Special Report No 2/2002 on the Socrates and Youth for Europe Community action programmes, together with the Commission's replies
Date: 2002-03-07
Institutions: European Court of Auditors
Subjects: EU programme, cultural cooperation, education, management, report, young person

7.6.2002

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I

(Information)

COURT OF AUDITORS

SPECIAL REPORT No 2/2002

on the Socrates and Youth for Europe Community action programmes, together with the
Commission’s replies

(submitted pursuant to Article 248(4), second subparagraph, of the EC Treaty)

(2002/C 136/01)

CONTENTS

Paragraph

Page

LIST OF ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Design weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I-IX

III-VI

Delays and shortcomings in implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

VII-IX

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Legal framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial allocations

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scope of the audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IMPLEMENTATION OF THE BUDGET FOR THE PROGRAMMES . . . . . . . . . . . . . . . . . . . . . . .

Socrates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Youth for Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Differences between sources of budgetary information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Breakdown, by action, of the appropriations used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE DESIGN OF THE PROGRAMMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Socrates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Youth for Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DELAYS AND AMENDMENTS TO IMPLEMENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SHORTCOMINGS IN THE MANAGEMENT SYSTEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General framework of the management system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Centralised management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss of control in the delegation of management to a TAO . . . . . . . . . . . . . . . . . . . . . . .

Decentralised management

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The national agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Management of the financial framework agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IT systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-5

2

3

4-5

6-9

6

7

8

9

10-18

10-14

15-18

19-21

22-51

22-24

25-38

25-38

39-51

39-45

46-50

51

2

3

3

3

4

4

4

5

5

5

5

5

5

5

5

8

9

9

9

12

12

13

13

14

14

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Paragraph

Page

WEAKNESSES IN THE IMPLEMENTATION OF THE ACTIONS AND THE MANAGEMENT OF
PROJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shortcomings in the management of the decentralised actions and projects

. . . . . . . . . . . .

Problems in connection with management by the national agencies . . . . . . . . . . . . . . . .

Individual deficiencies found in the audited actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shortcomings in the management of the centralised actions and projects . . . . . . . . . . . . . .

Problems associated with a TAO’s management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Individual deficiencies found in the audited actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

THE COMMISSION’S AUDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52-84

53-74

53-56

57-74

75-84

75-77

78-84

85-90

EVALUATION OF THE PROGRAMMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91-105

Results of the Court’s audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93-102

New programmes (2000 to 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103-105

CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106-112

RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113-120

TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Commission’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14

14

14

15

17

17

17

18

18

19

20

20

20

22

27

ABBREVIATIONS

ACPC

Advisory Committee on Procurements and Contracts

DG EAC

Directorate-General for Education and Culture

EFTA

European Free Trade Association

IC

NA

ODL

OLAF

JEP

TAO

YfE

institutional contract

national agency

open and distance learning

European Anti-fraud Office

joint educational projects

technical assistance office

Youth for Europe

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SUMMARY

I. The Socrates and Youth for Europe programmes have been allocated budgetary funds of 920 million euro
and 126 million euro respectively. They have contributed to a strengthening of cooperation between universi-
ties in the European Union and in the other participant countries and have made multicultural exchange activi-
ties possible for the benefit of young people.

II. Nevertheless, the Court’s audit has revealed weaknesses in the design of the two programmes and short-
comings in the management of their implementation.

Design weaknesses

III. The two programmes Socrates (paragraphs 10 to 14) and Youth for Europe (YfE) (paragraphs 15 to 18)
both suffer from shortcomings in their design. The design of the Socrates programme, in particular, is com-
plex, with a heterogeneous array of 38 actions, sub-actions and measures. In consequence the programme was
interpreted in different ways and cooperation between the Member States became more complicated. Likewise,
the absence of definitions of criteria and parameters has made it difficult to evaluate the results obtained fol-
lowing implementation of the programmes. Furthermore, the design did not include an appropriate frame-
work for producing synergy from the various Community programmes.

IV. The Commission manages a certain number of actions from Brussels, which, for this reason, are referred
to as centralised, through a technical assistance office (TAO), while those subject to decentralised management
in the Member States and other beneficiary countries are run through national agencies (NAs). In both cases,
the management system was marked by various types of shortcomings (paragraphs 25 and 51).

V. The delegation of responsibilities to the TAO gave rise to weaknesses which the Court was to come across
repeatedly: irregularities in the delegation of responsibility, both with regard to the principle of delegation and
the form its implementation took, various confusions of interest and risks for the Community’s assets, and
the costly nature of the management. The situations which arose from this were, however, nothing like as seri-
ous as those encountered in other Community programmes (paragraphs 25 to 36).

VI. With regard to the decentralised actions, their implementation suffered both from the absence of a legal
framework setting out the precise division of responsibilities between the Commission and the Member States
and of an appropriate status for the NAs, which, in the majority of cases, did not have adequate means at their
disposal to carry out the tasks entrusted to them (paragraphs 39 to 51).

Delays and shortcomings in implementation

VII. Because of the time required by the legislator to adopt the relevant decisions, the start of the two pro-
grammes was delayed and there were delays in the implementation of new actions because of the lack of
structures and of an appropriate information policy (paragraphs 19 and 21). The cumbersome nature of the
management system caused additional delays in implementation of the programmes, the main consequence
of which was to make achievement of the general objective of prefinancing the projects illusory. In fact, the
beneficiaries sometimes did not receive Community aid until after the projects had been carried out. The accu-
mulated delays made it impossible to close the actions by the deadlines set in the financial framework agree-
ments. The management of these agreements was, in general, inadequate (paragraphs 46 to 50). Implementa-
tion was hampered by the use of unsuitable IT network systems (paragraph 51).

VIII. Management shortcomings were found in the majority of the 27 NAs audited and, at the TAO, from the
selection of projects to the monitoring of their implementation. These failings were aggravated by the lack of

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any genuine control and evaluation culture on the part of the managing bodies, both national (para-
graphs 53 to 56) and Community (paragraphs 75 to 83). For instance, the audit identified several projects
where the Court notified the European Anti-fraud Office (OLAF) of suspicions of fraud (paragraphs 74 and
98). On a more general level, these weaknesses had negative consequences for the results and the overall impact
of the measures (paragraphs 63 to 65, 80 to 83, 91 and 92), although they cannot always be quantified due to
the absence of relevant statistical data. This is the case for the Youth for Europe programme, where it is impos-
sible to verify whether the wish expressed by the European legislator, that help should be given to disadvan-
taged young people, has been fulfilled (paragraphs 17 and 68).

IX. Evaluation reports were delayed and their impact remains questionable. The contracting procedure and
the management and monitoring of study and evaluation contracts revealed serious deficiencies and irregulari-
ties occurred at both Commission and contractors level (paragraphs 91 to 102).

INTRODUCTION

Legal framework

1. Education, training and youth are some of the European
Union’s top-priority policy areas, in so far as their objective is to
contribute to the development of qualifications and employment
and to bring Europe closer to its citizens (1). In this respect, the
Socrates and Youth for Europe (YfE) programmes were a key
component of the European Union’s strategy for education and
cooperation in the field of youth during the period from 1 Janu-
ary 1995 to 31 December 1999. These two programmes, which
are open to the countries of the European Free Trade Association
(EFTA) and the applicant countries, form part of a corpus of mea-
sures designed to further the process of enlargement of the Euro-
pean Union. They have been extended for the period from 1 Janu-
ary 2000 to 31 December 2006. Indicative financial allocations
of 1 850 million euro and 520 million euro have been set aside
for Socrates and YfE respectively (2). The Socrates programme,
and the Erasmus action in particular, have undeniably had a major
impact on the student population. The latter action has also made
a considerable contribution towards opening up the universities
to cooperation in the European context.

(1) The base Decision No 819/95/EC establishing the Community action
programme Socrates refers to the Commission’s Green Paper on
introducing the European dimension of education in schools and to
the Commission’s White Paper, in the light of which the European
Council adopted in 1993 an action plan of growth, competitiveness
and employment. The base Decision No 818/95/EC adopting the third
phase of the Youth for Europe programme referred in particular to
the conclusions of the European Councils of 1992 and 1993, which
underline the requirement that support should be given to activities
to develop the independence and creativity of young people and to
combat exclusion and racism, particularly through the education of
young people. In the course of implementation of two Community
programmes other political developments have taken shape in the
field of European education, with the publication in 1996 of, amongst
other things, the ‘White Paper:’ Teaching and learning, towards the
learning society, and the ‘Green Paper on the obstacles to transna-
tional mobility in Europe’, and with the Commission Communica-
tion in 1997 ‘Towards a Europe of knowledge’.

(2) For the Socrates programme, see Decision No 253/2000/EC of

24 January 2002, (OJ L 28, 3.2.2000).
For the Youth for Europe programme, see Decision No 1031/
2000/EC of 13 April 2000 (OJ L 117, 18.5.2000).

2. The Community action programme Socrates was established
by Decision No 819/95/EC of the European Parliament and of the
Council (3) of 14 March 1995 and amended by Decision
No 576/98/EC (4) of 23 February 1998. ‘Intended to contribute to
the development of quality education’ and an open European area
for cooperation in education, it is mainly aimed at higher educa-
tion (Erasmus) and school education (Comenius) but also includes
horizontal activities. The Community action programme YfE,
which was also adopted on 14 March 1995 by Decision No 818/
95/EC of the European Parliament and the Council, is the Com-
munity’s special instrument for encouraging cooperation policy
in the youth field and contributing ‘to the educational process of
young people’ by means of five actions involving exchanges and
cooperation projects set up by young people from various Com-
munity countries, but from third countries as well (5).

Financial allocations

3. The budget for the implementation of the Socrates pro-
gramme, initially set at 850 million euro, was increased to 920 mil-
lion euro by Decision No 576/98/EC. The budget for the imple-
mentation of the Youth for Europe programme amounted to
126 million euro. In the end, the budgetary funds allocated to
these two programmes will come to 998 million euro and 141 mil-
lion euro respectively, essentially because of the opening of the
two programmes to associated countries.

(3) OJ L 87, 20.4.1995.
(4) OJ L 77, 14.3.1998.
(5) Within the framework of Action D (Exchanges with third countries),
cooperation may take place with the countries of central Europe, the
Commonwealth of Independent States (CIS), the Mediterranean basin
and Latin America. Action B provides for European cooperation in
the field of training youth workers and Action C cooperation between
structures in the Member States.

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Scope of the audit

4. Audits were carried out in the Commission’s departments
(DG Education and Culture), the TAO common to both pro-
grammes, in seven Member States (Germany, Spain, France, Greece,
Italy, Luxembourg and the United Kingdom) which included the
five main beneficiaries, in 27 national management structures and
on the premises of final beneficiaries. Emphasis was placed on
examination of the decision-making procedures relating to finan-
cial management, and of monitoring and evaluation.

5. The audit focused in particular on the management system
applied to the implementation of
the two programmes
(1995 to 1999) and was carried out by means of an examination
of five key measures for Socrates (Erasmus: Actions 1 and 2;
Comenius: Action 1; Lingua: Action E; Open and distance learn-
ing) and two actions for YfE (Actions A1 and D), which were tar-
geted in the context of the audit. The actions selected for Socrates
represent 76 % of this programme’s budget, those for YfE covered
75 % of the budget.

IMPLEMENTATION OF THE BUDGET FOR THE PROGRAMMES

Socrates

6. At 31 December 1999, appropriations amounting to 992 mil-
lion euro had been committed, i.e. a utilisation rate of 99 %, and
payment appropriations amounting to 938 million euro had been
utilised, which represents a rate of implementation of 92 %. Table 1
summarises the budgetary implementation of commitments and
payments by year. Payment appropriations amounting to 54 mil-
lion euro lapsed.

Youth for Europe

7. Opening the YfE programme to associated countries resulted
in the appropriations being increased for the same reason. The
budget appropriations available amounted to 141 million euro for
commitments and 135 million euro for payments. Utilisation of
appropriations came to 134 million euro for commitments (95 %)
and 118 million euro for payments (87 %). Table 2 shows the bud-
getary implementation of commitments and payments by year.

and expenditure account and the balance sheet (difference of 51
million euro). The difference is explained by the fact that the
amount entered in the revenue and expenditure account is for all
the expenditure effected for the benefit of all the participant coun-
tries, whereas the budget only takes the figures for the part of
implementation that corresponds to the allocation for 15 Mem-
ber States of the Union. The financial distribution presented in the
Commission’s final report on the implementation of the Socrates
programme (1) is limited to the EU Member States, rather than all
the countries participating.

Breakdown, by action, of the appropriations used

9. Table 4 shows the utilisation of the appropriations commit-
ted, by action, for the implementation of the Socrates programme.
It shows that as regards the thresholds applicable to the various
chapters the requirements of the base Decision No 819/95/EC
have been complied with at the level of the resources to be com-
mitted. Details of the commitment appropriations for YfE by
action are contained in Table 5. Due to the lack of an appropriate
breakdown of the accounting classification, it was not possible for
the audit to verify whether, in accordance with the terms of
Decision No 818/95/EC establishing YfE, at least a third of the
appropriations allocated within the framework of the programme’s
Action A (intra-Community activities directly involving young
people) had been used for the benefit of disadvantaged young
people.

THE DESIGN OF THE PROGRAMMES

Socrates

10. Although education is the responsibility of the Member
States, the Community, under Article 149 of the EC Treaty, must
contribute to the development of quality education and training
in an open European area for cooperation in education. The
objective of the Socrates programme is to encourage cooperation
between the Member States by supporting their activities and
supplementing them where necessary.

Differences between sources of budgetary information

8. Examination of the implementation of the budget revealed a
difference between the various sources of information (see Table 3).
The overall amounts given by the general budget of the European
Union in respect of the implementation of the budget of the
Socrates programme are thus less than those given by the revenue

11. However, the juxtaposition of numerous objectives and con-
cepts set out in very general terms like quality teaching or Euro-
pean citizenship, in combination with an over-complex structure
characterised by a heterogeneous body of 38 different actions,
sub-actions and measures, has resulted in interpretations which
are at variance with one another and this, in turn, has made

(1) COM(2001) 75 final, 12 February 2001.

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cooperation between the Member States more complicated. With
regard to the quality of teaching, it was only when an initial report
was being drawn up for presentation by the Commission at the
close of the Socrates programme that the criteria and indicators
which allow evaluation of the level reached in the various fields
relating to school education were produced (1).

13. This lack of homogeneity in the design largely explains the
poor complementarity of the actions with one another and the
frequently over-theoretical nature of the links intended between
the actions under Chapters I and II and those under Chapter III.

12. The overall design of the programme also suffers from an
approach which combines a presentation based on actions defined
according to categories of beneficiary, i.e. higher education and
school education (Chapters I and II), with other actions of a hori-
zontal nature (Chapter III). Subdividing the latter into a score of
different measures robs the programme of clarity.

14.
In addition, it should be emphasised that although the base
Decision (Article 6) calls on the Commission, in partnership with
the Member States, to ensure overall consistency between this
programme and the other Community programmes and, in par-
ticular, to encourage coordination of activities with the research
framework programme, no procedure was drawn up to organise
such coordination. For this reason, coordination remained
restricted to individual activities.

1. To develop the European dimension in education at all levels.

Objectives of the Socrates programme

2. To promote a quantitive and qualitative improvement of the knowledge of the languages of the European Union and to promote the intercultural

dimension of education.

3. To promote, in the Member States, wide-ranging and intensive cooperation between institutions at all levels of education.

4. To encourage the mobility of teachers.

5. To encourage mobility for students.

6. To encourage contacts among pupils in the European Union.

7. To encourage the academic recognition of diplomas, periods of study and other qualifications in an open European area for cooperation in educa-

tion.

8. To encourage open and distance learning.

(1) The European Report on the quality of school education was submit-
ted by the Commission to the EU Education Council in June 2000.
Considered to be an instrument to facilitate the evaluation of school
systems, it follows on from the conclusions of the Lisbon European
Council of 23 and 24 March 2000 which had emphasised the neces-
sity of quantitative and qualitative indicators for comparison of best
practices.

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Socrates programme actions

Chapter I — Higher education (Erasmus)

I.1

The promotion of the European dimension in universities

Institutional contracts (organisation of student mobility, mobility of teaching staff, promotion of the ECTS system, joint development of
study programmes, intensive language courses, European modules, short-term intensive education programmes, preparatory visits)
Networks on subjects of mutual interest

I.2

Student mobility grants (*)

Chapter II — School education (Comenius)

II.1

II.2

II.3

Partnerships between schools for European educational projects including exchanges/periods of work experience for teaching staff, study visits and preparatory
visits (*)

Education of the children of migrant workers, as well as children of occupational travellers, travellers and gypsies; intercultural education

Updating and improving the skills of educational staff

II.3.1

II.3.2

Further training projects

Grants to participants (*)

Chapter III — Horizontal measures

III.1

Promotion of language skills in the Community (Lingua)

III.1. A

European cooperation programmes

III.1. B

III.1. C

Further training in the field of the teaching of foreign languages (*)

Assistantships for future language teachers (*)

III.1. D

Development of tools for the teaching of languages and the evaluation of linguistic skills

III.1. E

Joint educational projects for the learning of languages (*)

III.2

Promotion of open and distance learning
European partnerships and partnership projects
Observation projects

III.3

Adult education

III.3.5a

Promotion of awareness and knowledge of Europe and European countries

III.3.5b

Improvement of adult education through European cooperation

III.4

Exchange of information and experience on educational policies and systems

III.4.1

III.4.2

III.4.3

III.4.4

Analysis of questions of common educational policy interest

European information network in the field of education (Eurydice)

Study visits for decision-makers in the educational field (Arion) (*)

National Academic Recognition Information Centres (Naric)

III.5

Complementary measures

III.3.5b

Complementary measures

(*) Decentralised activity.

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Youth for Europe

15. The Decision establishing the Youth for Europe programme
lays down that ‘the Commission and the Member States shall take
the necessary measures to preserve and develop the structures set
up at national level for achieving the objectives of the programme,
for evaluating and monitoring the actions set out in the pro-
gramme and for applying consultation and selection mechanisms’
(Article 5). The form this cooperation was to take and the respec-
tive obligations of the Commission and the Member States were
not laid down, however.

16. The Youth for Europe programme, which has now been
reworked for the third time, has the advantage of linking actions
which were not linked in preceding versions. However, it still con-
tains voluntary service activities which are covered, in parallel, by

the launching of a pilot action and the special European Volun-
tary Service programme. This situation, which presented a risk of
overlap, has been rectified with the new programme.

17. One of the main objectives of the programme was to facili-
tate access to it for disadvantaged young people. An inadequate
definition of this target population and the absence of statistical
data did not permit verification of whether this objective had
been met.

18. Despite the intention shown by the legislator (Article 8 of
the Decision), the arrangements for cooperation between the
Commission and the Member States and the relevant interna-
tional organisations, and the Council of Europe in particular, were
not defined until November 1998, when a cooperation agreement
was concluded with the latter.

Objectives of the Youth for Europe programme

The main objective of the programme is to contribute to the education process of young people by developing exchange activities within the Com-
munity.

Special attention shall be paid to ensuring that disadvantaged young people have access to activities run under the programme. The Commission and
the Member States shall ensure that at least one third of the appropriations made available for intra-Community activities directly involving young
people are used for the benefit of disadvantaged young people.

‘Youth for Europe’ actions

Action A:

Intra-Community activities directly involving young people

Action AI.:

Youth exchanges and mobility (*)

Action AII.:

Spirit of initiative, creativity and solidarity among young people
Action A. II.1: Youth initiatives
Action A. II.2: Periods of voluntary service

Action B:

Youth workers

Action BI.:

Support for Action A (*)

Action BII.:

Support for European cooperation on training youth workers

Action C:

Cooperation between Member States’ structures

Action D:

Exchanges with non-member countries (**)

Action E:

Information for young people and youth research

Action EI.:

Information for young people

Action EII.:

Youth research

Supporting measures
Technical assistance, monitoring and evaluation activities, etc.

(*) Decentralised action.
(**) Decentralised action as from 1998.

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DELAYS AND AMENDMENTS TO IMPLEMENTATION

19. Delays in the adoption of the Decisions establishing the two
Community programmes (March 1995), in the creation of the
Socrates Committee (operational in April 1995), in the drawing
up and submission of the first version of the Vademecum and
Guidelines for Applicants (September 1995), the absence of the
different language versions of the specimen contract between an
NA and school establishments (November 1995), etc. resulted in
postponement of the launch of the two programmes. For the
Socrates programme, the deadlines for the introduction of projects
had to be put back or extended. For Youth for Europe, the delays
in publicising it led to a manifest lack of projects in the initial
phase of implementation.

20. The majority of the actions did not get underway, therefore,
until 1996/1997, but others could not start until even later. For
example, in the case of Erasmus, which finances the European
dimension activities undertaken by the universities, the institu-
tional contracts were not finalised until the 1997/1998 academic
year, i.e. almost three years after the launch of the programme.

21.
In 1999, the management of three actions under the YfE
programme (Action A. II.1: Youth Initiatives; Action C: Coopera-
tion between Member States in the youth field; Action E.1: Infor-
mation for young people), which, until then, had been carried out
by the Commission on a centralised basis, was decentralised. This
considerable change in the implementation of the programme
complicated the already difficult operation of the NAs by substan-
tially increasing their workload without, as a corollary, increasing
the funds at their disposal.

SHORTCOMINGS IN THE MANAGEMENT SYSTEM

General framework of the management system

22. For both programmes there is a fundamental difference
between actions managed directly by the Commission and those

managed through national structures. In the case of the former,
called centralised actions, the management system is based on the
Commission, which relies on a TAO with a staff of 70 for most
of them. The centralised actions account for 29 % of the commit-
ment appropriations for the 1995 to 1999 period (i.e. 287,4 mil-
lion euro) for Socrates, and 28 % (i.e. 37,8 million euro) for YfE.
For the latter, called decentralised actions, the Commission man-
ages operations in collaboration with the NAs, which are appointed
by the Member States and the other countries taking part in the
programme. These decentralised actions account for 704,6 mil-
lion euro (71 %) in the case of Socrates and 96,5 million euro
(72 %) for Youth for Europe.

23.
In spite of the delegation of large areas of responsibility to
the TAO in respect of the management of the centralised actions
(see paragraphs 25 to 36), the final decision to allocate financing
lies with the Commission. In contrast, it is the NAs which grant
financing for the so-called decentralised actions. A number of
actions are subject to a ‘mixed’ system of management with the
NAs managing the application procedures, while the Commission
reserves for itself the decision to grant aid. Two flowcharts illus-
trate these procedures: the first concerns decentralised and the
second centralised actions.

24. For each programme, the Commission receives assistance
from a Committee made up of representatives of each Member
State and chaired by the Commission. While the Socrates Com-
mittee issues an opinion on drafts of the measures required to
implement the programme (annual work programme, selection
of centralised projects, forms of financial support) and is assisted
by two subcommittees which concern themselves more specifi-
cally with questions relating to higher education and school edu-
cation, it turned out that the Youth for Europe Committee, for its
part, has more restricted competence in so far as it is not called
upon to give an opinion on the selection of centralised projects.

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Diagram 1

Simplified flowchart for a decentralised action

National
Agency

Beneficiary/
coordinator

Commission

Signature of the annual
financial agreement
concluded between the
Commission and the NA

NA launches call
for applications

Contribution from
the other
participants in
other countries

Application files
drawn up

C

Eligibility
checks

Selection of
applications/signature
of contracts

Implementation of project

Final report and
accounts of project

C

Checks on
reports and accounts
for individual projects

Final report
under the
agreement

Submission of the final
report to the Commission

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Diagram 2

Simplified flowchart for a centralised action

TAO

Beneficiary

Application files
drawn up

C

Eligibility
checks

Analysis by experts
(‘Grading’)

Commission

Launch of call
for applications

Decision by the
Commission

Signature
of contract

Implementation
of project

Final report and
accounts of project

C

Checks on
reports and
accounts for the
individual projects

Submission of the TAO’s
opinion to the Commission
before payment

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Centralised management

Loss of control in the delegation of management to a TAO

25. A certain degree of outsourcing presupposes an adequate
legal framework, a clear definition of the mandate and the tasks
to be delegated, and efficient supervision of the control systems
to be applied to the activity. This was not the case for the imple-
mentation of these two programmes. Some of the criticisms below
have already been the subject of Court observations in Special
Report No 1/96 concerning the MED (1) programmes. In spite of
the replies given by the Commission to that report, it is regret-
table that the Commission did not undertake the reform of its
outsourcing procedures before 2001.

30. On top of this, a management system of this kind has the
unusual characteristic of concentrating, in the hands of those in
charge of the TAO, prerogatives which are at one and the same
time those of an authorising officer and those of an accounting
officer, without the Commission being in a position to ensure
that the two functions are separate, in accordance with this fun-
damental principle of public-sector accounting, as laid down in
the Treaty establishing the European Community (Article 279)
and in the Financial Regulation (Article 21). It also creates a func-
tional hierarchy between the duties of the Authorising Officer and
the Accounting Officer which obstructs compliance with this
principle, as the managing departments are able to issue instruc-
tions to the TAO concerning the handling of the funds. Thus, for
the 1995 to 1999 period, the TAO administered 272,84 million
euro for direct actions on the Commission’s behalf.

No legal base for one delegation

The delegation gives rise to confusion of interests

26. Neither of the two basic Decisions governing the Socrates
and Youth for Europe programmes provided for the delegation of
management and, in addition, the Commission did not take a
decision of principle in this respect. Under these circumstances,
the conditions reiterated by the Court of Justice in its Meroni judg-
ment (2), calling for a precise definition of the extent and scope of
the competence delegated to a third party, have not been fulfilled.

27.
In fact, it was not just simple technical assistance tasks that
the Commission entrusted to the TAO, it also delegated respon-
sibilities associated with its public service mandate. Incidentally,
although the Advisory Committee on Procurements and Con-
tracts (3) (ACPC) drew the Authorising Officer’s attention to this
point, it nevertheless delivered a favourable opinion on the opera-
tion.

28.
It appears from the Court’s audits that the Commission left
it to the TAO to check, in its stead, on the services rendered and
the settlement of payments. These two responsibilities are duties
of the Authorising Officer.

29. Furthermore, by entrusting to a legal person under private
law (non-profit association) the holding and handling of Commu-
nity public funds and the responsibility of discharging the Com-
mission of its obligations towards its creditors by making final
payment on behalf of the Commission, the Commission delegated
the responsibilities of the Community Accounting Officer, as laid
down in the Financial Regulation (Articles 51 and 54). From a
legal point of view, these responsibilities are, without any doubt,
part of the exercise of a public service mandate. As a consequence,
their delegation to an association is irregular as, under Commu-
nity law, there would effectively be no legal basis for management
of the funds.

(1) OJ C 240, 19.8.1996.
(2)

Judgment of the Court of 13 June 1958. Meroni & Co, Industrie Met-
allurgiche, SAS v High Authority of the European Coal and Steel
Community, Case 10/56.

(3) Favourable Opinion No 165/95 by the ACPC of 31 March 1995.

31. The TAO’s two founding associations represent university
organisations which have a direct interest in benefiting from the
financing granted within the framework of the Socrates pro-
gramme. The Court’s audits showed that, in fact, these two bod-
ies received aid directly for Erasmus measures and, indirectly, as
partners in five projects to a total of 71 000 euro (4).

32. More generally, these two associations represent a dozen
organisations including four which also act as national agencies.
One of them even seconded a member of its staff to the TAO to
take up a position of responsibility.

The act of delegation generates risks

33. The funds paid by the Commission into the bank accounts
opened in the TAO’s name remain the property of the Commu-
nity until they are paid to the final beneficiary. However, it was
discovered that for the financial years 1996 and 1997 these
amounts appeared incorrectly on the assets side of the associa-
tion’s balance sheet. This represents a considerable risk for the
Community funds should the ASBL fail. Corrective measures
should therefore be taken so that these amounts appear in the
balance sheet as what they are, i.e. funds managed on behalf of
third parties.

34.
Interest yielded by the sums deposited on these TAO accounts
is likewise the property of the Community. As at 31 December
1998, it amounted to 563 622 euro. The Commission did not

(4) The two founding organisations of the Etape consortium benefited
from subsidies for additional Erasmus measures. The first received
10 000 euro in its capacity as project coordinator in 1996 and was
partner in six projects submitted by other promoters for programme
funding, including four which were projects concerning a strand of
the programme managed directly by DG EAC. For the two other
projects, relating to a strand where the TAO assisted the Commission
with the management, the aid was 14 000 euro in one case and
approximately 11 000 euro in the other. The second organisation
received 35 815 euro for two projects in 1999.

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apply the contractual arrangements which provide for transfer of
the interest to the Commission, at its request, on a six-monthly
basis.

35. An amount of 6,2 million euro, the entire balance of the
funds to be paid to the projects selected within the framework of
the previous programmes, was transferred in June 1995 to accounts
opened in the TAO’s name and was still there in 1999. The Com-
mission could not justify having left more than six million euro
in the TAO’s coffers for four years, and then, after the Court’s
audit, having been able to finance such old projects with this
amount. This situation has distorted the Commission’s revenue
and expenditure accounts since 1995 and is a questionable way
of managing the Community’s funds.

A costly delegation

36. The contractual relationship was based on the principle of
reimbursing to the TAO, by way of imprest accounts, the funds
utilised by the TAO to provide its assistance. There were no
requirements to ensure an efficient cost/effectiveness ratio. Such
requirements should have appeared in the contracts. Thus the
Commission was to reimburse the costs directly linked to carry-
ing out the contract and actually incurred, up to fixed maximum
limits. The Commission financed these costs to an amount of
46,46 million euro for
the period from 1 June 1995 to
31 July 2001 (1). This amount also covered the provisions con-
cerning the management of the centralised actions in the new
programmes.

Incompatible obligations

37. The examination showed that the final accounts for the first
agreements concluded with the TAO included charges (764 000
euro for the third year of the contract) for services provided but
not yet invoiced. The Commission’s view was that it could accept
responsibility for these transactions in year N knowing that they
would not actually be settled by the TAO until year N + 1 in the
following three instances:

(a) goods or services are supplied during the contract year, but

the invoice is not received by the year-end;

(b) advance invoice received from a supplier on the basis of a
contract concluded during the contract year for a service to
be provided the following year;

(c) order placed before the end of the contract year.

(1) The financing of the TAO was set as follows for the contract period:

1.6.1995 — 31.5.1996: 9,310 million euro,
1.6.1996 — 31.5.1997: 8,175 million euro,
1.6.1997 — 31.5.1998: 7,420 million euro,
1.6.1998 — 31.5.1999: 6,070 million euro,
1.6.1999 — 30.11.2000: 8,710 million euro,
1.12.2000 — 31.7.2001: 6,778 million euro.
Total: 46,463 million euro.

In the Court’s view the TAO is bound by the accounting
38.
rules applicable to corporate bodies under private law to enter the
amounts corresponding to these transactions on the liabilities
side of its balance sheet, but the Court must emphasise that the
Commission cannot settle the amounts in question. Such practice
is, in fact, contrary to the principle of the annuality of the budget
and to the obligation imposed on the authorising officer by the
Financial Regulation, namely, to verify the existence of the service
rendered and the correctness of the payment before payment is
made.

Decentralised management

The national agencies

Discrepancy between resources and tasks

39. The NAs play a key role in the system of implementation of
the Community programmes. They are at the interface between
the strategic guidelines of the Community programmes and
national education and youth policies. In the field of the decen-
tralised actions, their task is to examine applications and select
projects, to award grants and carry out controls on them, to
monitor transactions and the soundness of the financial manage-
ment, to distribute information and to act in an advisory capacity
to the relevant national structures and the beneficiaries.

40.
It is for the Commission, as the body responsible for the
implementation of the programmes, to fix the guidelines, to make
its financial contribution and to lay down the overall framework
for the actions. However, the operational organisation of the NAs
is the responsibility of the national supervisory authorities, in
particular with regard to the provision of the material and human
resources required to carry out the tasks described above.

41. The Court’s audits revealed that, in this respect, the situation
differs from country to country and sometimes there are differ-
ences between the NAs for the Socrates programme within the
same Member State. This compounds the lack of homogeneity
criticised in the section on the design of the programme, with a
lack of homogeneity in its implementation, which thus makes the
programme even less transparent at national level.

42. The NAs’ management is also characterised by a lack of
transparency in respect of the management procedures, in the
project selection phase in particular, because there are no alloca-
tion criteria.

43.
In addition, the NAs were too often faced with shortages of
funds and were not able to carry out their verification tasks prior
to the close of the projects in an adequate manner.

44. Within the framework of the Youth for Europe programme,
the Commission granted an annual subsidy to the NAs, as a con-
tribution to their operating costs, on the basis of a variable rate

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of financing (between 32 % and 45 % of the budget allocated)
without carrying out adequate checks to ensure that efficient
management structures and procedures had been put in place.

In practice the situation of dependence in which the NAs
45.
find themselves, as regards their national supervisory authorities,
substantially restricts the action that the Commission can under-
take to obtain application of the principles set out in the Com-
munity base Decisions, short of introducing coercive mecha-
nisms.

Management of the financial framework agreements

46. Examination of more than 300 financial framework agree-
ments concluded between the Commission and seven Member
States to finance the actions managed by the NAs between 1995
and 1999 revealed shortcomings of various kinds at various stages
of management. These shortcomings concerned, in particular, the
legal status of the agreements, the accumulation of administra-
tive delays which jeopardise the very principle of prefinancing,
and the problems caused by the allocation of Community aid to
national public structures.

Management system out of phase

47. Of the agreements concluded between the NAs and the
Commission, those audited by the Court had often been signed
after the date on which the actions were due to be launched and
often after a delay of several months. In some cases the signing
coincided with the end of the period in which the actions were
intended to be carried out. By force of circumstance, these delays
caused additional delays in the subsequent conclusion of con-
tracts between the NAs and the project initiators and the payment
of advances to the latter.

48. These accumulated delays sometimes gave the lie to a pro-
gramme logic that relied on the principle of prefinancing. In real-
ity, there were occasions, in the case of some actions and very
often in the case of Comenius, when payments that had already
been made were refunded. This reversal of logic placed the ben-
eficiaries in a difficult situation and led to withdrawals on a scale
which cannot be quantified in the absence of available figures. In
order to keep this phenomenon within limits, the NAs were
sometimes led to conclude contracts with the beneficiaries before
having signed the financial framework agreement with the Com-
mission.

49. The mid-term reports and the final reports and final finan-
cial accounts relating to the framework agreements were for-
warded to the Commission in the majority of cases after the dead-
lines laid down, a consequence of the delays mentioned above, to
which must be added those resulting from the late forwarding of
the final accounts by the project beneficiaries. This accumulation
of delays explains why numerous financial framework agreements
were not closed or regularised for months or even years after their
expiry dates. The Commission did not take appropriate coercive
measures to rectify this situation.

Repeated cases of ineligible administrative expenditure

50.
In the context of the Youth for Europe programme, Com-
munity financing is given for the NAs’ administrative costs on the
basis of annual financial agreements. The audit revealed the exist-
ence of practices which contravene the budgetary principle of
specification of appropriations. For example, some of the costs
paid constituted expenditure which was already covered by the
national budgets and which, moreover, in no way constituted
additional expenditure for the Member States. In this case, it con-
cerned the financing of civil servants’ salaries or rental costs,
expenditure which, in the past, the Commission itself has consid-
ered to be ineligible, following similar criticisms by the Court.
This being the case, the only expenditure that can be eligible is
that constituted by the NA’s direct costs (duty travel, meetings,
general expenses,
information/publication, communications,
equipment).

IT systems

51. The Commission developed various IT systems (amongst
others, Soclink for Socrates, Youthlink for Youth for Europe) to
record and exploit statistical and financial data on the programme
projects. For all that, it proved to be difficult to get the NAs to
adopt them. The NAs maintained that the computer applications
were tedious, complicated or unsuitable for their requirements.
Some refused to use them, which led to delays, sometimes con-
siderable ones, in the transmission of information between the
NAs themselves and between the latter and the Commission. This
being the case, the smooth operation of the NA/Commission net-
works has not been assured.

WEAKNESSES IN THE IMPLEMENTATION OF THE ACTIONS
AND THE MANAGEMENT OF THE PROJECTS

52. The audit of 27 NAs allowed considerable shortcomings to
be identified in the management of the operations, from the selec-
tion of projects to the monitoring of their execution. Likewise, in
the case of the TAO, the tests highlighted weaknesses in the con-
trol system. These deficiencies also have their roots, to some
extent, in the sheer volume of transactions and operations to be
managed for the two programmes and the great diversity of man-
agement systems employed for the actions as a whole.

Shortcomings in the management of the decentralised actions
and projects

Problems in connection with management by the national
agencies

Selection of projects

53. With regard to the NAs’ selection mechanisms, the level of
to guarantee
formalisation of procedures

insufficient

is

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objectivity and equality of treatment for all candidates and to
assure transparency of operations. Thus the managing bodies
often had no ex ante evaluation grids or evaluation sheets for anal-
ysing applications. Sometimes even project selection was carried
out, in the main, by NA staff without setting up a selection com-
mittee. In one case, the composition of the selection committee
did not offer adequate guarantees of independence and impartial-
ity.

Processing the files

54. Apart from the differences in filing systems from one NA to
another, the filing in general suffered from a lack of rigour as
regards classification and an absence of methodology for process-
ing the information.

Monitoring and control of projects

55. With regard to the examination of the final reports on the
projects, the managing bodies no longer use checklists which
might improve the quality and speed of the controls required by
sound management. Moreover, the scope of the checks carried
out on the financial accounts submitted by the project beneficia-
ries is limited. The beneficiaries are not in fact required to attach
supporting documents to the declarations of expenditure which
they forward. In addition, the letter of engagement between the
NA and the beneficiaries, which serves as a contract, contains no
clause providing for on-the-spot checks. The most obvious con-
sequence of these weaknesses was that many beneficiaries found
themselves unable to justify their costs in their entirety when they
were called upon to provide proof of expenditure and, at the same
time, the NAs, like the Commission, were unable to verify the jus-
tification for the amounts they were asked to pay.

56. Since the Commission did not prescribe any criterion for
assessing the value of projects, the NAs had no control basis. Ex
post evaluations of the actions at national level would neverthe-
less be of invaluable aid to the Commission in assessing the over-
all impact of the programmes. Exceptionally, one group of NAs,
on its own initiative, undertook to evaluate the results of one spe-
cific action (1) under the Socrates programme.

(1) A collective effort to carry out evaluation was made by an NA group
in order to evaluate the experiences made with the Lingua Action
(total cost of the Babel project: 179 080 euro with Community par-
ticipation of 88 905 euro). This project suffered certain delays but, in
view of the interest it subsequently aroused on the part of all NAs, it
gave rise to a second contract (cost: 111 620 euro with a Community
participation of 27 350 euro) resulting in the creation of a website on
the evaluation of Lingua E projects, available since 20 May 2000.

Individual deficiencies found in the audited actions

Socrates/Erasmus: Action 2

57. The aim of Action 2 of Erasmus is to encourage student
mobility by financing Erasmus grants intended to partially offset
the expenses incurred. As the Commission restricted itself to set-
ting out guidelines and setting thresholds for deciding the amount
of these grants, the NAs and the universities adopted different
management approaches, which resulted in the granting of very
different amounts not only between one country and another but
also between universities in the same Member State.

58. The amounts of the mobility grants are set by the NAs in
compliance with a minimum threshold decided by the Commis-
sion. These amounts vary considerably from one country to
another, even from one region to another, depending on a num-
ber of parameters. Some NAs set a uniform amount across the
country, others, in contrast, lay down a range of amounts. On
occasion the national co-financing was not forthcoming. In
another case, Community co-financing was reserved for public
establishments only.

59. Where Erasmus grants are the only public aid, opportuni-
ties for mobility are biased in favour of well-off students who can
rely on additional family support. In this respect the audit can
only confirm the findings of the socioeconomic inquiry on Eras-
mus students, which was submitted on 18 January 2000 by the
Commission, following a request by the European Parliament, and
which underlined, in particular, problems of a structural nature in
connection with national policies which discriminate against
socially and culturally less-favoured groups (2).

of

the

Erasmus mobility

60. The NAs do not have the necessary data and tools to ensure,
in accordance with the general conditions relating to the alloca-
tion
compatibility/
complementarity of Erasmus support with national and/or regional
public aid. Neither are they equipped with databases for the detec-
tion of possible cases of ineligibility (first-year students, limita-
tion of the number of grants for each destination to sixty-month
students, second grant, etc.).

grants,

61. The payment of the advances by the NAs to the universities
varies from one national system to another within a range between
50 % and 80 % of the amount of aid allocated to the latter. In one
Member State, the universities receive the financial allocation fixed
according to mobility forecasts, not by instalment (system of
advances) but by means of a single allocation contract which is
paid to them in its entirety.

(2) The audit consisted of the examination of 46 contracts concluded
between the NAs and higher education establishments, of which six
were the subject of on-the-spot checks. The Erasmus grants lay within
a range from less than 100 euro to 400 euro per month.

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62. Student mobility is systematically overestimated by the uni-
versities, sometimes on a substantial scale. Often it is less than
half of the mobility initially predicted. These poor percentages in
terms of actual mobility led the educational establishments to pay
grants which were considerably higher than predicted. This prac-
tice of the universities, which amounts to using overestimates of
mobility flows to increase the amount of the grants allocated to
students, is inadmissible. Ultimately it favours students from estab-
lishments whose projections are the least sound, to the detriment
of the others. As part of Socrates II the Commission has imple-
mented a new system which will take past performance into
account and should offer a solution to this problem.

Socrates/Comenius: Action 1

63. The Comenius Action 1 strand of the Socrates programme
aims to promote cooperation between school education establish-
ments, in particular within the framework of European educa-
tional projects, by means of small grants (3 000 euro for the coord-
inator and 2 000 euro to each partner establishment). These
activities, which aim to contribute to a better understanding of
cultures are also intended to foster the improvement of beneficiar-
ies’ language skills. In this respect, it reinforces the Lingua E strand
of the programme.

64. The start-up of this action proved particularly difficult because
the number of applications was insufficient to absorb the budget.
This situation led to projects being accepted even though the
quality was poor and to extension of the periods of eligibility
which involved a risk of overlaps between financial framework
agreements.

65. Weaknesses revealed in the management of the action
included: serious shortcomings in the keeping of files by the NAs,
advance payments which were in excess of those authorised by
the agreements, unjustified overruns of the rates of Community
financing and accounts which were not based on actual costs or
contained ineligible expenditure (1).

Socrates/Lingua: Action E

66. The objective of the Lingua E Action is to encourage young
people to communicate in foreign languages, through joint edu-
cational projects (JEPs). Of necessity, the implementation of a JEP
presupposes that learning the working language is part of the cur-
riculum of the partner school. The audits showed that out of 29
projects examined English was used as the working language in
15 cases.

67. The compulsory minimum duration of 14 days per exchange
and the substantial costs entailed by stays of this length imposed
constraints on the project organisers, particularly when looking

for partners. The audit highlighted occasional shortcomings at
various stages of management. In this respect, it should be empha-
sised that one NA set the rate of aid at 75 % of the total cost for
all projects, whereas this rate may only be applied in exceptional
cases (young handicapped persons, economically weak persons
where justified) (2).

Youth for Europe: Action A1

68. The objective of Action A1 of Youth for Europe is to encour-
age better understanding of the diversity of European society and
to develop active citizenship. It supports projects concerning
exchanges based on intercultural learning where the young people
themselves are called upon to play an active role in all phases of
management. These projects are subsidised by the Community at
a rate of 50 % of the total expenditure incurred. This rate may,
exceptionally, be increased for disadvantaged young people
involved in a project which gives them access to international
exchanges.

69. The audit highlighted a lack of rigour in the selection of
projects. For example, organisations in which the young people
do not play an active role received funds. In some cases it was dif-
ficult to reconcile the nature of the activities with the programme
objectives.

70. Multilateral projects are more costly than bilateral projects
and are not suitable for disadvantaged young people who clearly
do not have the means to participate in projects of this type. As
regards the projects of this type at the time of the on-the-spot
audits, the NAs were not in a position to provide statistics on the
actions financed for the benefit of this target group.

71. As the agreements concluded between the Commission and
the NAs do not stipulate that the final beneficiaries should submit
supporting documents with their declarations of expenditure, the
NAs, for the most part, did no more than only examine the finan-
cial accounts without setting up a system of controls which would
allow them to verify the reality of the costs declared. One of the
few NAs which demanded documentary evidence of expenditure
found it was difficult, even impossible, to establish a connection
between the statements of account forwarded by the beneficiaries
and the documents which were supposed to provide the justifica-
tion for them. It was also confronted with the inability to evalu-
ate contributions in kind charged to the projects. Accepting such
contributions opens the door to every kind of abuse. In actual
fact, short of carrying out an on-the-spot check, the reality and
accuracy of these contributions cannot be evaluated. As the audit
demonstrated, associations can make a profit from Community
funds in this way, which is not permitted.

(1) The examination concerned 46 contracts and was supplemented by

(2) The audit entailed examination of 35 JEP contracts and included 14

on-the-spot visits to 12 beneficiaries.

on-the-spot checks.

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72. The audit also revealed excessive resorting to declarations of
honour and other self-attestations, a practice which must be con-
demned. Even when taking into account the very informal nature
of the sector and youth organisations’ lack of financial means, the
use of such declarations to justify as much as 79,50 % of the total
of the final accounts cannot be accepted.

framework of the two programmes. In order to be able to comply
with the strict deadlines demanded for the selection of the projects,
the TAO was forced to increase the number of staff assigned to
this task with staff normally assigned to the management of con-
tracts, which caused the delays noted in the management and clo-
sure of the projects.

73. A number of other weaknesses and irregularities were identi-
fied during the audits:

(a) payment of the entire aid to the beneficiaries before a start
had been made on implementation, instead of payment of an
advance;

76. Although the TAO defined and documented the manage-
ment procedures for the various phases of work in the form of an
‘integrated operational chain’, changes to the grading during evalu-
ation of the projects were not always documented in the informa-
tion systems.

(b) absence of confirmation to the NAs by the partner organisa-
tions of their formal agreement and failure to forward lists of
participants in exchanges;

Inadequate controls

(c) non-application of a proportional reduction in the aid in cases
where theduration of the exchange and the number of par-
ticipants had been reduced;

(d) exceeding the rates of formally authorised financing.

74. These deficiencies are caused by inappropriate management
and controls. The importance of adequate controls is underlined
by the fact that, notwithstanding the limited number of measures
examined by the Court, three suspected cases of fraud were iden-
tified during checks. OLAF was informed.

77. The controls carried out by the TAO on the final reports
could only verify the plausibility and formal accuracy of the dec-
larations of expenditure. A sample of only 5 % of the final reports
was subjected to checks on supporting documents. The on-site
visits which the TAO carries out periodically do not have the
character of an audit and therefore cannot make up for this defi-
ciency. These weaknesses were also highlighted by the audit unit
of DG EAC (see paragraph 88).

Individual deficiencies found in the audited actions

Shortcomings in the management of the centralised actions
and projects

Socrates/Erasmus: Action 1: Institutional contracts

Problems associated with a TAO’s management

75. The audit highlighted the constraints which recourse to tech-
nical assistance can entail and demonstrated the objective diffi-
culty for the DG and for the TAO itself of implementing actions
and monitoring projects. The combination of a continuous increase
in the volume of work and a constant reduction in the resources
at its disposal (1) resulted in substantial constraints for the TAO
which led it to subcontract some of the tasks entrusted to it. In
addition, the TAO was not in a position, either, to produce sum-
mary reports on the projects and the actions financed within the

(1) The financing of the TAO was set as follows for the contract period:

1.6.1995 — 31.5.1996: 9,310 million euro,
1.6.1996 — 31.5.1997: 8,175 million euro,
1.6.1997 — 31.5.1998: 7,420 million euro,
1.6.1998 — 31.5.1999: 6,070 million euro,
1.6.1999 — 30.11.2000: 8,710 million euro,
1.12.2000 — 31.7.2001: 6,778 million euro.
Total: 46,463 million euro.

78. The initial delay which marked the implementation of the
ICs (see paragraph 20) was compounded by delays caused by the
weaknesses of the universities’ organisation and the reluctance of
the teachers to lose management prerogatives which they held
under the previous programme in favour of senior management.
In addition, the eligibility criteria and the rules for the applica-
tion of sanctions relating to the ICs concluded in 1996 for the
first year of application (academic year 1997 to 1998) were not
defined by the Commission until 1999. The closure of these con-
tracts was thus delayed.

79. An analysis of the final reports shows that the results were
considerably below the contractual commitments, in particular
with regard to the actions relating to student mobility and teach-
ing staff. Paradoxically, this did not lead to a reduction in the
amount of aid but, on the contrary, led in some cases to the initial
Community aid being exceeded, even doubled. This situation can
be explained by the possibility given to the universities to redis-
tribute the funds from one activity to another by up to 50 % of
the amount allocated.

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7.6.2002

Socrates/Open and distance learning (ODL)

80. The objective of ODL is to improve the provision of educa-
tion by using new technologies in all educational processes. In
spite of the multiannual character of the projects, Community
financing is only granted in annual instalments. These projects
group together a minimum of three organisations from at least
three different countries.

81. A design of this kind complicates the management in so far
as the development of the project requires the procedures to be
repeated annually (application, evaluation, contract, final accounts)
and creates a potential risk of premature closure of the file. In
addition, this kind of management makes it difficult to allocate
expenditure which spans two financial years.

82. With this type of action the project coordinators do not con-
trol expenditure declared by partners who forward to them nei-
ther the documents supporting expenditure nor, in certain cases,
the declarations of expenditure. A situation of this kind tends to
favour undue payments.

83. Contracts were signed with the project initiators and advances
were paid to the final beneficiaries only after the projects had
been carried out. The TAO’s examination phase proved to be
excessively long (between eight and 19 months for the projects
examined) delaying by the same amount of time the confirma-
tion of the results of the evaluation and the closure and regulari-
sation of the projects. In five of the 13 files checked, the maxi-
mum amount of Community aid exceeded the permitted threshold
of 50 % of the costs without any justification for the financing,
either with regard to the profile of the participants or the special
nature of the activities (1).

the NAs, the TAO and on the premises of the final beneficiaries.
In contrast, it did not examine the management systems and pro-
cedures applied within the DG. Its annual audit programme was
not drawn up on the basis of a risk analysis. In addition, the dif-
ficulties of filling vacant posts meant that it could not deal with
an ever-growing volume of work.

86. Thus, in the case of decentralised actions, the unit did not
succeed in auditing each NA once every two years as it had
intended. Its missions often took place after considerable delay in
terms of the periods covered by the framework agreements and
some subsidies, such as those for operating expenditure, were
excluded from its field of audit.

87.
In addition, the lack of follow-up given to the observations
of this Unit’s auditors by the DG and the absence of a formalised
procedure for dealing with them represent a major failing in the
control system. The audit reports were not forwarded to the
national authorities and the letters of recommendation were only
forwarded on rare occasions. For this reason the management
deficiencies have persisted.

88. According to the Commission, the Audit Unit examined a
random sample of 10 % of the projects managed by the TAO. At
the end of these audits the internal auditors drew attention to a
lack of rigour in the TAO’s management as evidenced by:

(a) the limited nature of checks on the supporting documents;

(b) deficiencies in the evaluation;

(c) non-respect of the principle of co-financing;

(d) signature of supplements to contracts by the TAO without

prior approval by the DG; and

Youth for Europe: Action D

(e) delays in the processing of files.

84. Action D of Youth for Europe finances cooperation between
eligible third countries in the field of exchanges for young people.
The clumsiness and slowness of the decision-making and finan-
cial circuits (the NAs are responsible for preselection of the projects
and the Commission takes the final decision by selection panels)
led to delays in the conclusion of contracts.

THE COMMISSION’S AUDITS

85. The Internal Audit Unit of DG EAC (2), whose powers have
not been defined, concentrated its efforts on on-the-spot audits in

(1) At the TAO the audit covered 13 contracts.
(2)

In 1995 the internal audit function was attached to the former DG
XXII, Financial Unit, and with effect from 1 October 1999, following
structural reorganisation, was incorporated into the Audit and Evalu-
ation Unit of DG EAC. Although the name ‘Audit Unit’ was subse-
quently changed, the expression has been retained in this report.

89. The DG was slow to take, in good time, the corrective mea-
sures which were necessary to enable the TAO to respond satis-
factorily and to fulfil the requirements relating to the sound man-
agement of Community funds.

90. The Commission’s Financial Control DG carried out an
in-depth audit, at the same time as the Court, of the TAO’s admin-
istrative expenditure. Its work led to the same findings as those
noted by the Court, in particular with regard to the risk of confu-
sion of interest.

EVALUATION OF THE PROGRAMMES

91. According to Decision No 819/95/EC of the European Parlia-
ment and of the Council of 14 March 1995, the Commission, in
partnership with the Member States, was to ensure the regular

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C 136/19

monitoring and evaluation of the Socrates programme. It was
supposed, not later than 30 September 1998, to submit a mid-
term report on the launch phase, and not later than 30 Septem-
ber 2000, a final report on the implementation of the programme.
However, the Commission only published the mid-term report (1)
on 12 February 1999, on the basis of an external evaluation com-
pleted in June 1998, and the final report was only published on
12 February 2001 (2), following an external evaluation. It should
be recalled at this point that, in spite of growing popularity, the
objective initially set for Erasmus, which was to permit 10 % of
the 11 million students immatriculated at universities to be able
to study abroad, has not been achieved. In its final report, the
Commission estimated that only some 460 000 students took
advantage of this programme during the 1995 to 1999 period.
Table 6 shows the distribution by country of origin of the num-
bers of students who received grants.

92. According to Decision No 818/95/EC of the European Par-
liament and of the Council of 14 March 1995, the Commission
was to take the necessary measures to ensure the monitoring and
continuous evaluation of the Youth for Europe programme. Dur-
ing the third year of the programme, the Commission was to
present an evaluation report covering the first two years of pro-
gramme implementation, which was to serve to redefine and pos-
sibly adjust the guidelines for the programme. This report was not
published until 6 February 1998 (3) following an external evalu-
ation, the report on which was drawn up in November 1997. In
contrast with the Socrates Decision, the Youth for Europe Deci-
sion does not require the Commission to submit a final report at
the end of the programme.

Results of the Court’s audit

93. Although it could be concluded from the existing reports
that an increasing number of beneficiaries participated in both
programmes and that the Socrates measures were crucial for ini-
tiating and promoting the transnational cooperation between
training institutions, the audit revealed weaknesses in the evalu-
ation procedures and questions arose as to the validity of some
evaluation results.

94. The lack of clear parameters or other performance indica-
tors, an imprecise definition of the targeted population (Youth for
Europe) and an absence of reliable and permanently updated sta-
tistical data on the final beneficiaries all impose significant con-
straints on the quantitative assessment of the achievement of
objectives for both programmes.

95. Both types of evaluation report (mid-term and final) have in
the first instance the purpose of monitoring the execution of the
programmes and taking any necessary remedial action and in the
second instance the purpose of having an impact on the design
of the subsequent programme. For Socrates, as well as for Youth
for Europe, both targets failed due to the late production of the
evaluation reports.

(1) COM(1999) 60 final.
(2) COM(2001) 75 final.
(3) COM(1998) 52 final.

96. The ex ante evaluations of the Youth for Europe and Socrates
programmes (2000 to 2005) were established before the finalisa-
tion of the mid-term evaluations of the 1995 to 1999 programmes.

97.
In the case of Youth for Europe it was noted that the external
mid-term review was performed by a consulting company owned
by a former director of the TAO managing this programme.

98. The Commission awarded, from the beginning of the Eras-
mus action and Socrates programme, numerous studies to exter-
nal consultants. No evidence could be found that all of these stud-
ies were adequately exploited by the Commission or gave an
essential added value. The audit of these contracts revealed that
one university had a preferential position in this field (approxi-
mately a dozen contracts with a total EU contribution of more
than one million euro). This contractor also carried out another
study contract for other Commission services in a similar area
which was of a comparable nature (empirical socioeconomic
inquiries). Two of these contracts are being investigated by OLAF.

99. As regards the Commission’s management of these con-
tracts, the audit revealed serious deficiencies at all levels, i.e.
awarding the contract, lack of cost assessment of the offers, incor-
rect handling of the contract, insufficient monitoring of its imple-
mentation, lack of assessment of the validity and completeness of
the outcome of the contracted works, non-respect of contractual
clauses and absence of verification of expenditure.

100. The audit at the main contractor of the Socrates-related
studies revealed irregularities on various levels, for example fre-
quent subcontracting without prior authorisation, incorrect cost
declarations leading to the reimbursement of unjustified expen-
diture, unilateral changes of the contractually agreed work items,
incorrect statements in the mid-term reports, publication of EU
financed studies without prior approval by the Commission, a
chronicled non-respect of contractually agreed time limits and an
ignorance of other contractual clauses.

101.
It was noted that huge amounts of empirical results and
data, despite being the property of the Commission, were kept by
the contractor and were exploited for further own studies. The
Commission omitted to save these data.

102. The audit revealed furthermore that the final evaluation
report for Socrates, which was accepted by the Commission, did
not deal in depth with the assessment of the Socrates manage-
ment procedures (although this was foreseen in the contract). No
evidence could be found that the statistical data of this analysis
were representative, nor how the sample was drawn. Given the
cumbersome and expensive way of collecting the data (by mail)
from the beneficiaries, the efficiency of this approach can also be
questioned.

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New programmes (2000 to 2006)

103. The new programmes continue the main actions of the
previous programmes while introducing changes to their content.
For instance, within the framework of the Socrates programme,
Comenius will be reinforced and will benefit from a substantial
increase in budgetary appropriations (27 % of the 1 850 million
euro). As for Youth for Europe, it is taking over the European Vol-
untary Service programme.

104.
In addition, these new programmes incorporate new fea-
tures of various types such as an improved definition of the objec-
tives of Youth for Europe, giving Turkey access to participation
and regrouping former actions under two new names, Grundtvig
and Minerva. The former covers actions in the field of adult edu-
cation and other educational pathways and the second those in
the field of open and distance learning, information and commu-
nications technologies in the field of education. Grundtvig has
received a substantial increase in appropriations and accounts for
7 % of the 1 850 million euro allocated to Socrates.

105. The changes introduced for the latter programme are accom-
panied by a reform of the method of distributing the overall bud-
get between the Member States for the actions managed in coop-
eration with the NAs, and the maximum rate of Community
cofinancing for the projects has been raised to 75 %. In contrast,
the new decisions, just like the old ones, provide no precise infor-
mation or instructions on quantification of the objectives laid
down.

CONCLUSIONS

106. The programmes have had an undeniable impact on young
people and the student population. The Court’s audit neverthe-
less revealed numerous deficiencies both in the design and in the
management systems of both the Socrates and Youth for Europe
Community programmes and in the implementation of the actions
and projects specifically targeted by the inquiry (paragraphs 10 to
18).

109. Cumbersome and complex administrative and financial
procedures led to delays at every stage of management. The main
consequence of this accumulation of delays was excessively long
delays in paying aid and difficulties during closure of financial
agreements concluded between the Commission and the NAs
(paragraphs 39 to 51).

110. The effects of these deficiencies were aggravated by inad-
equate management systems and structures and by the inadequacy
of the funds allocated with regard to the ambitions formulated for
the programmes, in respect of the implementation of both the
decentralised and the centralised actions (paragraphs 53 to 84).

111. The lack of a genuine audit culture on the part of the
national and Community managing bodies was the source of
many of
the shortcomings and irregularities found (para-
graphs 85 to 90).

112. The evaluation reports were produced at too late a stage to
have an impact on the implementation phase or on the subse-
quent programming. The availability of representative and per-
manent updated statistical data was non-existent and the manage-
ment of external contracts by the Commission showed significant
weaknesses (paragraphs 91 to 102).

RECOMMENDATIONS

113.
In view of the fact that the deficiencies in the TAOs’ man-
agement continue to recur, the Court can only encourage the
Commission to pursue the efforts it has made to set up Commu-
nity public-law agencies, which would be entrusted with the
implementation of the programmes.

114.
In view of the probability of increased decentralisation in
future, the contractual relationship between the Commission and
the national authorities should be clearly defined, setting out pre-
cisely, for each party, the obligations and responsibilities for secur-
ing efficient joint management in the interest of sound manage-
ment of Community funds.

107. The cause of these deficiencies lies in the excessive number
of objectives and in the fact that they are too vaguely defined, par-
ticularly in the case of Socrates, which makes an ex post evalua-
tion of the programmes’ impact difficult. This evaluation is made
all the more difficult by the fact that neither precise indicators nor
evaluation methods were laid down (paragraph 11).

115. The managing Directorate-General should keep proper
administrative accounts of commitment proposals and payment
orders issued and regularly reconcile them with the Sincom data
in order to identify any discrepancies and to carry out the neces-
sary regularisation.

108. The delegation of public-sector powers to the TAO in the
absence of a legal base, the cost of the services rendered, the risks
of confusion of interests inherent in a structure where the manag-
ers are drawn from the ranks of those who benefit from the pro-
grammes (notwithstanding the personal qualities of the manag-
ers) and the entering in the balance sheet of assets which actually
belong to the European Community are features that the Court
has been encountering for years in various Community pro-
grammes (paragraphs 25 to 38).

116. The national authorities should be provided with sufficient
human, material and financial resources to permit them to per-
form effectively the important task assigned to them.

117. The Commission, together with the relevant national
authorities, should define the tasks and practical administrative
arrangements (criteria, models, manuals, etc.) relating to all aspects
of the NAs’ management.

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118. Rules should be laid down to ensure efficient controls of
the final financial accounts for the projects (nature and type of
supporting documents, analysis of financial statements with the
help of evaluation grids, etc.). The rules should be accompanied
by an obligation for the NAs to carry out on-the-spot audits.

119. The quality of the reports addressed to the Commission
should be improved in order to provide the latter with reliable
statistics on the execution of the projects and actions. Such data
are essential for the ex post evaluation of the programmes. A more
powerful information system, with better coordination between
the NAs and the Commission and between the NAs themselves,
would not only help to improve information activities but would

also broadcast the results more widely, thereby advertising and
publicising the programmes.

120. The policy of monitoring and evaluating the actions and
programmes overall should be thoroughly reinforced by develop-
ing methodologies that are appropriate to the overall aims being
pursued. Clearly defined indicators should be laid down and used
as an integral part of day-to-day management by everyone con-
cerned. Furthermore IT systems should be employed to collect
statistical data systematically from beneficiaries. In this way it
should be possible to measure the impact of the programme on a
regular basis and vis-à-vis the national systems.

This report was adopted by the Court of Auditors in Luxembourg at the Court meeting of 7 March 2002.

For the Court of Auditors

Juan Manuel FABRA VALLÉS

President

C 136/22

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Official Journal of the European Communities

7.6.2002

Budgetary implementation of commitments and payments for the Socrates programme

Table 1

Commitment appropriations

(Mio EUR)

Appropriations
entered in initial
budget

Transfers of
appropriations

Final appropria-
tions entered in
the budget

Additional
appropriations +
carryovers +
revenue allocated

Commitment
appropriations
available

Commitment
appropriations
used

Rate of
implementation

94,18

175,73

174,53

202,86

217,53

864,83

84,50

0,00

0,00

0,00

0,00

84,50

178,68

175,73

174,53

202,86

217,53

949,33

10,48

0,06

2,24

19,91

16,07

48,76

189,16

175,80

176,77

222,77

233,60

998,10

188,94

175,72

175,47

219,68

232,20

992,01

100 %

100 %

99 %

99 %

99 %

99 %

Payment appropriations

Appropriations
entered in initial
budget

SAB + transfers of
appropriations

Final appropria-
tions entered in
the budget

Additional
appropriations +
carryovers +
revenue allocated

Payment
appropriations
available

Payment
appropriations
used

Rate of
implementation

72,89

194,75

180,28

178,68

186,46

813,06

95,24

17,00

4,50

20,00

3,80

140,54

168,13

211,75

184,78

198,69

190,26

953,61

10,45

0,00

2,18

18,60

30,78

62,01

178,58

211,75

186,96

217,29

221,04

1 015,62

147,74

197,80

176,74

202,45

214,08

938,81

83 %

93 %

95 %

93 %

97 %

92 %

Year

1995

1996

1997

1998

1999

Total

Year

1995

1996

1997

1998

1999

Total

Source: Revenue and expenditure account and balance sheet.

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Official Journal of the European Communities

C 136/23

Budgetary implementation of commitments and payments for the Youth for Europe programme

Table 2

Commitment appropriations

(Mio EUR)

Appropriations
entered in initial
budget

SAB + transfers of
appropriations

Final appropria-
tions entered in
the budget

Additional
appropriations +
carryovers +
revenue allocated

Commitment
appropriations
available

Commitment
appropriations
used

Rate of
implementation

22,38

24,38

24,94

26,49

32,41

20,00

0,00

0,00

0,00

0,00

24,38

24,38

24,94

26,49

32,41

130,60

20,00

132,60

0,00

0,12

0,56

2,58

5,15

8,41

24,38

24,50

25,50

29,07

37,57

21,89

24,50

25,00

27,37

35,37

141,02

134,13

90 %

100 %

98 %

94 %

94 %

95 %

Payment appropriations

Appropriations
entered in initial
budget

SAB + transfers of
appropriations

Final appropria-
tions entered in
the budget

Additional
appropriations +
carryovers +
revenue allocated

Payment
appropriations
available

Payment
appropriations
used

Rate of
implementation

20,47

27,17

22,55

25,47

27,38

123,04

1,77

0,00

3,00

0,00

0,00

4,77

22,24

27,17

25,55

25,47

27,38

127,81

0,00

0,00

0,56

2,15

4,48

7,19

22,24

27,17

26,11

27,62

31,86

17,10

25,85

22,48

25,74

26,86

135,00

118,03

77 %

95 %

86 %

93 %

84 %

87 %

Year

1995

1996

1997

1998

1999

Total

Year

1995

1996

1997

1998

1999

Total

Source: Revenue and expenditure account and balance sheet.

C 136/24

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Official Journal of the European Communities

7.6.2002

Budgetary implementation of the Socrates and Youth for Europe programmes according to different sources
(1995 to 1999)

(Mio EUR)

Table 3

Socrates

Youth for Europe

Commitments

Payments

Commitments

Payments

1995

1996

1997

1998

1999

1995 to 1999

175,75
188,94

178,18
175,72

175,48
175,47

198,63
219,68

212,92
232,20

940,96
992,01

1
2

1
2

1
2

1
2

1
2

1
2

135,37
147,74

199,63
197,78

176,74
176,74

185,13
202,45

195,53
214,08

892,40
938,81

1
2

1
2

1
2

1
2

1
2

1
2

1995

1996

1997

1998

1999

1995 to 1999

21,55
21,89

24,11
24,49

25,00
25,00

27,37
27,37

35,28
35,28

133,31
134,03

1
2

1
2

1
2

1
2

1
2

1
2

16,86
17,10

25,45
25,85

22,48
22,48

25,74
25,74

26,86
26,86

117,39
118,03

1
2

1
2

1
2

1
2

1
2

1
2

1= General budget of the European Union (year n-2).
2= Revenue and expenditure account and balance sheet.

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Official Journal of the European Communities

C 136/25

Use of appropriations for the implementation of the Socrates programme (1995 to 1999)
broken down by action

Table 4

Appropriations committed

(Mio EUR)

Breakdown by action

1995

1996

1997

1998

1999

Total

Chapter I – Erasmus

Action 1 — Universities
Action 2 — Mobility grants

Chapter II – Comenius

Action 1 — Partnerships
Action 2 — Education for migrants
Action 3 — Further training

Chapter III – Horizontal measures

Action 1 — Lingua
Action 2 — ODL
Action 3 — Adult education
Complementary measures

Source: DG EAC.

50,74
75,56

4,56
74,64

27,77
69,96

35,60
90,22

35,11
94,71

153,78
405,09

6,90
5,50
1,50

29,92
4,08
2,99
11,76

24,05
5,77
4,36

33,24
7,28
5,50
16,31

18,70
4,81
4,37

27,31
5,12
4,84
12,61

23,55
4,86
5,23

32,00
6,17
5,39
16,69

31,87
4,57
2,40

33,18
6,97
6,03
17,35

105,07
25,51
17,86

155,65
29,62
24,75
74,72

Total

188,95

175,71

175,49

219,71

232,19

992,05

Table 5

Use of appropriations for the implementation of the Youth for Europe programme (1995 to 1999)
broken down by action

(Mio EUR)

Appropriations committed

Breakdown by action

1995

1996

1997

1998

1999

Total

Centralised actions

Action A
Activities — young people

A. I Exchanges and mobility

Spirit of initiative etc.

1,11

0,84

0,59

0,62

0,61

A. II.1 Youth initiatives
A. II.2 Periods of voluntary service

1,83
0,27

2,86
0,27

1,27
0,19

1,00
0,24

0,09
—

Action B
Youth workers

B. I Support for actions
B. II Cooperation on training structures

—
0,30

—
0,31

0,18
0,16

0,08
0,29

0,27
0,65

3,77

6,05
0,97

0,53
1,71

Action C
Cooperation between structures

Action D
Exchanges with third countries

Action E
Information and research

0,26

0,53

0,56

0,21

0,77

2,33

2,45

3,23

3,48

3,32

3,66

16,14

E. I Information for young people
E. II Youth research

1,21
—

1,44
0,88

Subtotal

7,43

10,36

2,62
0,62

9,67

1,84
0,36

3,12
1,30

7,96

10,47

Decentralised actions
Actions AI, AII 1, BI, C
Coordination at national level

Source: DG EAC.

12,37
2,09

12,20
1,93

13,26
2,07

17,17
2,49

21,63
3,28

Subtotal

14,46

14,13

15,33

19,66

24,91

Total

21,89

24,49

25,00

27,62

35,38

134,38

10,23
3,16

44,89

77,01
12,36

89,37

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Table 6

Erasmus scholarships 1995 to 2000

Country

Number of students

Austria

Belgium

Germany

Denmark

Spain

Finland

France

Greece

Ireland

Italy

Luxembourg

Netherlands

Portugal

Sweden

United Kingdom

Bulgaria

Cyprus

Estonia

Hungary

Iceland

Latvia

Lithuania

Norway

Poland

Romania

Slovakia

Slovenia

Switzerland

Czech Republic

Total

9 858

19 253

75 742

10 346

59 345

16 860

74 080

10 387

8 303

42 072

90

24 216

12 330

16 220

59 950

75

238

268

2 415

631

260

331

6 397

3 627

3 019

409

184

1 332

2 031

460 269

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THE COMMISSION’S REPLIES

SUMMARY

I. Certain contextual elements cast light on the design and management of these programmes, which were
considerably more generously funded than the preceding ones and whose annual funding grew by 39 %
between 1995 and 1999. Being the first programmes open to the associated countries, management was sig-
nificantly complicated; they were also mass programmes subject to severe constraints, notably as regards the
timetable; in addition, they were sometimes addressed to beneficiaries who were somewhat less organised than
for other Community measures. Against this background, we should not underestimate the very real tension
between ensuring rigorous management and the need to adopt user-friendly modes of management which
‘respect’ the principle of proportionality, having regard to the generally very small sums involved and the bene-
ficiaries concerned, and the desire for simplification expressed by all parties involved in the programmes.

These programmes directly benefited over one million persons, in terms of mobility, and almost 10 000 coop-
eration projects. They helped to boost cooperation in their specific fields, along with other, more political,
measures, which they rendered possible. All these parallel developments put great pressure on the Commis-
sion’s inadequate human resources and explain the need to rely on alternative management methods (which
have already been redefined for the future in the framework of the reform).

III. These two programmes already constitute a first attempt to rationalise Community measures in the field
of education and youth policy. Socrates, in particular, which covered all the levels of education set out in the
new Article 126 of the EC Treaty was the successor to no fewer than five disparate actions or programmes.
The result may have been a complex architecture, but this did not act as a hindrance to participation in the
programmes. These programmes have been simplified with the entry into force of the new generation (Socrates
II and Youth), and improvements have been made as regards evaluation and cooperation with other Com-
munity programmes.

IV. The two programmes are mass programmes involving thousands of transactions annually (generally for
small sums of money). The Commission did not have sufficient internal resources for direct internal manage-
ment, hence the reliance (degressively over the period) on a technical assistance office, which was constantly
supervised and monitored. Because of their closeness to the beneficiaries and the volume of operations to be
managed, the Commission also relied on national agencies; on the basis of experience in implementing the
Socrates and Youth for Europe programmes, this decentralised instrument was significantly reinforced for the
new generation of programmes.

V. The general question of reliance on external assistance in the form of a TAO has been at the heart of the
interinstitutional debate for several months, and new perspectives have been developed for the future; the
Commission has already indicated that in the future it will rely on other instruments to manage the education
and youth programmes. No such possibilities were available in 1995 and so the Commission had to rely on a
TAO, as for other programmes. An in-depth audit by Financial Control recognised the quality of this organisa-
tion, even entrusting to it, under its control, instruments which the draft reform of the Financial Regulation
says cannot be delegated.

VI. Despite this insufficient legal supervision, the Commission took various measures to improve the effec-
tiveness of reliance on networks of national agencies. For the future it has significantly strengthened the mecha-
nism, with the entry into force of the new programmes: contractual relations with the national agencies are
now part of a strict legal framework, which lays down the obligations of the Member States as regards ensur-
ing that the agencies it nominates are properly funded.

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VII. To take account of the late adoption of the legal bases and the constraints of a timetable which is often
based on the academic year, the Commission has to have recourse to transitional measures to avoid any inter-
ruption in the cooperation established via earlier programmes and actions. The Commission recognises how
difficult it is to speed up its financing decisions, because of the huge mass of dossiers, the complexity of the
management rules (notably in the wake of enlargement of the programmes to applicant countries) and the
complexity of the internal and external consultation process. However, significant improvements have been
made during the lifetime of the programmes, which have also made it possible to prepare more balanced
proposals for the new programmes.

VIII. The Commission concedes certain weaknesses in management which it is endeavouring to correct in
the framework of the new programmes, while stressing the impact and results of this first generation of
programmes. The various analysis and evaluation exercises, including those conducted by certain Member
States, and the existence of intergovernmental initiatives such as the Sorbonne and Bologna Declarations
(signed by all the participating countries and acknowledging the impact of the Socrates programme on their
education systems), testify to the major impact of this programme. As regards the Youth for Europe pro-
gramme the Commission considers, on the basis of the conclusions of the external ex post evaluation of the
programme, that the objective laid down by the legislator in favour of young disadvantaged people has been
achieved. As regards the dossiers of which OLAF has been informed, the Commission will take the appropri-
ate measures in due course.

IX. The question of adapting the evaluation cycle to the life cycle of a programme is a general problem, hav-
ing regard to the succession of programmes and the deadlines for negotiating the legal bases; in this connec-
tion, the few months’ delay are without consequence. Rather, evaluation should be seen as a continuous
progress whose conclusions are taken into account not only when preparing a new proposal for a legal basis,
but also in the context of implementing the programmes. Numerous improvements which the Commission
wishes to introduce into the management of the new programmes derive from the evaluation work done, at
various times, on these two programmes.

IMPLEMENTATION OF THE BUDGET FOR THE PROGRAMMES

6. Take-up of commitment appropriations was almost total. As
regards payment appropriations, and taking account of the auto-
matic carryover of payments relating to the associated countries,
take-up was 95 %.

7.
If we take into account the automatic carryover of payments
relating to the associated countries, take-up was 96 % in respect
of commitment and 90 % in respect of payment.

the quality of school education, under the impetus of the Lisbon
Council. The programme helped to boost this cooperation. Inter
alia, the evaluation reports note that ‘a certain variety and vague-
ness of the goals are positive for stimulating different European
activities’ and that ‘diversity, which naturally brings in its wake
difficulties and complexities of management, has provided Europe’s
educators with room for freedom, imagination and innovation’.

14. The complementarity between Socrates and the other pro-
grammes, including the research framework programme, has in
fact been in evidence in respect of individual subjects. It is worth
noting too the joint call for proposals launched in 1996 on new
technologies and education. Complementarity will be reinforced
by implementing the joint actions provided for in the new Socrates
II, Leonardo da Vinci II and Youth programmes, which have been
designed precisely to facilitate this coordination.

THE DESIGN OF THE PROGRAMMES

11 and 12. The programme, which succeeded a variety of pro-
grammes and other actions, has a complex architecture, partly
because it covers all levels of education; the increased demand for
the programme shows, though, that this complexity did not
adversely affect cooperation. Besides, education is a very sensi-
tive area from the subsidiarity viewpoint; progress as regards
cooperation cannot result just from implementing a programme;
it also arises from more political action such as the initiative on

15. On the basis of the experience made in implementing the
Youth for Europe programme, a strict legal framework has been
formalised for implementing the new Youth programme; it pro-
vides for ‘Provisions concerning the responsibilities of the Mem-
ber States and the Commission concerning the national agencies’
(hereinafter: ‘Provisions’), notified to the Member States in the
form of a Commission decision, which lay down the respective
obligations of each party concerning national structures for imple-
menting the programme’s objectives; in this context, the national

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authorities have provided the national agencies with the appro-
priate resources.

It is precisely because the Youth for Europe programme
16.
included a voluntary service dimension limited in its goals and
scope that the Commission has considered it advisable, in response
to a request from the European Parliament and following an
in-depth ex ante evaluation, to propose to the legislator a new
model for voluntary service. In implementing the two pro-
grammes, which are markedly different, the Commission took
care to ensure that duplication of effort will be avoided; then it
merged the two instruments in its proposal for a new Youth pro-
gramme.

17. The vague and variable definition of the notion of ‘disadvan-
taged young people’ makes it very difficult to keep the projects
concerned distinct. However, on the basis of an external evalua-
tion carried out on conclusion of the Youth for Europe pro-
gramme in 2000 and 2001, which puts (under action A) at 70 %
the number of projects funded and involving disadvantaged young
people, and at 20 % the number of projects which focus exclu-
sively on this category of young people, the Commission consid-
ers that the objective of using one third of the money to benefit
disadvantaged young people has been achieved.

18. However, various one-off actions were implemented, from
the beginning of the programme, together with the Council of
Europe. In the framework of the new Youth programme, this
partnership has been amplified and concentrated on activities
linked to training, supplementing the activities under action 5 of
the programme. Likewise, cooperation has been established with
the United Nations on the occasion of the International Year of
Volunteers (2001).

DELAYS AND AMENDMENTS TO IMPLEMENTATION

19. Because of the protracted negotiations, the first programmes,
which came under the codecision procedure, were not adopted
until March 1995. This led to knock-on delays with, for example,
certain documents having to be submitted for the opinion of a
committee which could not be created until the decision had been
adopted. As a result. the Commission considered it necessary to
adapt the timetable. As from the second year, the situation depicted
by the Court has improved.

21. The decentralised management of three of the programme
actions, which created an additional burden of labour for the NAs,
because of inadequate resources, proved however, as was empha-
sised in the ex post evaluation of the Youth for Europe programme,
to be one of the key elements of the programme’s success, by
facilitating more direct contacts with the project promoters and
closer grassroots involvement. The evaluators have suggested
extending this decentralisation, notably as regards exchanges with
third countries. In the meantime, the NAs have been given the
necessary resources under the new Youth programme.

SHORTCOMINGS IN THE MANAGEMENT SYSTEM

25. As for other Community policies, having recourse to a TAO,
which was constantly monitored and whose services were defined
in compliance with the practice current at the time, was essential
for implementing the two mass programmes to be managed by a
directorate-general with inadequate internal human resources. For
the future, the Commission has taken a completely fresh look at
outsourcing, including the education and youth programmes,
and, until such time as an executive agency is available, it has sig-
nificantly restricted its use of a transitory TAO for the two pro-
grammes which succeeded Socrates and Youth for Europe. The
practical conditions for this did not exist in 1995.

26. When the proposals for decisions establishing the pro-
grammes were adopted (in 1993), the principle had not yet been
established of making recourse to external assistance conditional
on its being mentioned both in the legal basis of the programme
and in the comment in the budget line. A delegation arrangement,
complete with legal basis, has been put in place for the two pro-
grammes which succeeded Socrates and Youth for Europe and
have been confirmed in the Commission’s proposals on externali-
sation (the communication at the end of 2000).

28. The specifications, which were subject to prior interdepart-
mental consultation which revealed no doubts as to the activities
to be entrusted to the TAO, stipulated clearly that the TAO would
perform these tasks, since the Commission did not have the nec-
essary resources (this concerns thousands of annual payments,
generally for small amounts).

20. Because of the late adoption of the Socrates decision, the
universities were unable to present their applications in July 1995
for the academic year 1996/97. Hence, in agreement with the Pro-
gramme Committee, the Commission extended by one year the
form of this cooperation under the old Erasmus programme, as a
transitional measure.

29 and 30. The conditions governing the externalisation of pay-
ments to final beneficiaries have, for the future, been clearly
defined in the draft reform of the Financial Regulation: this pro-
hibits subcontractors from exercising duties which come within
the remit of the public authorities. In compliance with this prin-
ciple, as from 2001, the Commission has internalised all the pay-
ments which were formerly carried out by the transitory TAO
responsible for helping it to implement the two programmes

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which succeeded Socrates and Youth for Europe; this was possible
because the budgetary authority agreed that intramuros external
personnel be financed under these programmes, thereby reinforc-
ing the Commission’s resources. These conditions did not exist in
1995. The Commission has exercised permanent control on the
way the TAO has discharged these tasks.

of a ‘management fee’; the complexity and variety of the TAO’s
tasks would have made it very difficult to have a contractual link
based on the purchase of clearly individualised flat-rate services.
The KPMG study of June 2000 on the TAOs and the Commission
concluded, in terms, that ‘the cost comparison between TAO and
Commission does not show major advantages for either side’.

In order to obtain competent assistance in the area in ques-
31.
tion, the Commission had explicitly stated that knowledge of edu-
cation policies was one of the selection criteria in the invitation
to tender with a view to selecting the TAO. Of the thousands of
projects financed under the two programmes it managed with the
aid of the TAO (representing a total of EUR 273 million), the
Commission selected five projects with, as partner organisations,
one of the two organisations which set up the TAO. The Com-
mission was aware that this selection did not result from the
abuse of a privileged position; the projects were not selected by
the TAO but by the Commission. More generally the TAO had put
in place internal procedures with a view to avoiding conflicts of
interest when it came to analysing the dossiers.

37 and 38. The Commission had laid down a typology of situa-
tions in which such deposited amounts could be constituted at
the end of a contractual year and verified that the amounts depos-
ited with the TAO corresponded to this typology; where appro-
priate, they were rejected and the corresponding expenditure was
imputed to the following year. Having come to the same conclu-
sion as the Court, the Commission had terminated this practice
as from 1998 and has since maintained this strict approach. The
approach adopted for the closure of the first financial years has
not led to any undue payment by the Commission during the
TAO’s operational period.

32. The centralised and decentralised strands of the programmes
are managed in total separation. Besides, the member organisa-
tions of one of the associations in question, which functions as an
NA, acts as an intermediary in distributing Community funds to
the final beneficiaries and does not directly benefit from these
funds. Under the circumstances, the Commission, which was fully
aware of the situation, sees no reason why it should have regarded
this situation as constituting a conflict of interest.

33. As from closure of the financial year 1998, corrective mea-
sures were taken, following a recommendation from the TAO
auditors.

34. The Commission has not systematically recovered interest
on a six-monthly basis; it has, however, pursued a process of
recovery, and the remaining sums will be recovered in 2002 as
part of the final closure of the TAO accounts.

35. Tripartite agreements were signed between the old TAOs,
the new TAO and the Commission to transfer the funds (EUR 6,2
million) to the new TAO for payment to projects selected under
earlier programmes; after payment of these projects, these funds
accounted for no more than EUR 0,4 million at the end of 2000;
the balance will be repaid to the Commission once the final agree-
ments have been definitively closed in 2002.

40. The Commission shares this view. It is for this reason that it
has overhauled the mechanism for reliance on NAs in the pro-
grammes which succeeded Socrates and Youth for Europe; the
contractual relations between the Commission and the NAs are
now part of the Provisions. These provisions lay down minimum
conditions for setting up an NA.

41. The Commission is at pains to ensure that the principles set
out in the programme decisions are applied at decentralised level,
but also that certain national realities are borne in mind. To this
end, regular meetings (including training sessions) are organised
with the NAs on ways of coordinating the work, etc.; the user
guides set out the various aspects of implementing the pro-
grammes; manuals have been prepared especially for the agencies.

42. The Commission has taken steps, in the framework of the
programmes which succeeded the Socrates and Youth for Europe
programmes, to reduce the shortcomings pinpointed by the Court
as regards the project selection phase, by establishing and giving
more detail on the project evaluation criteria in the user guide
and by including the project selection procedures in the Provi-
sions; it is up to the national authorities to see to it that the NA
apply the procedures and selection mechanisms in a fair, transpar-
ent and consistent manner.

36. The contractual link between the Commission and the TAO
was typical for this type of assistance: reimbursement, up to a
ceiling, of expenditure actually borne by the TAO, and payment

43. The NAs’ resources have been reinforced in the context of
the new programmes and, in parallel, the procedures have been
simplified as much as possible, for example by introducing a flat-
rate system for the new Youth programme. Programmes of work
which have to be prepared by the NAs now include an audit plan

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in which the agencies must describe their measures and proce-
dures for checking that contractors’ expenditure complies with
the Commission’s rules on the nature of the supporting docu-
ments to be requested in connection with the financial accounts,
to detect abnormal situations as soon as possible during the
project life cycle, and to audit the beneficiaries.

51. These systems, which are not as user-friendly as more recent
systems, have encountered misgivings, frequently in the case of
distributed systems (incompatibility with certain national sys-
tems, when the NA is located in a ministry, for example). How-
ever, they are currently being used by all the NAs of the 30 par-
ticipant countries, pending the creation of a new, more ambitious
IT tool (including the possibility of submitting subsidy applica-
tions online), which should enable the NA/Commission networks
to develop harmoniously.

44. The funding rates applied were established, after negotiation,
on the basis of the needs expressed by the NAs and as a function
of other available funds. Since then the same cofunding rules have
been applied to all the NAs under the new Youth programme. The
new Provisions are designed to ensure that effective structures are
set up in the future.

45. The difficulty referred to by the Court prompted the Provi-
sions concerning the programmes which succeeded Socrates and
Youth for Europe. These Provisions also flesh out the tasks of the
NA, the NA’s monitoring and supervisory responsibilities, the
project selection procedures and the rules governing the inspec-
tion and auditing of the projects by the NA.

47 and 48. With some exceptions, the Erasmus agreements,
which account for the bulk of the mobility in Socrates, were signed
in good time, before the start of the academic year. As regards
Youth for Europe, the time limits for allocating the funds between
the participating countries, in agreement with the Programme
Committee, the approval of the NAs’ plans of work and finalisa-
tion of the agency operating agreements, prior to conclusion of
the agreements on the decentralised measures resulted in the
decentralised measures being finalised after the start of the con-
tract period. For the programmes which succeeded Socrates and
Youth for Europe, the Commission attaches priority to the timely
conclusion of the agreements with the NAs. However, although
in the past the late conclusion of agreements between the Com-
mission and the NAs was a negative factor for the final beneficia-
ries, its impact was limited by the NAs’ pre-funding capacity (using
national funds, for example).

WEAKNESSES IN THE IMPLEMENTATION OF THE ACTIONS
AND IN THE MANAGEMENT OF THE PROJECTS

53. The Commission is endeavouring, for the programmes which
succeeded Socrates and Youth for Europe, to address the weak-
nesses pinpointed by the Court concerning the project selection
phase by detailing and explaining the project evaluation criteria
in the user guide, by setting out the responsibilities of the Member
States in the selection process: in accordance with the Provisions,
the national authorities must ensure that the NAs apply the selec-
tion procedures and mechanisms in an equitable, transparent and
consistent manner. The Commission has prepared operational
guides for each decentralised action, describing in detail all the
stages to be followed for implementing the action, and making a
distinction between eligibility criteria, quality criteria and priori-
ties.

54. The Commission sees to it that the NAs apply the adminis-
trative and financial management procedures required by the pro-
gramme actions and that they deliver the necessary services, but
it is not for the Commission to lay down binding rules on the
NAs’ internal organisational arrangements.

49. Since then, the following measures have been taken: system-
atic reminders are sent to the agencies in the event of delay in
submitting the reports; the action plan for dealing with 1995 to
1998 dossiers is very advanced and will be finished in 2002; a
specific action plan for 1999 is being implemented, it being
understood that agreements relating to a given year cannot be
closed until between a year and a half and two years after.

50. Nevertheless the Commission considers that, in the case in
question, there has been no over-funding of the national agencies.

55. The Commission considers that the systematic submission
of supporting documents is an excessively cumbersome mecha-
nism for the beneficiary and the NA, and that it runs counter to
measures designed to simplify procedures and to respect the rule
of proportionality, in view of the very small subsidies often
granted in the context of the programmes (EUR 2 000 per school
for a Comenius project). For the future, it is endeavouring to sim-
plify the procedures, for example by introducing a system of flat-
rates for the new Youth programme. Additionally, it has adopted
standard agreements for contractual relations between NA and
final beneficiaries which include the possibility of on-the-spot
checks both by the agencies and the Commission, and the pro-
grammes of work which the NAs prepare now include an audit
plan.

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56. Several national authorities, in cooperation with the NAs,
have carried out such evaluations. To prepare the interim evalu-
ation of Socrates II, the Commission, in cooperation with the
Socrates Committee and the NAs, has made provision for 14 spe-
cific evaluations between 2001 and 2003, plus the national reports
on the implementation of the programme. A set of qualitative
and quantitative indicators have been prepared, which will con-
stitute an in-depth working tool for the NAs and the Commission
with a view to preparing the evaluations. As regards the Youth for
Europe programme, an ex post evaluation at European level was
carried out in 2000 to 2001. A framework for monitoring and
evaluating the new Youth programme is currently being worked
out, including indicators.

the percentage (which varies from one country to the next, depend-
ing on the national policy) for the two payment instalments, to
encourage optimum use to be made of the Community funds
allocated to the countries, including possible reallocations to the
most efficient universities.

62. The introduction of the ‘past performance’ criterion in
Socrates II will help to correct this phenomenon of ‘overestima-
tion’ by the universities.

57. The annex to the Socrates Decision (Action 2, point 7) pro-
vided that ‘as the Community’s contribution covers only part of
the cost of students’ mobility, Member States are invited to help
provide the necessary funds. In this connection, grants or loans
available to students in the Member State of origin shall continue
to be paid during the period of study in the host country’. Given
that the Member States have very different student support sys-
tems, the Erasmus mobility grants follow the variable level or
source of the national funds. Hence there is no possibility of har-
monising the level of grants.

64. Comenius, a new action introduced under Socrates, marked
the beginning of European cooperation with regard to school
education. It is normal that calling for cooperation between
schools should require a transitional period (although this is not
a situation which applies to all the participant countries). On the
other hand, the small grants given to the schools to develop part-
nerships have not played the expected incentive role. Nonethe-
less, the European Commission considers that this new action
was quite successful towards the end of Socrates I, as was con-
firmed by the specific evaluation report on Comenius, which
stresses how much this action has added, in terms of number and
impact.

58. The way in which the Erasmus grants are allocated by the
NAs is decided by the NAs themselves, in coordination with the
national systems. Hence, several models exist as a function of the
characteristics and policies of the various countries. The Commis-
sion considers that, having regard to subsidiarity, this is a matter
for the Member States.

65. The Commission accepts the Court’s findings. It has taken a
series of measures with Socrates II to ensure effective and homog-
enous management (operating manual including all the manage-
ment rules, follow-up visits, feedback letters, etc.).

59. The diversity of the national student support systems has an
impact on Erasmus participation rates. The separation between
the status of Erasmus student and the right to a scholarship, and
the provision of the Socrates II decision on taking account of stu-
dents’ economic situation should ensure, under the new pro-
gramme, that more students can benefit and that the more dis-
advantaged students will receive a higher grant.

60. The checking function is normally delegated to the universi-
ties; the scholarship complementarity and eligibility criteria are
part of the contract between the NAs and the universities, and it
is for the NAs to carry out appropriate checks.

66. Naturally, it is difficult to require in all cases that the partner-
ship languages be learned sufficiently well to be able to do all the
necessary work on the JEP. This is not the goal of the action. The
Commission’s manual for the JEPs explicitly addresses this aspect:
‘a common vehicular language may be used for most of the activi-
ties, although the two groups of young people should acquire the
rudiments of the partner’s language’. The objective of making
people aware of linguistic diversity and of the need for language
learning (including the less widely spoken languages) can also be
achieved by using a vehicular language. For example, the lan-
guages targeted by the projects changed as a result of the Com-
mission’s and the NAs’ work, and the number of projects target-
ing French, English and German dropped from 73 % in 1991 to
47 % in 1997.

61. The Commission asks the NAs to present a national plan for
the annual distribution of Erasmus student grants before signa-
ture of the agreements in question. This plan makes provision for

67. The minimum duration of 14 days has been the subject of
frequent discussions at all levels since the beginning of the Lingua
programme. They always ended with the decision to stick with 14
days, which is judged essential in terms of project quality. Natu-
rally this imposes constraints on the project promoters, but is also

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reflected in the level of the subsidy granted. As regards the search
for partners the Commission has done its utmost to help projects,
either in the form of advice (see manual for the JEPs — Chap-
ter 2, point 1), the creation in 1997 of a database for identifying
partners, or the organisation of the NAs’ network.

73. The introduction of the flat-rate system, accompanied by the
need to produce a detailed list of project participants, signed by
these participants, reliance on a standard contract which provides
for payment of an advance, and more rigorous checks, notably as
regards application of the financing rules, should make it possible
to remedy the weaknesses.

69. The Commission has alerted the NAs to the importance of
ensuring the necessary rigour in the project selection procedure.
In the framework of the new programme it has set out to address
the weaknesses in terms of project selection, by laying down and
explaining the evaluation criteria in the user’s guide, and by set-
ting out the Member States’ responsibilities in the selection pro-
cess (according to the Provisions, the Member States have to
ensure that the NAs apply the selection procedures and arrange-
ments fairly, openly and consistently).

74. These three cases are being investigated by OLAF. The Com-
mission will take the necessary measures at the appropriate time.

75. As the Court says, the TAO and the Commission were in a
difficult situation as a result of the continuous growth of tasks but
no change in overall resources. This led to the need to make dif-
ficult choices, and encouraged the annual selection of projects.

70. Fundamentally, the multilateral projects have greater Euro-
pean added value than bilateral projects. In parallel the bilateral
projects, which are less costly, should focus on disadvantaged
young people and their involvement in the programme. The
Commission sees these two instruments as complementary.

76. The audit performed on the TAO by the Commission’s finan-
cial control led to a positive judgement on the organisation, docu-
mentation and compliance with the procedures set out in the
‘operational chain’. Following this audit, certain improvements
were made, notably as regards the point mentioned by the Court.

71. As indicated above, the NAs’ resources have been reinforced,
and the procedures have been simplified, notably by introducing
a system of flat rates calculated in such a way as to cover all the
activities concerned, and hence requiring a complementary con-
tribution for implementation purposes. The programmes of work
which the NAs have to prepare now include an audit plan in
which the agencies must describe their measures and procedures,
with a view to verifying the contractors’ expenditure in accor-
dance with the rules laid down by the Commission governing the
nature of the supporting documents which must accompany the
financial accounts, to detect abnormal situations as soon as pos-
sible during the project’s life cycle and to audit the beneficiaries.
In addition, the Provisions governing the responsibilities of the
Member States and the Commission as regards the NAs give both
the opportunity to conduct on-the-spot checks on projects.

77. The human resources available to the TAO ruled out a more
ambitious objective concerning checks on documents. At the end
of 2001, DG EAC concluded signed framework contracts with
audit firms with a view to ensuring that in future a higher propor-
tion of projects would be subject to such audits.

78. The first year of implementation of the institutional con-
tracts concerned the academic year 1997/1998. However, since it
was a new action of great importance for the programme as a
whole, the Commission was keen to examine the first reports
(received in October 1998) in the light of the average level of per-
formance in each participating country before adopting the result
evaluation grid and imposing possible sanctions on the inefficient
universities. This protracted exercise explains the delay in closing
the 1997 contracts.

72. The Court’s remarks must be viewed in the context of the
Youth for Europe programme, i.e. a multitude of projects and low
level subsidies (average EUR 8 750), with the beneficiaries mainly
consisting of small organisations or groups of young people
whose human and financial resources are limited. The reliance on
a declaration of honour or self-certification was in part due to the
funding system for the Youth for Europe programme, taking into
account the need for a certain proportionality. The introduction
of flat rates has put an end to this practice in the new Youth
programme. When the flat rates are not applied and supporting
documents are requested (particularly for transport costs), self-
certification is no longer accepted and it is necessary to produce
the ticket.

79. Performance has a direct influence (which may go as far as
withdrawal of the subsidy) on the subsidy level for the following
years (n+ 2), this being calculated as a function of the perfor-
mance observed during the previous years. In the context of an
‘institutional contract’ covering all the European cooperation
activities of a university, the Erasmus subsidies enable account to
be taken of immediate needs, and maximum use should be made
of this, by allocating the subsidies to the activities which need
them most (more especially the management of bilateral mobil-
ity activities for students and teachers).

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80 and 81. To adopt an agreement for the entire duration of the
project would also mean committing payments covering the
totality of the multiannual subsidy during the first year. Because
of the lack of funds available and the profile of the programme
funds during its first years (virtual stability of funds), committing
the funds needed for multiannual contracts was not considered
possible in Socrates I. This multiannual aspect has been intro-
duced for certain actions under Socrates II.

essary. As from 1999 the reports, initially designed as internal
documents, have been communicated to the audited bodies. In
addition, various resources have been used, to inform the NAs of
the auditors’ findings (missions to operational units, meeting of
agencies in Brussels, etc.). Improving the procedures for monitor-
ing the audit reports was given particular attention in 2000, at
the time when an internal audit unit was set up.

83. An action plan has been put in place in coordination with
the TAO with a view to absorbing the past delays; there is a
monthly scoreboard arrangement. In addition, the Commission
conducts very specific monitoring to ensure that cases in which
the 50 % funding threshold is exceeded do not occur.

84. The Commission has done its best to reduce, as much as
possible, the time lags in the decision-making procedures referred
to by the Court, throughout the decision cycle, notably by del-
egating the adoption of funding decisions to the Director-General.
Currently the Commission is considering how to increasingly
decentralise projects involving third countries to the national
agencies.

88. This practice was initiated to carry out continuous checks on
the payment of the balances on the part of the TAO. It made it
possible to identify the difficulties facing the TAO and was instru-
mental in adjusting the Commission’s requirements as regards
analysis of the accounts furnished by the beneficiaries. Finally,
when monitoring the payment of the balance, it was possible to
carry out a check on the entire dossier. The procedure was one of
the methods used by the Commission to ascertain where TAO
should be improved (e.g. checks on supporting documents, albeit
keeping a sense of proportion) and was a useful instrument for
ongoing monitoring of the TAO activities in the field of pay-
ments. The endorsements authorised by the TAO concerned only
minor features (dates for example) with no financial consequences.

THE COMMISSION’S AUDITS

85. The Audit Unit, which was created before the administrative
reform of the Commission introduced the concept of ‘audit capa-
bility’ in the context of internal auditing, in effect performed
external audits on the beneficiaries of the Community funds and
the intermediaries (NAs, TAO). Even if there was no formal analy-
sis of risks as later specified by the reform, the annual programmes
took account of elements which pragmatically comprised risk fac-
tors. In the context of the administrative reform, in June 2000, an
internal audit function was created which is separate from the
beneficiaries control function.

86.
It has constantly been necessary to make choices concern-
ing the audit missions for the Socrates and Youth for Europe pro-
grammes, taking into account the resources available for audit
purposes and the wide range of auditable programmes managed
by the DG (from 1995 to 1999 the cumulative budget of Socrates
and Youth for Europe grew by 39 %; because of the opening of
these programmes to the associated countries the number of NAs
under contract with the DG increased by 22 during the same
period). In this context it was not possible to carry out checks on
the NAs every two years and, in view of the sums involved, prior-
ity was given to controlling the use which NAs made of the
decentralised funds.

87. The audits have served to verify the accounts submitted by
the audited agencies and to adjust the payments of the balances
where appropriate; they have also highlighted recurrent problems
and enable programme management to be reoriented where nec-

89. The financial procedures and requirements have been
strengthened over time. However, both for the TAO and the Com-
mission a balance had to be found between the sheer mass of dos-
siers, usually for only small amounts, and the level of controls,
bearing in mind the resources available at the same time.

90. This finding, in respect of which corrective measures have
been taken, was formulated in the report of DG Financial Control,
which was generally positive and which concluded that ‘the over-
all conclusion is that the TAO is well managed and has a good
organisational structure’.

EVALUATION OF THE PROGRAMMES

91. The six months’ delay in presenting the interim and final
evaluation reports for Socrates I was mainly due to the difficulty
of assembling statistics on the implementation of decentralised
measures (notably the Comenius activities). Although, to quote
one of the recitals of the decision establishing the programme,
‘the Commission’s aim…. is to ensure that around 10 % of all stu-
dents in the Community follow a university course organised by
universities in more than one Member State’, the programme’s
objectives do not include the fact that the programme will actu-
ally finance such mobility, and in any case the resources which
were allocated would not have made this possible. However, as
the Court states, the impact of the programme is undeniable; over

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half a million students have directly benefited from its funds, and
it has been instrumental in universities regarding mobility as an
integral part of higher studies.

92. Although the decision adopting the Youth for Europe does
not require the presentation of a final report, an external evalua-
tion was performed in 2000 to 2001, and a working document
was prepared by the Commission.

account of the research team and the firm’s experience enabling
him to do the work properly. The contract for the final evalua-
tion of Socrates I was also left on the basis of a call for tenders,
and the result was considered to be of high quality by the Euro-
pean institutions and the Member States participating in the pro-
gramme.

In due course the Commission will take the necessary measures.

93 and 94. Answer as in respect of points 95 and 96: the Com-
mission accepts the Court’s criticism on the non-availability of
full statistics on the implementation of the decentralised measures
in particular at the time of the Socrates I evaluation. This was
already conceded by the Commission in its February 2001 report
on the evaluation. As regards preparation of the evaluation of
Socrates II, the Commission, in cooperation with the Programme
Committee, has adopted a plan for evaluation activities which will
take place during 2000 to 2004 with a view to preparing the
interim evaluation report provided for in the Socrates decision for
June 2004. As regards the Youth for Europe programme, the ex
post European level evaluation carried out in 2000 to 2001 stressed
the positive impact of the programme. A framework for monitor-
ing and evaluating the activities of the new Youth programme,
based on certain of the recommendations made by the evaluators,
is currently being prepared. The Commission is currently prepar-
ing a series of periodical indicators which will make it possible,
with the help of the NAs, to monitor the implementation of the
programme more systematically. The Member States are required
to transmit to the Commission a report on the implementation
of the programme and its impact by 31 December 2004 with a
view to interim evaluation.

95.
Implementation of the new programmes has drawn largely
on the recommendations contained in the interim and final evalu-
ations.

96. The time limits for negotiating the legal bases (to be adopted
by the codecision procedure) for the new programmes made it
necessary to carry out an ex ante evaluation at the beginning of
1998 or, at a time when the results of the interim evaluations
were not yet available (the decision establishing the Socrates pro-
gramme provided for an interim report on the launch phase before
30 September 1998).

99. The award of contracts followed an evaluation of the bids,
taking account of their quality and price, and was in line with the
rules in force.

100. Following discussions at various points between the con-
tractor and the Commission during the evaluation, the work plan
was adjusted to take into account different areas. The Commis-
sion agrees that these changes to the work plan should have been
contractually formalised.

101. Following the Court’s recommendation, the Commission
obtained from the contractor all the data to prepare the evalua-
tion report. It should be added that the Commission would have
had no hesitation in authorising the publications concerned,
because it thought it useful to have a discussion on these subjects.

102. The input during the key phases of the evaluation proce-
dure from a steering committee and the consultation of the
Socrates Committee’s evaluation working party made it possible
to monitor the broad lines and the methodological choices made
by the contractor. The Commission considers that the study was
high quality and the data were not unreliable. However, the sys-
tematic collection of data and the identification of pertinent data
with a view to monitoring actions and future evaluations, under
the Socrates II programme, will make it possible to rationalise the
procedures and to reduce the costs associated with the a posteriori
collection of data. However, it will always be a matter for the
evaluator, as a function of his remit, to collect supplementary
data, notably as regards qualitative aspects.

97. The Commission was aware of this, which was clearly set out
in the bid entered by the successful tenderer. However, it felt it had
to accept this bid, which was of better quality and less expensive
than the other two bids received, and which was presented by the
firm in question but which represented in reality a consortium of
four companies.

CONCLUSIONS

98. The Commission would point out that the contractor was
chosen to do analyses in the field of higher education, on the
strength of a call for tenders, on the basis of his expertise, taking

106 and 107. Despite a rationalisation drive, the design of the
programmes was partly informed by the fact that these two new
programmes followed a very disparate set of programmes and
actions, and because they covered — at least in the case of Socrates

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— a very wide and extremely complex scope. Management and
implementation were characterised by the difficulty which the
Commission experienced in implementing, with the limited
resources at its disposal, such programmes, involving thousands
of annual transactions in a context characterised by a large increase
in the overall funds (but with measures pertaining to very small
sums) and the complexity caused by the fact that these pro-
grammes, in their initial phase, were open to all the applicant
countries. Despite this, the various evaluation reports confirmed
the Court’s opinion as to the undeniable impact of these pro-
grammes, not only for hundreds of thousands of direct beneficia-
ries, students and others, but also on the education systems and
youth policy in the participating countries. The Commission
would also stress that this type of programme (particularly in the
light of the modest budgets, compared to national budgets for
education and youth policy) indicates the need for a certain flex-
ibility in its implementation, which makes it difficult to lay down
measurable objectives in terms of impact on the systems.

In the spirit of the administrative reform, the Commission
111.
intends to step up its controls under the programmes which fol-
lowed on from Socrates and Youth for Europe. To this end it has
concluded a framework contract with audit firms, given the inad-
equacy of its own resources for checking on how programmes are
run, and giving rise to a plethora of financial agreements. Like-
wise, tighter management is required of the NAs.

112. The Commission has taken steps to improve evaluation
under the programmes which followed Socrates and Youth for
Europe; however, the evaluation work carried out under these two
programmes is a major source of suggestions which the Commis-
sion is taking into account in implementing the new programmes.

108. As for other Community programmes, the Commission
relied on a TAO, whose services were in compliance with the
practice at the time (1994); the Commission constantly checked
on and supervised the TAO and, while there might have been a
certain risk of a conflict of interests in that the TAO had to have
certain skills in the field, measures were taken to manage this risk.
In the context of the programmes which followed Socrates and
Youth for Europe, the Commission was able (thanks to an increase
in the external intramuros resources) to internalise payments to the
final beneficiaries selected by the Commission and since then has
reduced its reliance on a transitional TAO, which it will dispense
with once an executive agency is available (following adoption of
the framework regulation for which the Commission submitted a
revised proposal at the end of 2001).

109. The Commission is committed to simplification (including
reliance on flat rates for example), which means maintaining a
difficult balance between rigour in management and its typical
approach to programmes such as Socrates and Youth for Europe
(a multiplicity of very small measures run by less organised ben-
eficiaries than in other Community policies), and has undertaken
to rapidly close the last remaining open agreements.

RECOMMENDATIONS

113.
In December 2000, the Commission presented a proposal
for a framework recommendation on the establishment of execu-
tive agencies; this was revised in December 2001 to take account
of the opinions delivered by Parliament and the Court of Audi-
tors. In September 2000 (letter of amendment to the PDB for
2001) it announced its intention of relying on such an executive
agency for the future management of programmes in the field of
education and youth.

114. On the entry into force of the programmes which followed
Socrates and Youth for Europe, the Commission significantly
strengthened its reliance on a network of national agencies. This
improved approach led to the recommendations made by the
Commission as regards reliance on such networks as a way of
externalising management.

115. Since 2001, all the agreements have generated individual
commitments and payments in Sincom, given that the transi-
tional TAO no longer pays the beneficiaries; the reconciliation
proposed by the Court has de facto been achieved.

116. The new ‘Provisions concerning the responsibilities of the
Member States and the Commission as regards the NAs’ are the
cornerstone of management via a network of national agencies.
They were established at the time of entry into force of the pro-
grammes which followed the Socrates and Youth for Europe pro-
grammes, requiring the national authorities to provide the NAs
with sufficient resources to accomplish their tasks.

110. On the basis of its experience with the Socrates and Youth
for Europe programmes, the Commission is endeavouring to put
in place better management instruments and structures for the
new programmes, in terms of the legal framework laying down
the responsibilities of the Member States and the Commission for
the different stages of this implementation (including the obliga-
tion on the Member States to provide the NAs with sufficient
resources), the simplification of procedures, monitoring and con-
trol, and programme evaluation.

117. This recommendation was implemented under the pro-
grammes that followed Socrates and Youth for Europe.

118. This recommendation was taken on board by the Commis-
sion when, for the programmes which followed Socrates and
Youth for Europe, it developed management and control rules in

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the form of operating manuals which the NAs must adhere to in
their work on the dossiers they manage.

119. This recommendation has been implemented under the
programmes which followed Socrates and Youth for Europe. In
particular, the Commission undertook to develop a common
information technology system, geared to these programmes and
to other programmes in the field of education and culture and
designed to replace the existing systems.

120. For the new Socrates II programme, a framework has been
established following the presentation to the Programme Com-

mittee at the beginning of 2002, comprising indicators, a time-
table and provisions designed to standardise, with a view to data
comparability, the presentation of the national reports to be sub-
mitted by the end of 2003. A framework for monitoring and
evaluating the activities of the Youth programme, based on cer-
tain recommendations made by the evaluators, is being prepared;
in this spirit, the Commission is currently preparing a series of
periodic indicators which will make it possible, with the assis-
tance of the NAs, to monitor more systematically the implemen-
tation of the programme; the Member States are required to trans-
mit to the Commission a report on the implementation of the
programme and its impact by 31 December 2004 with a view to
interim evaluation.