European Parliament resolution on Court of Auditors Special Reports Nos 6/1999, 7/1999, 3/2000 and 7/2000 on budgetary implementation of the Structural Funds, together with the Commission's replies (C5-0240/2000, C5-0241/2000, C5-0242/2000, C5-0243/2000 — 2000/2129(COS))
Date: 2001-01-16
Institutions: Committee on Budgetary Control, European Parliament
Subjects: EU aid, EU control, European Regional Development Fund, Northern Ireland, Structural Funds, economic development, financial aid, industrial development, peaceful co-existence, principle of additionality

18.9.2001

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Official Journal of the European Communities

C 262/65

10. Court of Auditors’ Special Report: Structural Funds (budgetary implementa-

Tuesday 16 January 2001

tion)

A5-0359/2000

European Parliament resolution on Court of Auditors Special Reports Nos 6/1999, 7/1999, 3/2000
and 7/2000 on budgetary implementation of the Structural Funds, together with the Commission’s
replies (C5-0240/2000, C5-0241/2000, C5-0242/2000, C5-0243/2000 . 2000/2129(COS))

The European Parliament,

(cid:1) having regard to Special Reports Nos 6/1999, 7/1999, 3/2000 and 7/2000 (C5-0240/2000) (1),

C5-0241/2000 (2), C5-0242/2000 (3), C5-0243/2000) (4),

(cid:1) having regard to the Council Regulations of 21 June 1999 on the Structural Funds (5),

(cid:1) having regard to Article 248(4), second subparagraph, of the EC Treaty,

(cid:1) having regard to Rule 47(1) of its Rules of Procedure,

(cid:1) having regard to its resolution of 12 April 2000 on the additionality principle in Structural Fund

appropriations (6),

(cid:1) having regard to the proposal for a Council Regulation on Community financial contributions to the
International Fund for Ireland (COM(1999) 549 (cid:1) C5-0285/1999 (cid:1) 1999/0221(CNS)), which was
approved by the European Parliament on 17 December 1999 (7),

(cid:1) having regard to the report of the Committee on Budgetary Control and the opinion of the Committee

on Regional Policy, Transport and Tourism (A5-0359/2000),

A. whereas it is largely the Member States which are responsible for the utilisation of the Community

structural funds,

Special Report No 6/1999

Points out that the additionality principle means that European funds are intended not to finance, but

1.
to cofinance, operations, and must not take the place of public expenditure by national authorities;

Emphasises that, together with partnership, concentration and programming, additionality is one of
2.
the basic principles underpinning the operation of the Structural Funds, and enables those funds to have a
genuine impact in eligible regions;

Notes the remarks made by the Court (cid:1) the validity of which is acknowledged by the Commission (cid:1)

3.
about the difficulties involved in verifying this principle, owing mainly to methodological problems;

4. Welcomes the fact that the new Structural Fund rules (cid:1) with particular reference to Article 11 of
Regulation (EC) No 1260/1999, covering the verification of additionality (cid:1) should simplify matters;

Considers nonetheless that a major effort should be made by the Commission and national and

5.
regional authorities to improve national and regional statistics;

(1) OJ C 68, 9.3.2000, p. 1.
(2) OJ C 68, 9.3.2000, p. 24.
(3) OJ C 100, 7.4.2000.
(4) OJ C 146, 25.5.2000.
(5) Regulation (EC) Nos 1260/1999, 1261/1999 (ERDF), 1262/1999 (ESF).
(6)
(7) OJ C 296, 18.10.2000, p. 380.

‘Texts Adopted’, Item 1.

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6.
Calls on the Council and Commission to formulate a clear and objective definition of the principle of
additionality, to enable penalties to be considered where necessary in cases of failure by the Member States
to comply with that principle, but also connection with measures to protect the Community’s financial
interests in accordance with Article 280 of the EC Treaty;

Urges the Commission and the Member States to ensure, under the partnership arrangements, that
information is coordinated more effectively while administrative formalities are

7.
the transmission of
reduced;

Calls on the Commission not to make verification of the additionality principle a separate exercise,

8.
but to include it in an overall report drawn up for each programming period;

9.
Stresses the importance of respect for both the spirit and the letter of the principle of additionality in
order to ensure that Structural Funds are not used as a replacement for national public or equivalent
expenditure; underlines the duty of the Member States and regional authorities in this regard in providing
accurate and timely data to the Commission;

10.
Calls however on the Commission to establish effective procedures for verification and provide the
tools necessary for meaningful analysis and comparison of the data; considers furthermore that these
guidelines should be clearly laid down in the implementation provisions of the CSFs and SPDs when they
are being drawn up, enabling the principle to be better integrated into the programming framework;
requests from the Commission a precise evaluation report on additionality in the second triennial report
on cohesion which it is shortly to submit;

Considers that the verification exercise will only become meaningful if the results of the Commis-
11.
sion’s analyses are published and sanctions (or other legal consequences) applied in cases of non-compli-
ance; recalls however that penalties must be based on reliable data and subject to precise and clear criteria;

Is convinced that greater transparency in the application of the principle is required from all part-
12.
ners and that national and regional authorities should also be involved in the assessment of additionality at
a regional level in conformity with the programming and planning processes which determine the alloca-
tion of public expenditure;

Considers that the verification of the principle of additionality is currently regarded as an isolated

13.
task and should rather be integrated within the framework of the monitoring or evaluation procedures;

Special Report No 7/1999

14.
Notes that, in respect of the period 1994-1999, quite considerable ERDF financial packages are
earmarked for industrial sites (development, totally new areas, redevelopment) and that the Commission
does not know where the money actually goes; notes that a portion of the funds has been used to finance
measures including projects other than the redevelopment of industrial sites;

Calls on the Commission to ensure that the references to detailed objectives, physical indicators and
15.
impact in terms of business created or established and of jobs created or saved, are not confined to the
initial phase of development programmes for industrial sites but cover the whole of the programme; calls
on the Commission and the Member States to develop the tools to analyse and follow up the implementa-
tion of the programmes, particularly as regards their impact on unemployment;

16.
Calls on the Member States and the Commission to improve the supply of accounting and financial
information on the utilisation of ERDF funding; to that end, calls for information contained in aid files to
be incorporated in the database of the Sincom computerised accounting systems;

17.
Calls on the Member States and the Commission to introduce a genuine Community restructuring
policy, covering the determination of requirements, criteria for the selection of projects and an assessment
of the results achieved, with a view to ensuring active management of regional development; calls further-
more on the Member States and the Commission to lay emphasis on the conditions for the regional devel-

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opment of industrial sites; calls for regional coordination between the various actors to be made a pivotal
element of this policy in order to avoid competition being created between promoters at regional level and
thus the aid being dispersed; calls on the Commission to promote the simplification of national and local
purchasing procedures, thus reducing the costs they entail;

18.
Calls on the Commission to give careful consideration to cases in which Community subsidies
should be replaced by loans and to investigate to what extent, and how soon, the Commission can phase
out its activities relating to industrial sites, observing the subsidiarity principle;

Special Report No 3/2000

19.
Notes that the objectives of the ESF and the EAGGF Guidance Section are not clearly enough
defined, that the ESF target groups are poorly defined and that the delay in the implementation of the
EAGGF Guidance Section has rendered potential beneficiaries of setting-up aid ineligible for such aid;

20.
Notes the difficulties involved in measuring the impact which such aid has on the target group, and
calls for statistics to take into account the wide range of beneficiaries of this aid and the diversity of the
integration routes to be established;

Notes also the difficulty in gauging the effectiveness of the transnationality of the Community initia-
21.
tive Youthstart owing to the lack of common rules on the eligible costs of transnational coordination;
recalls that transnationality is a prime objective of this Community initiative;

Regrets that the Member States mostly submit very vague action plans, which are nevertheless
22.
accepted by the Commission, and therefore calls on the Member States to submit action plans founded
on objective and measurable criteria;

Calls on the Commission and the Member States to take action aimed at improving synergies
23.
among the funds and among the national actions, and to ensure that the resources allocated to the ESF
are more carefully targeted; calls on the Commission and on the Member States to improve coordination
between the national and the European funds to ensure that programmes coincide in length; calls on the
Member States to improve their financial monitoring of ESF programmes and measures;

24.
Calls also in this connection for a simplification of administrative procedures at both Commission
and Member State levels, with a view to preventing late approval of programmes, which renders them
inoperable;

Special Report No 7/2000

25.
Expresses support for the activities conducted under the International Fund for Ireland (IFI) and the
special peace and reconciliation (P&R) programme, which it acknowledges as an innovative and positive
means of consolidating the peace process;

26.
Notes that the two programmes are different in nature, with the IFI being an international pro-
gramme and thereby more difficult to monitor for the EU, while the P&R programme stems from a Com-
munity initiative;

Notes, in connection with the IFI, that the Commission failed to carry out the necessary verifica-

27.
tions and on-the-spot checks during the period 1995-1997;

Questions the effectiveness of the IFI funding system, which has failed to ensure that EU appropria-
28.
tions are used to best effect, with advance payments being made into the Fund without any assessment
being made of its immediate financial needs;

Notes the Commission’s undertaking to carry out a detailed audit of the IFI for 1998 and 2000, and

29.
asks to be notified of the outcome of that audit;

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30.
Points out that it has approved the Council Regulation concerning Community financial contribu-
tions to the International Fund for Ireland for the financial years 2000, 2001 and 2002 and emphasises
the need for EU contributions to the IFI over the next three years to be allocated to cross-border or cross-
community projects, to have a genuine additional impact on the target areas and to be used in accordance
with the additionality principle;

Draws attention to the fact that the P&R programme is both innovative and complex, owing to the

31.
wide range of implementing bodies involved;

Questions the effectiveness of using a three-year funding system for a five-year programme, since

32.
this leads to delays in implementation of the programmes;

33.
Expresses concern, furthermore, about the overlap between these aid programmes and the Struc-
tural Funds, which undermines efficiency and leads to delays in the implementation of other programmes;

Calls on the Commission to strengthen its monitoring and evaluation procedures with a view to

34.
making such funding more effective;

Notes the innovative nature of the International Fund for Ireland and its role as a first funder of

35.
projects;

Recognises that in the audit period it pioneered the joint management of programmes and was

36.
innovative in giving priority to disadvantaged areas;

37.

Considers that the rhythm of payments to the IFI should reflect its financial needs;

38. While recognising the difficult environment in which the IFI has operated, urges that uniform cri-
teria for the evaluation of projects be consistently used and that the Commission monitor the appropriate-
ness of EU expenditure on IFI projects and ensure that greater transparency in future projects funded by
the IFI should occur;

Notes the success of the Peace and Reconciliation Programme’s ‘bottom-up’ approach in building

39.
cross-community participation and dialogue;

Urges that the experiences gained in the implementation of the programme be fed into the design

40.
of PEACE II;

Considers that project appraisal needs to be strengthened through the use of explicit, written criteria

41.
which would also to serve to strengthen ex-post impact assessment;

Calls for increased publicity be given to measures adopted under the Peace and Reconciliation pro-

42.
gramme;

Calls for steps be taken to ensure at all levels effective coordination between the International Fund
43.
for Ireland and the PEACE II programme, including a viable and easily understandable system of depriva-
tion indices, consistently applied, and more effective targeting and assessment of projects so funded;

Calls for the establishment of clear audit lines, cost/benefit analysis and achievable exit strategies to

44.
be implemented in both elements of this report;

Recommends that PEACE II projects should also focus in the medium term on the creation of

45.
sustainable jobs and viable economic regeneration;

46. Welcomes the fact that organisations have now been employed to actively promote and publicise
the work of the Peace and Reconciliation Programme;

*

*

*

Instructs its President to forward this resolution to the Council, the Commission and the Court of

47.
Auditors.