Communication from the Commission — Answers of the Member States to the Court of Auditors' 1999 Annual Report
Date: 2001-11-10
Institutions: European Commission
Subjects: EU Member State, European Court of Auditors, activity report

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Official Journal of the European Communities

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COMMUNICATION FROM THE COMMISSION

Answers of the Member States to the Court of Auditors’ 1999 Annual Report

(2001/C 316/02)

I. INTRODUCTION

the purpose of

the Financial Regulation,

In accordance with Article 276(3) of the Treaty and Article
the
89(8) of
Commission’s follow-up report is to set out the measures it
has taken in response to the observations accompanying the
decisions
by
Parliament concerning the implementation of expenditure,
and to the comments accompanying the recommendations
on discharge adopted by the Council.

observations

discharge

giving

other

and

Since the 1996 Dublin European Council, the Commission has
been requesting Member States, in accordance with the SEM
2000 objectives of sound and efficient financial management,
to provide information on the measures taken in response to
the Court of Auditors’ observations in its annual report and
special reports. These measures are complementary to those
taken by the Commission.

This report presents the Member States’ replies to the obser-
vations in the Court of Auditors’ Annual Report for 1999 and
it contains details of the action taken by the Member States in
response to the Court of Auditors’ observations. This year
Member States were asked to put the emphasis on measures
the shortcomings
which will provide lasting remedies for
identified and mentioned in the Court’s report and in its
statement of assurance. The final purpose of this report is to
contribute
financial management of
the
Community funds.

to improving

for

are

responsible

The Court of Auditors points out in its 1999 Annual Report
that Member States
the day-to-day
management of the bulk of the funds from the Community
budget. It adds that the annual report and the special reports
draw attention to serious and persistent weaknesses in Member
States’ management
The Court
accordingly requires the Member States to complete implemen-
for
tation of
Community funds.

the new management and control

systems.

systems

control

and

it

is essential

In its recommendation on the discharge for 1999, the Council
has invited the Commission to intensify and consolidate admin-
istrative cooperation with the Member States. It also stressed
the Commission establish efficient
that
management and monitoring systems
the purpose of
prevention and for taking corrective measures, if necessary in
association with national administrations. Parliament has also
strongly emphasised the role played by the Member States in
the proper administration of Community resources.

that

for

The Commission’s request to the Member States was in three
parts. The first one contained the Court’s observations which
identified the Member State concerned, the second part set out
the Court’s general observations where no Member State was
identified, and the last part presented the errors recorded by

the Court in the Statement of Assurance for which the Member
States are responsible.

the countries

identified in the annual

The scope and quality of the Member States’ replies vary widely
from country to country. Only the responses of Sweden, the
United Kingdom, France and the Netherlands can be considered
complete and of high quality. For the first part of the request,
almost all
report
responded to the Court’s remarks, but some did not answer
them all
III and IV below). Seven countries
provided no answers at all to the second part, general obser-
vations of the Court where no Member State is identified, and
the replies of the other countries, with some exceptions, were
incomplete. Finally, most of the countries answered the third
in the Statement of
part,
Assurance, but
the errors were
commented on.

the errors listed by the Court

in some cases not all

(see points II,

Member States’ replies to the Court’s general observations
identified were, with some
where no Member State is
inadequate. Most of the Member States failed to
exceptions,
corrective measures. Descriptions of
propose
structural
remedial action already taken,
to be
in progress or
adopted for individual error cases were generally detailed and
the responses constructive.

still

Some Member States emphasise the importance for Member
States of respecting their obligations to manage EU funds
properly. Other countries are concerned about the high error
rate as regards payments.

Certain countries express support for the basic ideas underlying
the Commission’s proposal for overhauling the Financial Regu-
lation or highlight that the recasting of this regulation must be
completed rapidly with the involvement of
the Court of
Auditors.

Some Member States ask the Court of Auditors to name the
Member States in its annual report. Others criticise the Court’s
refusal to give specific figures for the error rate.

This report presents a broad analysis of
the Statement of
Assurance errors (part II), a selection of the responses sent
by the Member States to the 1999 Court of Auditors’ Annual
Report concerning own resources, the common agricultural
policy and structural actions (parts III, IV and V) and some
conclusions (part VI). The subjects selected have been chosen
in relation to the importance of the Court’s observation and to
interest. The Member States more frequently
the general
mentioned in this paper are not those Member States with a
highest level of error but those who have participated more
intensively in the responses to the Court’s Annual Report. The
reference to the paragraph of 1999 Annual Report is given in
brackets.

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II. ANALYSIS OF THE STATEMENT OF ASSURANCE ERRORS

(a) Commission’s analysis of the errors

In its Statement of Assurance, the Court gave a negative
opinion on payments in contrast to the positive opinions
(with certain reservations)
in respect of commitments,
revenue and the reliability of the accounts. The following
analysis concerns only the errors in payments and is based
on data produced by the Court of Auditors.

Overall, the Court found 85 extrapolable substantial errors
in payments. These errors related mainly to the Structural
Funds and the EAGGF Guarantee Section, which is
managed on the Commission’s behalf by the Member
States. The Court considered that Member States were
responsible for 78 of these errors or 84 % of the extra-
polated value, and the Commission for the remainder.
Twenty-two of the errors, or 30 % of the value, were chal-
lenged by the Commission and/or the Member States.

While this would point
to the need to improve the
management and control systems in the Member States, it
is also important to note that, as stated by the Court of
Auditors, where errors are found at final beneficiary level,
these do not in practice affect the amount actually paid
from Community funds to the Member States in the
Structural Funds.

The Court noted 40 errors spread across 11 Member States
in respect of the EAGGF Guarantee Section, amounting
to some 28 % of the total absolute value. Some 27 of these
errors, or 59 % of the absolute value, were at the level of
the final beneficiary, with 11 or 28 % of the value at the
level of the Member State authorities. Two of the errors
were negative in value, i.e. related to under-payments. Many
of the errors involved relatively minor over-declarations of
support. One error,
land area or animals eligible for
value of EAGGF
amounting to 11 % of
related to the non-application of a
Guarantee errors,
supplementary
levy due because milk quotas were
exceeded. The Commission was responsible for two errors
amounting in value to some 14 % of the total.

total

the

The Structural Funds accounted for 30 errors in nine
Member States amounting to some 62 % of
the total
these due to ineligible expenditure being
value, half of
included in claims. Almost half of the errors, accounting
for some 52 % of the value, occurred at the level of the
final beneficiary. Two errors amounting to some 16 % of
the total value were attributed by the Court
to the
Commission, with the remaining errors (14, or 32 % of
the total value) occurring within Member State adminis-
trations. Overall,
just under two thirds of the errors in
value terms concerned the European Regional Development
and Cohesion Funds, while most of the remainder related to
the European Social Fund.

The sampling approach used by the Court in the Statement
of Assurance is designed to enable it to reach an opinion

individual Member
across the budget. This means that
States may be under or over-represented in the sample in
comparison with the total number and value of transactions
relating to them. The DAS results cannot therefore be taken
as representative of the quality of individual programmes or
activities nor of individual Member States’ management and
control systems.

(b) Member States’ responses to the errors

Most of the Member States accept, in their responses to the
Commission’s request, the errors attributed to them in the
Statement of Assurance and they explain the measures
taken. But
there are also a considerable number of
responses that refute the Court’s arguments. The most
frequent situations are as follows:

(cid:151) the Member State disagrees with the Court’s interpre-

tation of the rule,

(cid:151) in some cases the Member State agrees with the nature
of the error but disagrees with its quantification by the
Court; some even disagree with the nature of the error
itself,

(cid:151) the Member State does not interpret the facts in the

same way as the Court,

(cid:151) the Member States disputes the methodology used by

the Court.

In some cases the Member States did not provide any
response
in the
to the errors noted by the Court
Statement of Assurance.

III. OWN RESOURCES

(Chapter 1 of the 1999 Annual Report)

(cid:151) The Court criticises the use by the Member States of two different
national accounts systems, ESA 79 and ESA 95, for calculating
the GNP resource. The Court had observed in previous reports
that ESA 79 did not provide as accurate a reflection as ESA 95
of the Member States’ real capacity to contribute to the budget
(paragraphs 1.33-1.35).

France replies that the own resources Decision adopted by
the Council on 29 September 2000 requires that ESA 95
be used to calculate the GNP resource, and is thus in line
with the Court’s requests. However, it will not enter into
force until it has been ratified by all the Member States.

The United Kingdom agrees with the Court and points out
that it has argued for a swift move to ESA 95 for GNP
calculation purposes, which would reduce
risks
associated with ESA 79 highlighted by the Court of
Auditors.

the

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The Swedish authorities think that the use of two different
national accounts systems is a natural consequence of the
need to ensure that the introduction of ESA 95 will not
unintentionally lead to more resources being made available
to the Community budget. The new own resources
Decision confirms that the GNP amounts must not alter
the balance of resources. When the new own resources
Decision has been ratified by all the Member States, ESA
79 will give way to ESA 95.

(cid:151) The Court criticises both the reliability and the nature of

the
separate account (the B account). Member States must enter in
the B accounts established entitlements which have not yet been
recovered and for which no security has been provided. They must
also enter in the B accounts established entitlements for which
security has been provided but which have been challenged and
might, upon settlement of
the disputes which have arisen, be
subject to change. The Court points out failure by the Member
States to comply with the requirements for making entries in the
B accounts (paragraphs 1.12-1.15). The Council, in its recom-
mendations on the 1999 discharge, invited the Commission, in
close cooperation with the Member States, to continue its efforts
to improve the reliability of the B accounts.

it

intends to change its accounting
France replies that
the
in accordance with the wishes
procedure
Community authorities and has already taken a number
of
the
steps. The Commission has been informed of
changes made.

of

Italy considers that in most cases these anomalies occur
because the separate account
is kept manually, which
means that the potential for error is greater than in the
case of a computerised separate account. It announces that
computerisation of
for own
the quarterly
resources in Italy is now nearing completion and should
become operational in the first quarter of the current year.

accounts

The Irish authorities reply that they are ever conscious of
the need to maintain the separate account in the correct
manner and continuously strive to do so.

(cid:151) The Court also asks the Commission to require the Member
States to provide more detailed analysis of the balances on the
B accounts. This analysis would serve as a basis for showing in
the financial statements the estimated amounts to be recovered,
and to improve management of the debt. Such treatment would
be preferable
the
followed in 1999 by
Commission of making 100 % provision (paragraph 1.16).

to the procedure

that

the generally accepted accounting
Sweden replies
method used in the valuation of debts
to enter
doubtful debts as the amounts not expected to be collected.
In this sense, making a 100 % provision is not therefore
necessarily incorrect, if there is reason to believe that the
sum that can be collected is zero, but this method is not
sound if what the Commission means is that there is a lack
of information about the content of the B account, which

is

forms the basis for the assessment. If this is the case, the
Court of Auditors’ recommendation that a more detailed
analysis be made of the balances on the B accounts is
probably well-founded. Sweden feels that the best solution
individual assessment and
is to use a combination of
recovery figures.
It should be possible, when calculating
the provision, to make individual assessments of separate
items in the B account which give a very large total. For
example, the debts of just five operators represent 70 % of
Sweden’s total balance in the account. For the remaining
30 %, which is spread over hundreds of operators, it would
be very complicated and time-consuming to make indi-
vidual assessments.

(cid:151) The Court found that the late transmission in 1999 by several
Member States of valid assessment bases for the GNP resource
reduced the time available for
the checks performed by the
Commission (paragraph 1.21).

France endeavours to respect the deadlines for transmitting
data for 2000 and earlier years.

In Swedish authorities’ view, it is important that the Member
States send in their annual GNP data in good time so as to
allow the Commission more time for checking and hence
greater comparability between Member States.

expected. This method,

(cid:151) The Court considers that the application of the methodology for
comparing intermediate
consumption currently used by two
Member States for the VAT resource should be applied by all
the other countries, provided the necessary amendments and
improvements are made. The aim of the method mentioned in
the Court’s Report
is, by comparing information from VAT
statements with data from other statistical sources, to identify
the sectors within the economy where large-scale VAT fraud can
be
in the Court’s opinion, proved
convincing at the practical level even where amendments proved
the data available
necessary because of
(paragraphs 1.65-1.72). In this connection the Council,
in its
recommendation on the 1999 discharge, expressed its concern
about combating VAT fraud and welcomed any initiative that
will provide effective ways of doing so. It added that an exam-
ination of methodology, which would make for more refined risk-
analysis in the area of VAT as referred to by the Court in its
annual report, could be carried out by the Advisory Committee on
Own Resources (ACOR).

the special

features of

France replies that this subject must be discussed in the
Advisory Committee on Own Resources (ACOR), but it
adds that the proposed new procedure must not increase
the workload for the national authorities responsible for
calculating the VAT base. In the French authorities’ view,
a heavier workload might further increase the delays in the
transmission of data to the Commission also mentioned by
the Court. The comparison of statistical and tax data is a
method that France has been using since 1993 to combat
intra-Community VAT fraud.

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Austria is critical of the proposed method. It argues that the
quality of the data required for this method varies, and it
would be inappropriate to draw any firm conclusions
regarding VAT or input tax fraud in individual sectors of
activity based on a comparison of figures from statistical
sources (the national accounts) and tax sources.

the Member States should improve the quality of estimates in
terms both of revenue and expenditure (paragraph 2.20). The
Council,
in its recommendation on the 1999 discharge, called
on the Member States to shorten the procedural deadlines and
the deadlines for transmission of the necessary information.

The Dutch authorities adopt a cautious approach. They
think that the results of the ongoing experiments in this
area should be examined before a decision is taken.

Sweden feels that the method referred to by the Court of
Auditors should be considered. But it thinks that if the
methodology is to be applied successfully, a number of
questions must be resolved relating to the structure of
the statistical system.

IV. COMMON AGRICULTURAL POLICY

(Chapter 2 of the 1999 Annual Report)

(cid:151) The Court notes that, at Member State level, the main formal
errors found were caused by shortcomings in performing the
regulation checks. For instance, the Court criticises the fact that,
in France and Finland,
the minimum percentage of area aid
applications to be covered by on-the-spot checks was not always
increased when the number of errors revealed by the initial exam-
ination of the files was too high, and it says that this is contrary
to the provisions of Commission Regulation (EEC) No 3887/92
(paragraph 2.34).

France replies that where a significant number of anomalies
are identified during on-the-spot checks,
this does not
necessarily imply bad management or fraud, but illustrates
the reliability and appropriateness of
the risk analysis
system and the selection criteria used at department level.
The French authorities point out that the rates for checks
per department for 1999 were set in accordance with the
Commission working paper, which formalises the dual
approach based on two criteria: proportion of anomalies
and surface area affected by the anomalies. In accordance
with this memo, the situation in the departments audited as
part of the statement of assurance for 1999 did not call for
an increase in the rate.

In the view of
the Finnish authorities, no formal error
occurred as referred to in the annual report. They feel
that the rates for checks were set as prescribed by the
Commission in its working paper.

(cid:151) The Court states that there are too many transfers between appro-
priations in EAGGF, and it adds that the number of transfers is
influenced by the variable quality of the Member States’ estimates.
The Court takes the view that these estimates could be improved
by
for
imposing stricter deadlines on the Member States
submission of the estimates and by setting up a more rigorous
system to monitor them. It considers that the Commission and

Sweden sees no need for further measures to improve the
budget
for agricultural measures beyond the
improvements already made.

forecasts

The Dutch authorities agree with the conclusions of a study
carried out by the Commission into the reliability of the
Member States’ forecasts. This study showed how difficult it
would be to improve forecasts, except
in the case of
supporting measures and rural development.

(cid:151) The Court of Auditors refers to problems detected in Special
Report 4/98 concerning butter
imports from New Zealand.
This butter can, subject to certain conditions, be imported at a
preferential rate. A number of problems have arisen in the past in
the European Union because the butter did not appear to meet the
relevant conditions. The Court of Auditors considers that no
appropriate measures have been taken in some
countries
(paragraphs 2.113- 2.129).

The Netherlands states that the Dutch customs authorities
discovered that
the legal
requirements, and made a further claim on that basis.
They add that the legal proceedings are still pending.

the fat content did not meet

income

The United Kingdom accepts
that appropriate physical
controls could have identified irregularities at an earlier
stage, but the key point in its view is that there was no
loss of
to the Community budget, and no
significant cost to Community funds. The UK considers
acted quickly to establish the
that British Customs
amount of arrears due (GBP 250 million) and take the
necessary action to collect the appropriate amounts from
the companies involved.

(cid:151) Some Member States are criticised by the Court for continuing to
have many small over-declarations of agricultural areas eligible for
aid and of the number of head of livestock for animal premium
(paragraph 2.26).

The Danish authorities reject that criticism and point out
that
the Danish parcel register system and the related
are
arrangements
generally recognised to function smoothly. They argue
that
in fact been adopted by other
countries, and by the Commission, as a model.

administering

system has

cases

area

this

aid

for

The United Kingdom accepts the Court’s comments and
explains that it has now made significant improvements
in the scheme administration, which it believes will
lead
to a reduction in errors found.

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(cid:151) The Court

contests

the financial

correction percentage (2 %)
applied to France for expenditure on area aid in the marketing
year 1994; in its view, the Commission should have applied 5 %
(paragraphs 2.50-51).

The French authorities contest even the 2 % flat-rate
correction imposed by the Commission. They have
brought an action for annulment before the Court of
Justice of the European Communities on the ground that
the correction is disproportionate to the irregularity, which
did not undermine the objectives of Community legislation.

(cid:151) The Court also contests the financial correction percentage (2 %)
applied to Greece. It notes that, in the arable crops sector, the
required cross-checks were not carried out in this country until
after the payment was made; this should have been treated as a
weakness affecting the key controls and led to a 5 % correction
(paragraph 2.52).

The Greek authorities dispute the Court’s criticism and reply
that
the
the required cross-checks were carried out at
required time with the required frequency, as acknowledged
by both the Commission and the national departments, and
that efforts are continually being made to improve them.

(cid:151) The Court criticises the fact

that according to an audit of a
regional agency in Sweden the method used to apportion the
general costs led to the allocation of a higher share of
the
general costs to the projects co-financed by the Union than to
the projects financed by Sweden alone (paragraph 2.38).

Sweden disputes the criticism and replies that the operations
financed by the EU in the agency in question are governed
by a relatively detailed set of rules compared with many
other areas of the agency’s activity. The greater financial
burden was the result of a request from the management
for more time for the EU project. This explains the allo-
cation of costs noted by the Court of Auditors.

(cid:151) The Court notes that

in Greece, unions of cooperatives made
unauthorised deductions from the amount of aid to be paid for
olive oil, tobacco and cotton production (paragraphs 2.27 and
2.29).

The Greek authorities recognise the facts but argue that at
the time of the payments, the Community regulations did
not explicitly require that beneficiaries be paid the full
the adoption of Regulation (EC) No
amount. Later,
1259/99, which came into force on 1 January 2000,
regarding the ban on making
removed any doubts
deductions
In consequence
the Ministry of Agriculture has announced arrangements
whereby the payments will be made direct to the bene-
ficiaries.

from Community subsidies.

V. STRUCTURAL ACTIONS

(Chapter 3 of the 1999 Annual Report)

(cid:151) The Court notes that as regards Objective 2 for

the period
1994-1996, there are considerable delays in closing programmes

In its recommendation on the 1999
(paragraphs 3.30-32).
discharge, the Council points out that particular attention needs
to be paid to the supervision and control of
the closure of
programmes.

France replies that the new Structural Funds regulation sets
deadlines by which sums committed for measures which
have not yet been the subject of a final payment application
by Member States are decommitted. The deadlines are 31
March 2001 for programmes prior to 1994, and 31 March
2003 for programmes between 1994 and 1999.

The United Kingdom agrees on the importance of closing
old programmes quickly. However in some cases it has
taken longer
to resolve outstanding
financial issues with the applicants.

than expected

(cid:151) The Court considers that the number of anomalies occurring in
the declarations of expenditure co-financed by the Community is
still high. It points out that almost all the substantive errors in
payments directly affecting the legality and regularity of
the
underlying transactions occurred in the Member States, at the
level of the final beneficiaries (paragraphs 3.42 and 3.43). In
its recommendation on the 1999 discharge, the Council recognises
the importance of efficient implementation of the provisions laid
down in Regulation (EC) No 2064/97 for
the purpose of
strengthening the provisions on financial controls carried out by
the Member States and the Protocols concluded between national
audit services and the Commission. Moreover, given the volume of
structural measures in the Community budget, the Council stresses
the importance of the steps taken by the Member States and the
Commission to improve management, follow-up and control in
this area.

In order to reduce errors at the level of final beneficiaries,
the United Kingdom has revised and clarified the application
form and grant offer letter for the 2000-06 programmes in
order to explain applicants’ responsibilities in more detail.

in

cases

required

financial

corrections

France considers that with the introduction of Regulation
(EC) No 2064/97 on the control of the Structural Funds,
the Commission launched a process of
tightening up
financial control of the Structural Funds. This process has
continued in 2000 with the adoption of two new regu-
lations on the management and control of the Funds and
the
of
non-compliance with the rules. But the French authorities
point out that the time required to introduce these various
regulations in the Member States is relatively long. France
welcomes the regulatory efforts the Commission has made
since 1997 to tighten up financial control of the Structural
Funds. It fully endorses the Court’s recommendation that
the Commission pay closer attention to implementation in
the Member States of these successive regulations. In the
French authorities’ view, it is essential that the Commission
take this action once the above regulations have been
promulgated so that implementation is fast, effective and
uniform within the Union.

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With a view to avoiding errors, the authorities responsible
in Sweden have arranged training and
for payments
information meetings for administrators at all
levels in
the implementing organisation. Checklists have also been
compiled and information has been circulated on auditing
visits in order to minimise the number of errors. The fact
that Sweden normally does not pay out aid to the project
sponsors in advance but only when the costs have been
accounted for neutralises,
the risk of
substantive errors.

in our opinion,

However, it does not consider it appropriate to introduce
percentages for calculating indirect overheads, as projects
differ from one Member State to another.

(cid:151) The Court criticises some aspects of the implementation of Regu-
intended to
lation (EC) No 2064/97. This
strengthen the financial controls that
the Member States are
required to exercise over operations co-financed by the Structural
Funds (paragraphs 3.69-3.74).

regulation is

Partly in response to the irregularities detected in the
the Dutch Government
European Social Fund in 1999,
decided to investigate on a nation-wide basis whether
improvements were also needed with regard to the
management, inspection and monitoring of other Structural
Funds. The Ministries of Foreign Affairs, Economic Affairs,
Agriculture, Nature Management and Fisheries and Social
Affairs
examined whether
improvements to those aspects of the Structural Funds of
relevance to them are necessary and desirable. Appropriate
measures have been taken by the various ministries.

Employment

have

and

To ensure active involvement in that part of EU structural
policy which is implemented on a regional basis,
is
necessary for ministers to have adequate powers. In that
connection, the bill on the monitoring of European grants
is extremely important. The bills were submitted to the
Dutch Second Chamber on 2 January 2001.

it

(cid:151) The Court states that its audit revealed a number of cases where
decommitments should have been made before the end of
the
budgetary year 1999 (so-called (cid:145)sleeping projects(cid:146)). The Court
considers that the Commission should take steps to decommit
these amounts (paragraph 3.53).

Regarding sleeping commitments, Sweden takes the view
that the Community Regulation should state that if inad-
equate requests for payment are received a project should
be closed down and no payments made.

(cid:151) Eligibility datasheet No 5 in the Commission Decision of 23
April 1997 stipulates that overheads should be charged in a
fair and reasonable way. The Court reported wide variations in
the way overhead charges are taken into account. The Court
considers that models for calculating indirect overheads should
be
the 2000-2006 programming period
(paragraphs 3.64-67). With regard to the use of overhead
charges and lump-sum payments, the Council, in its recommen-
dation on the 1999 discharge, points to the need to comply with
the rules in force.

introduced before

the 1995-1999 programming period Sweden
During
developed models
indirect overheads.
Sweden maintains a strict position on the approval of
indirect overheads. Sweden is in favour of the new Regu-
expenditure.
lation (EC) No 1685/2000 on eligible

calculating

for

Ireland explains that,
in order to help the relevant ERDF
spending bodies to comply with the regulation, the Irish
Department of Finance issued a circular in 1998 providing
guidance for its implementation.

(cid:151) The Court thinks that the Commission should review the rules on
eligible expenditure in order to better target the use of Community
funding (paragraph 3.80).

The United Kingdom replies
the Commission has
already acted on this and the new datasheets have been
endorsed by the Member States.

that

Sweden points out that the Commission,
in collaboration
with the Member States, has produced a new Regulation
(EC) No 1685/2000 on eligible expenditure, which Sweden
considers to be a positive step. It considers that there will
always be problems of
interpretation, however, and the
Swedish authorities would like to see closer cooperation
with the Commission to resolve any questions which
might arise.

Ireland replies that the rules on eligible expenditure are
always open to interpretation. It is impossible to forecast
all the possible situations.

(cid:151) The Court considers that the procedure to take corrective actions
on accepted irregularities should be improved (paragraph 3.85)

The United Kingdom monitoring authorities will encourage
regional administrators to resolve detected irregularities
within six months. Moreover, guidance on the reporting
and prevention of
irregularities by the United Kingdom
departments is to be improved.

(cid:151) The Court criticises the fact that,

in the case of the Cohesion
Fund, the Commission does not always have access to all the
essential
information required by the Regulation (paragraph
3.114).

Ireland refutes this criticism and replies that in Ireland the
Commission has unrestricted access to all
the essential
information it requires in respect of projects put forward
for Cohesion Fund assistance.

C 316/8

EN

Official Journal of the European Communities

10.11.2001

VI. CONCLUSIONS

the Member States,

Even if
to the
Commission request, accept many errors noted by the Court
of Auditors, there are also a considerable number of errors for
which the Member States refuse the Court’s arguments.

responses

in their

for which the

individual Member States

the errors noted by the Court

In general the Member States have presented remedial actions
for
in the Statement of
are
Assurance
responsible. On the contrary, for the general observations of
the Court with no Member State identified, the Member States
have provided very few examples of remedial action taken,
which is problematic considering that 80 % of expenditure
are delegated to Member States. Moreover, the Council, in its
decision on the 1999 Discharge, has recommended intensifying
administrative cooperation between the Commission and the
Member States.

To substantially reduce the Statement of Assurance error rate,
the Community
the management by the Member States of

funds must be improved. This is to a large extent a responsi-
bility of the Member States but also a responsibility of the
Commission, which can propose appropriate changes in the
European Union regulations.

In the future the aim will be to publish the answers of the
Member States to the Court of Auditors’ Annual Report earlier
in the discharge procedure. The report from the Commission
should be ready at the moment the Council debates its recom-
mendation for the discharge.

For this purpose, as early as possible in November 2001, and
in view of the preparation of the report relating to budget year
2000, the Commission will establish,
in agreement with the
Member States which general and specific issues they are
invited to address in their contributions. Their responses will
be requested for 20 December 2001. The Commission will
the Discharge Authority
prepare a summary report
summarising these contributions around the end of February
2002.

for

Final report of the Hearing Officer in case COMP/29.373 (cid:151) Visa International

(pursuant to Article 15 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms
of reference of Hearing Officers in certain competition proceedings (cid:151) OJ L 162, 19.6.2001, p. 21)

(2001/C 316/03)

(Text with EEA relevance)

The draft Decision does not give rise to any particular observation. The proceedings took a normal course.
The rights of third parties to be have been fully respected.

Done at Brussels on 31 July 2001.

Helmuth SCHR(cid:214)TER