WRITTEN QUESTION E-2282/01

by Patricia McKenna (Verts/ALE) to the Commission

(31 July 2001)

Subject: European Commission funding in Paraguay

What is the overall amount of money the European Commission has awarded to Paraguay in the past five years and the amount of money awarded to the NGO AMAR (Assistance to Minors and Adolescents in situation of high risk) in the same period?

Could the Commission clarify what is the legal status of AMAR and its precise role in Paraguay, as it appears to act as a subcontractor and/or an intermediate body between NGOs and the EU?

We are aware from good sources that there have been complaints about the way EU funds are being spent by AMAR. Could the Commission state whether regular audits of AMAR have been carried out and whether any irregularities have been unveiled?

Could the Commission outline what measures it proposes to take, or has taken, to remedy these irregularities?

Answer given by Mr Patten on behalf of the Commission

(15 October 2001)

Community co-operation with Paraguay is carried out within a Framework Cooperation Agreement signed between the Commission and the Government of Paraguay in 1991. In the context of this agreement, which sets out the thematic areas for co-operation, the Community has committed 90,3 million so far.

One of the priority thematic areas of co-operation is social development. Within this sector, the Community is presently co-financing, along the Government of Paraguay, the Project PRY/B7-0310/96/007 Assistance to Minors and Adolescents in situation of high risk, also known as AMAR. The Commission's contribution to this project is 10,030,000 for a period of five years.

AMAR is not an non governmental organisation (NGO) but a project managed under the rules for Community's external aid. Its legal status is guaranteed under the project's Financing Agreement, which was signed between the Commission and the Government of Paraguay in 1997.

The Commission's external aid management system is designed to ensure effective management of projects and to contribute to sustainable development of beneficiary countries.

The general procedures that apply to Community financial projects in South America consist of the following elements:

- The priority areas for co-operation and the project ideas are determined jointly by the Commission and the recipient country.

- On the basis of the above, the Commission sets up an identification mission with the task of formulating the project proposal.

- The project proposal and later the Financing Proposal, are approved by the Commission, the Member States and the recipient country. The Financing Proposal is the basis for the Financing Agreement, which is signed by the Commission and the Government and constitutes the legal framework of each project.

- The Commission then carries out a tender to contract Technical Assistance for each project. The Technical Assistance generally comprises a European Co-Director and a Project Administrator, as well as the experts that may be required by each specific project.

- For its part the Government of the partner country designates a National Co-Director. The European and the National Co-Directors head the Project Management Unit, which is responsible for day-to-day project management.

- Among the main responsibilities of the Project Management Unit are the preparation of work plans and technical and financial reports, as well as carrying out project monitoring, and annual financial audits. The Commission transfers funds to the project only upon compliance with the above-mentioned procedures.

In this context, AMAR's Project Management Unit began its operations in early 1999, and has carried out two annual audits for the fiscal periods of 1999 and 2000. Both audits have concluded that the project expenditures are eligible and have been made in accordance with the project's Financing Agreement. No irregularities were detected.