open 
point taking budgetary prudence into account. a s national 
accounts is a complex system of checks and balances, the 
effect of individual components cannot be isolated so it 
is generally not possible to quantify accurately the poten-
tial impact of the reservations. the c ommission is of the 
opinion that this approach is efficient in safeguarding the 
financial interests of the Eu . 
44.
Having examined the instances quoted in the report the 
commission is of the opinion that it followed a consistent 
approach in setting reservations.
45.
transversal reservations are used when an issue concern-
ing the calculation of Gni exists, the resolution of which requires a detailed comparative analysis of the solutions 
adopted by Member states and may require agreement 
in the Gni  committee on conceptual aspects. the results 
of this comparative analysis might identify the need for changes in the calculation of Gni in order to ensure that 
Gni-based own resources contributions are determined 
correctly.46.
transversal issues call for detailed comparative analysis 
of the solutions adopted by Member states. a t the end of 
2012, the declarations made by Member states had not yet 
been verified. f urther clarifications and discussions were 
needed in order to agree on an Esa95 compliant and com-
parable treatment. this process is now underway and the 
commission is lifting reservations where appropriate.
47.
the c ommission considers that the approach it applies 
(desk checks of the Gni questionnaires and quality reports, 
the verification of Gni inventories using the Gia Q supple -
mented by a direct verification, with all steps subject to 
peer review) is appropriate for a final assessment of the 
Member states’ Gni for own resources.
48.
the c ommission accepts that improvements to the docu-
mentation could be made. p lease see the comments in the 
reply to paragraph 39.
50.
Brs are covered by the Gia Q. Edp units in Eurostat are 
responsible for the market/non-market tests, the results of 
which are closely monitored for own resources purposes 
by the Gni verification team.
Eurostat divides areas of responsibility to avoid duplication 
of effort. d ocumenting all the frequent and multifarious 
interdepartmental consultations and discussions would be 
too resource-intensive.
51.
for Germany, the c ommission (Eurostat) identified the 
weaknesses, but noted that it was continuously improving 
and updating the Br and the cut-off adjustments. there -
fore, this issue was deemed not to merit a reservation.
the issue of a ustria’s classification of public hospitals was 
not quantified until after the verification cycle was closed 
in January 2012. Esa95 is ambiguous regarding the record-
ing of the significant cash flows disbursed by general gov-
ernment to public hospitals to cover their operating losses.
statistics a ustria applied E sa95 correctly for the years 
2002–07 and there was no verification error on the part of 
the c ommission.
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification52.
this issue was confirmed after the verification cycle was 
closed as statistics a ustria did not perform the 50 % test 
on public hospitals until May 2013. the result prompted 
the c ommission to take action to set a specific reservation 
on the issue.
53.
see c ommission reply to paragraph 51 above.
54.
the c ommission accepts that improvements to the docu-
mentation could be made. p lease see the comments in the 
reply to paragraph 39.
55.
the c ommission (Eurostat) will look into documentation 
when preparing the next verification cycle. the c ommis-
sion is committed to business continuity but the scope of 
this audit goes back over a decade and much very detailed, 
and in some cases outdated information, was requested. 
56.
the c ommission (Eurostat) applied the procedures pre -
sented to and agreed on by the Gni c ommittee. When pre -
paring the next verification cycle the c ommission will take 
stock of the lessons learned during this verification cycle.
56. f irst indent 
for reasons of cost-effectiveness, the focus of the c om-
mission’s verification model was the source actually used. 
neve rtheless, additional assessments were also made, 
in particular based on recommendations of the Gni  
committee. 
57.
the c ommission has examined each case quoted in the 
report in detail and does not share the view of the c ourt 
concerning a number of the findings the c ourt presents 
in table 1 (see detailed answers to paragraphs 59 to 63 
below). the c ommission does accept, inter alia, the record-
ing of the vehicle registration tax in f rance, understate -
ment of intermediate consumption for housing services in 
italy and the potential incorrect recording of Eu  grants in 
Member states.59. f irst indent
the c ommission (Eurostat) was aware of these adjust -
ments. their potential sizes were reviewed regularly and 
were not considered to cause a major concern regarding 
the comparability, reliability and exhaustiveness of German 
national accounts (see also the c ommission’s reply to para-
graph 51).
59. s econd indent
the issue of exhaustiveness has been a cornerstone of the 
work on Gni for more than two decades and has therefore 
been addressed on many occasions prior to the latest veri-
fication when it was again verified and it will continue to 
be a priority for future cycles. a t the conclusion of the pre -
vious verification cycle the calculation methods of the four 
Member states mentioned were considered acceptable.
59. t hird indent
Germany’s compliance with the recommendations of 
the Gnp c ommittee adopted by the Gni c ommittee 
(Gnic/004) including that on distribution (Gnpc/205) had 
been verified in the verification cycles prior to the latest 
round. any reservations relating to distribution or the cal-
culation of trade margins arising from these earlier verifi -
cation cycles were resolved before the most recent cycle.
59. f ourth indent
following an action point set by the c ommission (Euro -
stat), insEE reviewed the calculation of intermediate con-
sumption for housing services provided by households and 
augmented the ratio. the work done by insEE on inter -
mediate consumption for housing services provided by 
households was verified by the c ommission and accepted; 
hence this issue was not seen to merit a reservation for 
france.
the c ommission accepts the finding that there is an 
understatement of ic for housing services in i taly.
59. f ifth indent
the commission is of the view that up-to-date and appro -
priate data sources should be used by spain. the c om-
mission accepted the spanish calculations which at the 
time the inventory was compiled in d ecember 2007 were 
not deemed to be out of date. their potential sizes were 
not considered to cause a major concern regarding the 
compar ability, reliability and exhaustiveness of spanish 
national accounts.
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Reply of the  
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification59. sixth indent
the c ommission accepted the German, spanish and f rench 
calculations. their potential sizes and scope for error were 
not considered to cause a major concern regarding the 
respective comparability, reliability and exhaustiveness of 
German, spanish or f rench national accounts.
59. s eventh indent
as concerns transition from output at producer prices to 
basic prices, the c ommission investigated the issue dur -
ing the G ni information visits in 2008 and 2009. this is 
reflected in the replies to the Gia Q and the correspond-
ence with the ons. i n the light of the information obtained 
at that time, the c ommission considered that the proper 
transition to basic prices was ensured to an acceptable 
degree of quality. However, given the c ourt’s findings the 
commission will follow up this issue with the ons.
60.
the issue of exhaustiveness had been addressed in depth 
prior to the latest verification cycle, but was examined 
again. the German, spanish, f rench and i talian calculation 
methods were accepted.
61.
the c ommission will continue to strive to improve the 
quality of the estimates of the non-observed economy. 
62.
the c ommission is careful to treat all Member states 
equally, but equal treatment does not necessarily imply an 
examination of each reservation across all Member states.
such systematic cross-country checks may be desirable, 
but are not always practical, considering the existing coun-
try specificities making such comparison more difficult.63.
the commission is of the opinion that Eurostat has fol-
lowed a consistent approach with regard to setting res -
ervations vs other points for improvement for the points 
mentioned here. 
63. f irst indent
the situations in the two countries were different. the uK 
annual Business i nquiry specified a cut-off value in the 
guidance notes to respondents. the c ommission consid -
ered that this demonstrated an awareness of the require -
ments, and of the existence of measures within uK compi-
lation practice to minimise the potential impact on G dp. 
using the cost–benefit principle no reservation was set. 
However, as the details were not made available the action 
point became an ‘other point for improvement’; which is 
being followed up. Where no appropriate measures were applied, as in spain, the risk of a non-negligible impact 
on Gdp was perceived as higher and thus a reservation 
was set.
63. s econd indent
the situations were not fully comparable. the problems 
encountered in spain were wider-ranging than those in the 
other Member states mentioned. the c ommission agrees 
with the c ourt on the issue of suitable basic data neces-
sary for correct recording, but is aware that not all Member 
states accept that there is a legally binding requirement to 
do so. the c ommission intends to examine the issue in the 
next verification cycle.
63. t hird indent
a specific reservation was set on the rents of land for i taly 
since Esa95, paragraph 4.73, could not be applied, unlike 
in Germany and spain.
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Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification63. f ourth indent
for p oland, the reservation related to concerns for software 
for own-final use more broadly (i.e. both market and non-
market producers) than the case of no estimate for soft -
ware for own-final use of non-market producers in spain. 
own-account software being mainly produced by market 
producers, the impact of this deficiency on G ni in the case 
of spain is much smaller and the issue does not merit 
a reservation in the c ommission’s (Eurostat’s) view.
64.
as in previous verification cycles, reservations were set 
on the basis of a qualitative and quantitative assessment of each open point and taking budgetary prudence into account. once the draft country assessment reports have been accepted by the Gni c ommittee it is for the c om-
mission, as stipulated in the own resources’ regulation, to set reservations without the approval of the country con-
cerned or the Gni c ommittee. setting reservations requires 
an evaluation of all the nuances of the specific situation in 
a Member state at a particular time.
65.
please refer to the response to paragraph 57.
66.
for the reasons stated in the replies to paragraphs 59 to 63, 
the c ommission disagrees with the c ourt’s opinion. the 
commission has examined all the instances mentioned by 
the c ourt and has concluded that the only material finding 
relates to the understatement of intermediate consump -
tion for housing services in i taly.
66. f irst indent
the c ommission considers that the potential impact 
appears to be immaterial.
please refer to its replies to paragraphs 57 and 66.
67.
the c ommission notes that its own verification system, in 
the period under review, resulted in 103 specific reserva-
tions, six transversal reservations and many more action 
points. all of these are contributing to the improvements 
of the quality of Gni estimates and thus to a fair allocation of Gni resources.69.
the results of the verification work were presented to the 
Gni c ommittee in July and o ctober 2011. By early 2012, 
the c ommission had decided which reservations to place. 
in any event given the structure of the own resources sys-
tem it would have been 2006 before 2002 could possibly 
be considered finalised.
70.
the c ommission’s philosophy of ‘peer review’ requires full 
transparency before the Gni c ommittee, which, for reasons 
of resources, presently takes place twice per year.
the c ommission’s strategy has been formulated to provide 
assurance that Member states’ systems are able to provide 
accurate, comparable and exhaustive data and that any 
deficiencies identified are remedied while the Eu ’s finan-
cial interests are protected where those deficiencies may 
be significant. the assurance thus provided is not valuable 
only for the c ommission but for all the Member states.
72.
although from a legal perspective possible, the c ommis-
sion considers the frequent use of general reservations undesirable, yet they remain essential to ensure the Eu ’s 
financial interests are protected. the memorandum of 
understanding which governs the division of responsibili-
ties for the management of Gni or between dG Budget and Eurostat was expanded in april 2013, to ensure this 
point of view is clear.
73.
in april 2013, dG Budget and Eurostat signed an annex to 
their memorandum of understanding entitled ‘Good prac-
tices concerning Gni reservations’ , which will improve the 
situation.
75.
no control risks arose as the necessary checks were made 
on the annual quality reports. should any of these have proved insufficiently detailed then further clarifications 
were sought (and a country mission undertaken if needed): 
also an action point or a reservation would have been 
placed when necessary.
79
Reply of the  
CoMMISSIoN
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification76.
the new standard for the compilation of national accounts 
(Esa2010) was developed during the period covered 
by the audit. a s its implementation will require Member 
states to produce fully revised Gni inventories, the Gni  
committee decided that, for the revisions made in 2011 
and later, updates of the inventories could be held over 
until after the implementation of Esa 2010.
77.
the c ommission will review its communication pro -
cedures, taking the c ourt’s comments into account.
79.
the commission has provided details of its approach to 
country-specific points in reply to paragraph 43 and for 
transversal reservations in reply to paragraph 45.
80.
the c ommission considers the assessment reports final 
after they were presented to the Gni c ommittee, which 
took note and supported the approach adopted by Euro -
stat for the assessment.
81.
the general approach behind the selection of points for 
follow-up has been explained in reply to paragraph 43.
81. f irst indent
the c ommission has already detailed the response for not 
setting a reservation in reply to paragraph 51.
81. s econd indent
the c ommission (Eurostat) is following up this as another 
point for improvement. the issue was deemed not to merit 
a reservation.
81. t hird indent
the c ommission (Eurostat) is following up this as another 
point for improvement. the issue was deemed not to merit 
a reservation.
81. f ourth indent
the c ommission (Eurostat) is following up this as another 
point for improvement. the issue was deemed not to merit 
a reservation.82.
the c ommission will look into further improving the 
assessment reports.
83.
the opinions were not precisely the same. for Greece in 
2006 the Gni committee was unable to determine whether 
the data was appropriate for own resources purposes and 
agreed that the previous year’s data be used instead.
for the Eu-10, the Gni c ommittee issued a statement 
which, whilst not a formal opinion, raised no concern about the appropriateness of the data for own resources 
purposes.
85.
please refer to the responses to paragraph 83.
86.
the c ommission will review its communication proce -
dures, taking the c ourt’s comments into account.
the Gni c ommittee’s opinion has always been considered 
as adequate assurance and been equally accepted by tech-
nical experts on Gni and the users of the data. 
87.
Whilst the c ommission chairs the Gni c ommittee, it is 
composed of representatives of Member states. the Mem-
ber states have adopted the opinions of the committee by 
unanimity and have not questioned the work of the c om-
mission (Eurostat) as an appropriate basis for the opinions.
88.
suggestions for further improvements made by the c ourt 
during the audit were incorporated in the report for 2012 
and the practice of reporting similar activities spanning all 
own resources globally reconsidered. However, necessarily 
the focus remains on the activity actually undertaken by 
dG Budget.
Reply of the  
CoMMISSIoN80
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verification89.
as the c ourt records elsewhere in this report, the split of 
responsibilities between dG Budget and Eurostat is clearly 
laid out in a memorandum of understanding. d ata quality 
issues are primarily dealt with by the processes described 
exhaustively in this report within which Member states 
play a decisive role via the Gni c ommittee in evaluat -
ing the suitability of all the data submitted for Gni or in 
the light of Eurostat’s reports of its verification activities, 
within which the Member states also play a part.
90.
acting on recommendations from the c ourt dG Budget’s 
annual activity report for 2012 described the basis of dG 
Budget’s assurance.
91.
in the 2012 annual activity report Eurostat provided 
information on Gni-based own resources in p art 1 ‘p olicy 
achievements’ and p art 3.1.3 ‘f ollow-up of reservations’ .
in part 2 ‘Management and internal control systems’ Euro -
stat published information on the working arrangements 
with dG Budget and a table (and footnotes) with 18 legal-
ity and regulatory indicators.
ConClusions  and  ReCommandations
93.
the c ommission considers that an evaluation of the staff 
resources needed is complex and has yet to be made.
94.
please refer to c ommission’s replies to paragraphs 68 to 76.
95.
please refer to the replies in respect of paragraphs 26 to 36.
96.
please refer to the replies in respect of paragraphs 37 to 67.
97.
please refer to the replies in respect of paragraphs 77 to 92.Recommendation 1  
the c ommission will further develop its strategy for Gni  
verification to incorporate a structured and formalised programme. this will include a risk analysis and take full 
account of cost-effectiveness. the c ommission notes the 
model used by the c ourt and will consider which elements 
could be beneficial to this process.
Recommendation 2  
the verification cycle under review took longer than antic-
ipated because of the enlargement of the Eu . the c om-
mission agrees that the cycle could be shorter, but not at the expense of compromising the quality or increasing 
resources allocated to it.
the c ommission agrees with the objective of limiting the 
use of general reservations. a new annex to the memo -
randum of understanding between dG Budget and Euro -
stat, ‘Good practice covering Gni reservations’ was signed 
in a pril 2013; this will reduce significantly the number of 
general reservations.
Recommendation 3  
the c ommission has established reporting procedures 
but agrees that further improvements can be made. the 
commission uses the cost–benefit principle to determine 
whether an action point needs to be made into a reserva-
tion; this is reported to the Gni c ommittee.
Recommendation 4   
the c ommission considers that the qualitative assessments 
are of the utmost importance since the methodology used 
has to be reliable, comparable and exhaustive. this is the 
only way of establishing the risks involved in an objective 
manner. However, as the verification model develops, there 
will be more quantitative assessments, within the con-
straints of existing resources.
81
Reply of the  
CoMMISSIoN
Special r eport No 11/2013 – Getting the Gross National Income (GNI) data right: a more structured and better-focused approach would improve the effectiveness of the Commission’s verificationRecommendation 5  
the c ommission encourages Member states to strive 
continuously for improvement. Exhaustiveness has been 
a major consideration in the Gnp/Gni verification process 
since the early days and will always be so. the topic has 
been on the agenda of the Gni c ommittee on a number 
of occasions, most recently in october 2012, when the 
committee concluded: ‘i t was generally acknowledged 
that national accounts in the Ess have attained a very high 
level of exhaustiveness for the coverage of legal activities 
in the underground economy and of undeclared work.’
Recommendation 6  
the c ommission agrees with this recommendation. this 
aspect will be improved.
Recommendation 7
the c ommission agrees that it is desirable that reserva-
tions only cover material findings. However, reliable quan-
titative information is rarely available at the time a reserva-
tion is being set. the c ommission endorses the need for 
transparency in explaining the grounds for deciding to 
pursue items under reservation or to retain them as other 
points for improvement. this cannot restrict the c ommis-
sion’s prerogative to set reservations to protect the Eu ’s 
financial interests.
Recommendation 8  
interdepartmental contacts and meetings currently take 
place. However the c ommission will look for further 
improvements within the context of the current adminis-
trative structure.Recommendation 9  
the c ommission’s (Eurostat’s) reporting on G ni verifica-
tion has been continuously improved over the past years. 
nevertheless, the commission takes note of the court’s 
findings and agrees with the need to continue efforts to 
improve.
the c ommission has always considered reporting to be 
adequate and compliant with the Gni regulation and that 
the annual opinion of the Gni committee is sufficient. the 
court’s recommendation on the annual opinion will be put 
to the Gni c ommittee.
Elsewhere in this report the c ourt recognises the improve -
ments that have already been made while recommenda-
tions made during the audit were taken into account in the 
most recent annual activity report.
the c ommission considers that the opinions of the G ni 
committee have always been appropriately used for budg-
etary purposes.
98.
the c ommission has a well-established verification system, 
in which it cooperates with Member states in an environ-ment built on trust and emphasises quality. the c ourt’s 
recommendations will be considered in the course of the 
forthcoming revision of the Gni regulation and the future 
development of the system that will follow, within the con-
text of the c ommission’s resource constraints.

European Court of a uditors
special Report no 11/2013
Getting the gross national income (Gni) data right: a more structured and better-focused approach would improve the effectiveness of the 
Commission’s verification
luxembourg: p ublications o ffice of the European union
2013 — 81 pp. — 21 × 29.7 cmISbN 978-92-9241-405-4
doi:10.2865/36059

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QJ-ab-13-011-EN-C
EuropEaN  Court of audItorS
a SIGNIfIC aNt SharE  of thE  rEvENuE  IN thE  Eu budGE t IS  dErIvEd from owN  
rESourCES  CalCulatEd oN  thE  baSIS  of mEmbEr StatES ’  GroSS  NatIoNal 
INCom E (GNI). Eff ECtIvE vErIfICatIoN of GNI data IS  CruCIal to ENS urE 
that mEmbEr StatES ' rESpEC tIvE  CoNtrIbutIoNS  arE  CorrEC tlY aNd faIrl Y 
CalCulatEd. thE  Court’ S audIt EX amINEd thE  CommISSIoN ’S vErIfIC atIoN  
of thESE  data for thE  YEarS  2002 to 2007 whICh bEC amE  dEfINItIvE  IN 2012. 
EvEN  thouGh thIS  vErIfIC atIoN  ma Y wEll ImprovE  thE  QualIt Y of GNI 
data, thE  Court C oNCludEd that thIS  vErIfIC atIoN  waS  Not SuffICIENtl Y 
StruC turEd aNd foCuSEd to bE  full Y EffEC tIvE . 
thE  Court rEC ommENdS  that thE  CommISSIoN  foCuSES  oN  matErIal aNd 
rISk Y GNI C ompoNENt S, baSEd oN  a StruC turEd aNd formalISEd plaNNING  
aNd prIorItISatIoN  EXErCISE .