WRITTEN QUESTION E-1360/01

by Bartho Pronk (PPE-DE) to the Commission

(7 May 2001)

Subject: European Social Fund (ESF) subsidies during the programming period 1994-1999

On 29 March 2001, the Interim report on research into subsidies from the European Social Fund for the programming period 1994-1999, also known as the Koning report, was published in the Netherlands. The study was commissioned by Mr Vermeend, Minister for Social Affairs and Employment. The Minister submitted the report to the Second Chamber in early April 2001.

1. Has the European Commission noted that report?

2. Does it feel that that report has any implications for both the implementation of the agreements relating to the new period and approval in respect of the previous period?

The Netherlands Government intends to entrust the management of ESF funds in future to an agency.

3. The Minister for Social Affairs and Employment has stated that the European Commission has approved its plan. Is that really true?

I asked for information about the ESF Implementation Unit in the Employment Service in a previous Written Question (E-0129/00(1) dated 27 January 2000).

4. Has the European Commission changed its views in the light of the Koning report? In its answer to my Written Question referred to above, the European Commission said that it was the responsibility of the Commission to check that the ESF programme had been implemented in a transparent, efficient and correct manner, in accordance with the Regulation currently in force.

5. Does the European Commission feel that it has adequately discharged its responsibility?

In its answer to my Written Question referred to above, it also said that it would negotiate with the Netherlands Government with a view to making sure that the implementation chapters of the Single Programming Document (SPD) provided a sufficient guarantee for that to be the case.

6. Have the negotiations with the Netherlands Government now been completed?

If so, can the European Commission indicate the outcome of those negotiations?

In the conclusion to Section 5.6 of the Koning report, reference is made to balancing the books, whereby a positive ESF liquidity balance is used to offset a negative Employment Service organisation liquidity balance.

7. To what extent does the European Commission deem it possible for the books to be balanced in the manner referred to above?

8. Does it intend to prohibit this in the forthcoming programming period?

If so, how will it do so?

(1) OJ C 303 E, 24.10.2000, p. 145.

Answer given by Mrs Diamantopoulou on behalf of the Commission

(27 June 2001)

1. The Commission has studied the Koning interim report very carefully. It confirms, in general, the findings of the Commission's own investigations.

2. The Koning report deals exclusively with the previous 1994-1999 programming period and does not contain any recommendations for the ongoing 2000-2006 period. For this period, the Structural Fund regulations have, in any case, changed substantially, in particular to ensure more rigorous financial management. However, although it considers that the consequences of the Koning report must be borne in mind in the first place in the Netherlands, the Commission regards the Koning report as a very useful additional source of information for the future management of the Structural Fund.

3. and 4. The Dutch government is responsible for the choice of the implementation structure of the European Social Fund (ESF) programmes. Its decision to create an agency to implement the programme has, in fact, been welcomed by the Commission. The Commission has not changed its views in the light of the Koning report. The Commission also welcomes the decision of the Dutch government to place the agency under the direct responsibility of the Minister of Social Affairs and Employment.

5. The Dutch Objective 3 Single Programming Document, which the Commission approved in August 2000, contains a detailed description of the elaborate control structure the Dutch authorities have promised to put in place. The Government's decision to turn the ESF implementation unit into a government agency provides for additional guarantees against irregularities. But of course both the Commission and the Dutch authorities know that the proof of the pudding is in the eating. Under the current programming period, interim-payments by the Commission to the Dutch Government can only be made on the basis of certified invoices for realised projects. The Commission will carefully check the integrity of these certificates, and thus ensure that projects are implemented in a transparent, effective and correct way in line with the valid regulation.

6. In December 2000, the Commission and the Dutch authorities created a Joint Working Group which meets on a regular basis. So far it has not been possible to come to final conclusions because many of the final control results are still pending. But the Commission is satisfied with the way the co-operation with the Dutch authorities is taking place.

7. The netting problem referred to in chapter 5.6 of the Koning interim report was caused by the fact that the Arbeidsvoorziening (labour supply) did not keep its ESF subsidies in a separate bank account. The Commission insists that future arrangements will be such that transparency is ensured, which was not the case with the former approach.

8. By the end of 1998 this practice of netting through one single account had already been abolished by the Arbeidsvoorziening itself. As far as the Commission is aware, the Dutch authorities have no plans to reintroduce netting of ESF monies with national funds.