WRITTEN QUESTION E-2561/01

by Michiel van Hulten (PSE) to the Commission

(20 September 2001)

Subject: Problems detected in connection with implementation of the ESF during the periods 1994-1996 and 1996-1999

1. Could the Commission indicate the number of irregularities detected in connection with the use of ESF funds, together with the relevant amounts, for each Member State, in respect of the 1994-1996 programming period? Have steps been taken in each of these cases to recover the money? If not, why not?

2. With regard to the cases referred to under 1 above, has the Commission produced an extrapolation, on the basis of irregularities detected, for the whole of the programming period 1994-1996, or does it intend to do so? If so, how many cases are concerned, and in which Member States? What is the size, in each instance, of the sample on the basis of which an extrapolation has been made? What amounts have been sought to be recovered? Which Member States are concerned? Have the amounts sought to be recovered actually been paid back to the Commission?

3. With regard to the cases referred to under 1 above, has the Commission made proposals to the Member States in respect of an arrangement? If so, in which cases? And on the basis of what criteria?

4. Has the Commission detected irregularities which have not led to a claim for recovery in respect of the Member State concerned? If so, could the Commission indicate the cases concerned, for each Member State, and the amounts involved?

5. Does the Commission take the view that, with the exception of the cases where steps have been taken to recover funds, all ESF projects carried out during the period 1994-1996 were carried out to the letter of the rules in force?

6. Could the Commission also reply separately to the above questions in respect of the 1996-1999 programming period?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(6 November 2001)

1. Irregularities in the implementation of the European Social Fund (ESF), which co-financed many thousand of projects all over the Community to the tune of on average 7 000 million a year in the period 1994-1999, are found in all Member States.

Corrective actions are prepared in partnership with the Member States. When the Commission and the Member State in question are in agreement on the corrections to be made, the Member State integrates the necessary corrections into its annual declaration of expenditure. Consolidated data on such corrective actions by the Member States are not available. When the Commission and the Member State cannot reach an agreement on the necessary correction, the Commission launches a procedure for financial correction pursuant to Article 24 of Council Regulation (EEC) No 4253/88(1). The most recent report on financial corrections in the context of the application of Article 24 is transmitted direct to the Honourable Member and to the Secretariat general of the Parliament. In all cases where the recovery of ESF support was necessary, steps have been taken to do so.

Pursuant to Commission Regulation (EC) No 1681/94(2), the Member States have to report quarterly to the Commission any irregularities which have been the subject of initial administrative or judicial investigations, and the recovery of sums wrongly paid. Up until 31 December 2000, the Member States have communicated the following data with regard to ESF operations for the programming period 1994-1999:

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2. When the Commission considers that irregularities found in a sample of projects reflect a systemic weakness in management or control systems, this justifies a correction beyond the individual irregularities discovered. In six other ESF-related cases, extrapolation has been used to determine the amount of the correction (Member States concerned are Belgium, France, Ireland twice, the Netherlands with respect to 1997, Portugal). All these cases concern the programming period 1994-1999. In each of these cases, the necessary corrective actions have been or are being undertaken by the Member States involved. Consolidated data on such corrective actions by the Member States are not available.

3. The Commission has not made proposals to the Member States in respect of an arrangement. In all cases, corrective actions are taken to fully safeguard the financial interests of the Commission.

4. In the case that the Member State undertakes all necessary corrective actions and integrates them in their annual declaration of expenditure, the irregularities do not lead to a financial correction by the Commission in application of Article 24. In all other cases, the necessary steps are taken to recover the funds.

5. In the framework of the partnership, the Commission has, to a great extent, to rely on the management and control systems implemented by the Member States.

According to Article 23 of Regulation No (EEC) 4253/88, the Member States should take the necessary measures:

- to verify that operations have been properly carried out;

- to prevent and to take action against irregularities;

- to recover any amounts lost as a result of an irregularity or negligence.

The financial control throughout all Member States has been further strengthened by Commission Regulation (EC) No 2064/97(3). In accordance with Article 8 of this Regulation, all Member States will have to certify the validity, the legality and regularity of the operations underlying the final declaration of expenditure for the programming period 1994-1999.

Irregularities found after controls by the Commission lead to corrective actions by the Member State or to a financial correction by the Commission in application of Article 24 of Regulation (EEC) 4253/88.

Given the number of projects receiving ESF support throughout the Community and despite the controls carried out by the Member States and the Commission, the Commission is not in a position to give complete assurance that all ESF projects that were not subject to controls, comply fully with all the rules in force.

6. The aforementioned answers apply to the programming period 1994-1999.

(1) Council Regulation (EEC) No 4253/88 of 19 December 1988, laying down provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments OJ L 374, 31.12.1988.

(2) Commission Regulation (EC) No 1681/94 of 11 July 1994 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the structural policies and the organization of an information system in this field, OJ L 178, 12.7.1994.

(3) Commission Regulation (EC) No 2064/97 of 15 October 1997 establishing detailed arrangements for the implementation of Council Regulation (EEC) 4253/88 as regards the financial control by Member States of operations co-financed by the Structural Funds, OJ L 290, 23.10.1997.