WRITTEN QUESTION P-1728/02

by Carlos Carnero González (PSE) to the Commission

(10 June 2002)

Subject: Complaint submitted by the Socialist-Progressive Municipal Group of Madrid City Council to the European Commission regarding an infringement of Community law

On 31 May this year the city councillors Rafael Simancas Simancas and Isabel Villalonga Elviro submitted, on their own behalf and on behalf of the Socialist-Progressive Municipal Group of Madrid City Council, a complaint to the Commission alleging failure to comply with Community law on the part of the Directorate-General for the Promotion of the Social Economy and the European Social Fund, the Sub-Directorate-General of the European Social Fund Administration Unit (UAFSE) and implicating the Ministry of Labour and Social Affairs too. The reasons for the complaint are that on 28 March 2001 the auditing team from the UAFSE started checking the P.O. 940314 ES3 managed by the Madrid Institute for Employment

and Business Training (IMEFE). The checks led to the drawing up of two reports, one concerning the procedures carried out using own resources which was published in 17 December last and the other regarding technical assistance contracts, which has not yet been published.

The UAFSE auditing team issued both audit reports. From the first provisional report notified to the IMEFE on 20 December 2001, concerning the internal courses run by the IMEFE, it emerges that because of irregularities discovered, the IMEFE will have to pay 5 800 000 back to the ESF. The second report on the external courses contracted out to outside firms by the IMEFE under the heading of technical assistance was not notified as it should have been in order to comply with the compulsory counterclaim procedure, as a result of a decision adopted by the Director-General for Promotion of the Social Economy and the ESF on which the UAFSE depends requesting that Madrid City Council carry out an additional audit. This meant that the contents of the second report were unknown and the relevant period allowed for counterclaims could not be initiated. Furthermore, the decision to request an audit from the City Council itself, which is an interested party, could mean that the second report drawn up by the UAFSE auditing team about the IMEFE would not be delivered, which would constitute an infringement of the relevant Community law.

What view does the Commission take of the complaint submitted by the Socialist-Progressive Municipal Group of Madrid City Council? If it considers the allegations made in the complaint to be true, what may the implications be for the application of Community law?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(29 July 2002)

In the light of information revealed by the Spanish press at the start of 2001 the European Anti-Fraud Office (OLAF) launched a coordination investigation concerning suspected irregularities in the management by the IMEFE of actions cofinanced by the European Social Fund.

Since then, in order to ensure that the case is followed up appropriately, there have been regular contacts with the national authorities. As part of these contacts, the national authorities supplied OLAF with the audit report produced by the Intervención General de la Administración del Estado (IGAE) as well as that produced by the UAFSE on own resources. The Commission is awaiting the audit report produced by the UAFSE regarding the technical assistance contracts.

On Friday June 2002, OLAF received a complaint lodged by the Socialist Group of Madrid City Council concerning failure by the Spanish Ministry of Labour (UAFSE) to observe Community law concerning the management of structural funds by the IMEFE.

The investigation is still in progress, and the elements mentioned above form part of this investigation.