Report from the Commission to the Council and the European Parliament on the establishment of a database on payments under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund
Date: 2002-06-25
Institutions: European Commission
Subjects: EAGGF Guarantee Section, EU statistics, agricultural statistics, database, feasibility study, payment

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 25.06.2002
COM(2002) 339 final

REPORT FROM THE COMMISSION TO THE COUNCIL
AND THE EUROPEAN PARLIAMENT

on the establishment of a database on payments under the Guarantee Section
of the European Agricultural Guidance and Guarantee Fund

1.

INTRODUCTION

This report is established in accordance with Article 11 a of Council Decision 96/411/EC on
improving Community agricultural statistics, as amended by Decision 2298/2000/EC1, which
states: “The Commission shall continue current feasibility studies to determine the technical
possibility of setting up a database relating to the payments made by the EAGGF (Guarantee
Section)  to  include  in  particular,  at  the  level  of  each  beneficiary,  data  on  the  level  of  aid
received, the areas and the number of animals concerned, and the most appropriate computer
system  for  processing  such  data.  At  the  latest  on  31 December  2001,  the  Commission  shall
submit  a  report  to  the  European  Parliament  and  to  the  Council  on  the  results  of  these
feasibility  studies,  and  on  the  resources  (technical,  financial  and  human)  which  would  be
required to implement the database and to process the data statistically”.

2.

OVERVIEW OF PROGRESS AND ACTIVITIES CARRIED OUT

As foreseen, during 2000 the Commission continued the feasibility study  launched  in 1999,
on how to establish a comprehensive financial data system for the  EAGGF  Guarantee  fund,
using  the  system  for  recording  Member  States’  summarised  monthly  accounts  data  then
available  (AGREX)  as  a  starting  point.  This  feasibility  study  was  in  response  to  the
Commission’s desire to establish a system for the collection, storage and processing of data
which  would  allow  for  uniformity  in  processing  rules  and  in  financial  forecasting,  while
maintaining the possibility for the pragmatic adaptation of these with regard to developments
in  the  legal  framework.  This  study  also  addressed  the  benefits  and  drawbacks  of  different
technical solutions as well as the budgetary implications.

In addition, the study also elaborated the possibilities on how to proceed in order to establish
a complete database, which would contain, on a monthly basis, the detailed data on individual
financial  transactions  between  the  86 paying  agencies  and  the  individual  beneficiaries.  The
study  concluded  that  the  implementation  of  such  a  detailed  and  complex  database  would
require  important  human  and  financial  resources,  not  only  at  Community  level  but  also  at
national level, and that it would be a long period of time before it could become operational.

While  the  results  of  this  feasibility  study  have  already  assisted  the  Commission  in  taking
several  operational  decisions  concerning  the  improvement  of  the  current  information
technology and the system for data transmission, the Commission has not yet made any final
decision  as  far  as  the  setting  up  of  an  entirely  new  database  for  detailed  monthly  EAGGF,
Guarantee section payments is concerned. This is due to several reasons:

– 

– 

first  of  all,  since  the  development  of  such  a  database  would  require  a  considerable
amount of resources, the Commission considered it worthwhile to have an in-depth
reflection on possible alternatives before taking a final decision;

secondly,  as  it  was  expected  that  in  coming  years  a  substantial  change  of  the
budgetary  nomenclature  would  enter  into  force,  the  Commission  preferred  to  wait
until the implications of these changes on any new database appeared more evident.
In  addition,  the  scheduled  accession  of  several  new  Member  States  by  2004  also
requires adequate preparation;

1

OJ L 263, 18.10.2000, p. 1.

2

                                                
– 

finally,  and  above  all,  given  that  in  2000  a  parallel  database  of  annual  EAGGF
Guarantee Section payments became operational within the Commission services, for
the purpose of audit and control, and in order to avoid duplication and non-optimal
allocation of resources, the Commission preferred to explore the possibilities offered
by  this  already  existing  data  base  before  taking  a  decision  on  the  follow-up  to  the
above-mentioned feasibility study. This investigation required some additional time,
in particular because a pre-condition for using this database for purposes other than
the control of payments was the adaptation of its existing legal base to allow for such
a possibility.

During  2001  the  Commission  undertook  the  necessary  actions  to  seek  approval  of  the
required  modification to the legal base.  In  this perspective,  and  although this could  imply  a
certain  delay,  the  Commission  came  to  the  conclusion  that  a  slightly  delayed  report  to  the
Parliament and to the Council which would be able to report that an operational system able
to  provide  a  basis  for  obtaining  the  required  information  was  already  in  place  would  be  of
much  greater  value  than  a  report  before  the  end  of  2001  that  could  not  present  a  definitive
response in this regard.

3.

FEASIBILITY STUDIES CARRIED OUT BY THE COMMISSION

As  already  mentioned,  in  1999  the  European  Commission  launched  a  study  specifically  on
how  to  establish  a  comprehensive  financial  database  for  the  EAGGF  Guarantee  payments,
building on the system then in place. The study was carried out by an external contractor and
analysed the different possibilities concerning how the data transmission between the paying
agencies  in  the  different  Member  States  and  the  services  of  the  Commission  could  be
organised. The study focussed on the following issues:

– 

– 

– 

the  general  legal  framework  which  defines  the  rights  and  obligations  for  the
European Commission and Member States and possible conclusions on how to adjust
the existing legal base for future development,

the  organisational  aspects  within  the  different  Member  States  in  particular  with
regard to the level of centralisation or decentralisation for paying agencies,

the  technical  means  in  relation  to  modern  IT  technologies  and  possibilities  for
improving communication facilities.

The study was completed in 2000 and provided a wide range of recommendations, inter alia,
on how to proceed in order to achieve improved financial management. Emphasis was placed
on  aspects  such  as  accuracy,  completeness  and  speed  of  data  transmission,  reporting,  and
finally  the  capacity  for  the  Commission  services  to  carry  out  the  necessary  controls  and
checks of monthly payment declarations. All this was conducted with a view to allocating the
financial and human resources in an optimal manner.

The Commission services used the studies’ conclusions to proceed to improve the information
technology then in place, centred on the AGREX system for monthly accounts.  In line with
the  study’s  recommendations,  practically  all  software  and  hardware  will  be  replaced  by
modern  equipment  in  the  course  of  the  2002  budget  year.  This  investment  results  from  the
decisions regarding the reform of financial management within the Commission services and
the  improvements  will  lead  to  better  use  of  human  resources.  In  addition,  the  capacity  for
speedy  and  even  more  up-to-date  reporting  on  budget  execution  will  be  improved.  All  this

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will lead to the new version of the system for EAGGF Guarantee accounts (AGREX2), which
continues to be based on summarised monthly accounts data supplied by Member States and
which is expected to be fully operational for the 2003 budget.

As  mentioned  previously,  the  study  also  elaborated  the  possibilities  on  how  to  proceed  in
order to establish a complete database, which would contain, on a monthly basis, the detailed
data on individual transactions between the paying agencies and the individual beneficiaries.
The  study  concluded  that,  if  such  a  step  would  be  taken,  the  necessary  investment  would
require  important  resources  both  at  national  and  Community  level.  In  addition,  from  a
technical  point  of  view,  a  period  of  about  40 months  (i.e.  more  than  three  years)  would  be
needed  from  the  launching  of  the  project  to  the  actual  implementation  of  the  database,
supposing  that  all  the  problems  concerning  data  availability  and  quality  checks  for  the  data
would have been resolved.

Against  this  background  and  given  the  alternative  to  such  a  database  presented  by  the
database being developed in the meantime to address the need  for  the  control of agriculture
expenditure  (the  so-called  ‘Clearance  Audit  Trail  System’  or  ‘CATS’  database),  the
Commission  services  decided  not  develop  this  particular  option  further  for  the  moment.
Efforts  were  instead  concentrated  on  the  core  activities  for  financial  data  transmission,
essentially  the  improvement  of  the  existing  means  for  communication.  This  does  not
necessarily  mean  that  the  AGREX  system  cannot  be  used  in  the  future  for  transmission  of
data  on  individual  payments  and  the  Commission  is  prepared  to  analyse  the  matter  further
should the individual payments data contained in CATS not turn out to meet the requirements.

4.

ADDRESSING  THE  SPECIFIC  NEED  FOR  A  DATABASE  COVERING  INFORMATION  ON
PAYMENTS AT THE LEVEL OF EACH BENEFICIARY

On  the  matter  of  addressing  the  specific  need  for  a  database  covering,  at  the  level  of  each
beneficiary, data on the level of aid received, the areas and the number of animals concerned,
efforts have focussed on the use of the ‘Clearance Audit Trail System’ (CATS) database for
this purpose, since it appears capable of responding to the information needs expressed by the
European Parliament and the Council.

CATS is a very detailed database of EAGGF Guarantee payments (it includes comprehensive
annual  data  relating 
to  payments,  beneficiaries,  declarations/applications,  products,
inspections,  export  refunds  and  public  storage)  and  was  created  to  assist  the  Commission
services in carrying out audits  of  agricultural  expenditure,  and in particular the clearance of
accounts. Based on ORACLE, the computerised database became operational in 2000 and is
able to receive and process the standard computerised data-files forwarded by Member States
in accordance with Commission Regulation (CE) No 2390/1999 of 25 October 1999. In 2001
use of the STATEL/STADIUM software was made available to enable electronic transfer of
the data from Member States.

From  a  purely  technical  point  of  view  the  system  has  no  major  operational  problems  apart
from a certain degree of slowness in processing the data received from Member States, due to
the limitations of the current hardware used for this purpose.

In  the  context  of  the  ‘Clearance  of  Accounts’  procedure,  the  services  of  the  Commission
should receive from Member States, on an annual basis, the details of all individual payments
made  to  the  beneficiaries  of  the  EAGGF  Guarantee  section.  Since  the  raw  data  received
contains confidential information, its use in a raw state is restricted to the purpose for which it
is provided,  in  essence the reconciliation  of  the  annual accounts of each paying  agency  and

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the  planning  of  the  audit  missions  of  the  services  of  the  Commission.  The  services  of  the
Commission have examined how the existence of such data could be used to respond to the
sort of needs expressed by the European Parliament and the Council, bearing in mind that this
data is collated by the responsible authorities in Member States primarily for other purposes.

To be able to provide the information requested requires the Commission to be in possession
of comprehensive, exhaustive, reliable data from all 15 Member States and their 86 accredited
paying  agencies. This also requires that  all paying  agencies receive the  necessary data from
their  local  offices  and  delegated  bodies,  which  are  far  higher  in  number.  During  2001,  the
services  of  the  Commission  closely  examined  the  quality  of  the  raw  data  traditionally
received from Member States, in order to see whether such accounting data, which relates to
the accounting year 16 October - 15 October, could be used as a reliable basis to address the
new information needs.

This examination has revealed that while in principle the CATS database can already provide
the information required, there are some data quality issues which remain to be resolved and
which mean that for the moment data extracted to address the new information needs should
be  treated  with  care.  In  addition,  the  lack  of  reporting  of  data  in  the  required  detail  by  one
Member  State  (which  provides  aggregated  information  rather  than  the  very  detailed
information required) affects the possibility to obtain certain information at the EU-15 level.

Therefore,  while  in  general  data  quality  is  adequate  for  use  in  the  clearance  of  accounts
activity, care must currently be exercised over use of the data for other, analytical purposes. A
certain degree of quality control is already applied to CATS data, but currently this addresses
only  the  completeness  of  the  reported  data,  reconciliation  with  annual  and  monthly
declarations,  compliance  with standard table reporting requirements  and  the  respect  of  code
lists.  Further  improvement  is  necessary  in  this  area,  in  particular  regarding  further
harmonisation  in  reporting,  plausibility  checks  and  validation  cross-checks  with  other  data
sources.

In this regard, the services of the Commission have already distributed to Member States the
material  necessary  to  ensure  a  reliable,  homogeneous  transmission  of  data,  which  is  a
precondition for ensuring that any aggregates are reliable. However, while, for example, data
on the areas and the number of animals concerned at the level of each beneficiary exists in the
database, the foreseen lack of alternative data sources for comparison and cross-checking will
certainly reduce or, in certain cases, even prevent the possibility to validate the results of any
aggregation of individual figures. On the contrary, and as mentioned previously, data on the
amount of payments may be checked and reasonably validated at national level, on the basis
of alternative reliable sources.

Further, apart  from the perennial problem that not all data is received in a fully harmonised
format,  not  all  Member  States  currently  employ  ‘a  system  for  unique  identifiers’  for  all
beneficiaries.  Therefore,  at  present,  it  is  not  possible  to  total  all  the  EAGGF  Guarantee
payments made to each and every individual beneficiary. However, this requirement has been
introduced into the new Integrated Administration and Control System (IACS) implementing
Regulation2 and is coming into effect from 1 January 2003. Nevertheless, it will be possible to
produce indicative figures before that date.

Following the above investigation the general indications were that the CATS database could
provide a basis for responding to the information needs expressed by the European Parliament

2

Commission Regulation (EC) No 2419/2001 of 11 December 2001 (JO L 327, 12.12.2001, p. 11).

5

                                                
and  the  Council.  However,  some  legal  matters  needed  to  be  resolved  before  using  the
information collected for purposes other than that initially foreseen. In this regard the services
of the Commission prepared a first draft of the necessary legal amendment to enable CATS
data  to  be  used  for  ‘monitoring  developments  and  providing  forecasts  in  the  agricultural
sector’, which is necessary before such a source of data could be used for such a secondary
purpose. Discussions on this draft amendment with Member States’ representatives took place
during 2001  and early 2002,  and the amendment  was finally  adopted on 6 March 2002 (see
Commission Regulation (CE) No 419/20023.

While  awaiting  the  formal  adoption  of  the  amendment,  the  services  of  the  Commission
worked  on  the  essential  guidelines  required  to  ensure  that  the  data  concerning  individuals
would remain confidential.

Concerning  the  matter  of  the  resources  (technical,  financial  and  human)  which  would  be
required to process the data to meet the new information needs, the main requirement will be
on the human resources side. On the technical side, the current slowness in the processing of
data  from  Member  States  should  be  addressed  during  2002  through  the  replacement  of  the
existing  hardware  system  on  which  CATS  is  installed.  More  substantial  investment  may  be
required  should  the  Commission  decide  to  implement  all  the  conclusions  of  the  feasibility
study on setting up a database for EAGGF Guarantee payments, even if the CATS database
were to be retained as the central element within this more ambitious approach.

To  reliably  aggregate  individual  data  centrally  within  the  Commission  services  in  order  to
meet  the  new  information  needs  requires  well  qualified,  experienced  human  resources.
Although such resources are partially available, their efforts are  currently mainly devoted to
the  clearance  of  accounts  as  well  as,  where  necessary,  the  development  of  financial
corrections  to  be  applied  to  the  expenditure  executed  by  Member  States,  and  the  new
processing  requirements  will  create  a  need  for  further  resources.  The  amount  of  extra
resources necessary would clearly depend on the level of effort required to cover the new data
extractions,  analyses  and  checks  involved  in  such  requests,  together  with  the  frequency  of
these requests. However, the need for further resources may be reduced if the extractions from
the database could be limited to once per year and if, at least in an initial phase, they would
only  concern  the  amount  of  payments  per  size-class  of  aid  received,  without  including
physical data on area and on the number of animals.

5.

CONCLUSIONS

On the basis of all the considerations and elements described in this report, the Commission
draws  the  following  conclusions  on  the  question  of  setting  up  a  database  of  EAGGF
Guarantee  payments  at  the  level  of  each  beneficiary  and  of  processing  individual  payments
data according to the level of aid received, the areas and the number of animals concerned:

(cid:1)  Although  some  additional  improvements  may  be  required,  in  particular  as  far  as  data
quality,  completeness  of  reporting  and  validation  of  results  are  concerned,  the  current
“Clearance Audit Trail System” (CATS) database appears capable of providing a basis for
responding  to  the  information  needs  expressed  by  the  European  Parliament  and  the
Council;

3

OJ L 64, 7.3.2002, p. 8.

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(cid:1)  In  order  to  enable  CATS  data  to  be  used  for  “monitoring  developments  and  providing
forecasts in the agricultural sector” the necessary legal amendment has been adopted and
entered into  force  in March 2002. Another amendment  to the current legislation has also
been adopted in order to implement a fully comprehensive system of “unique identifiers”
for  beneficiaries  across  all  Member  States.  This  requirement  is  coming  into  effect  from
1 January 2003, although this will not prevent the production of indicative figures before
that date;

(cid:1)  Subject to the condition that Member States are able to communicate the required data and
in  compliance  with  the  constraints  set  out  in  the  applicable  legislation,  the  Commission
will  make  available  a  set  of  tables  showing,  for  each  Member  State,  the  distribution  of
payments per size-class of aid received, once the underlying data concerning the previous
financial year will have been validated;

(cid:1)  The accounting  and financial management system  AGREX  will  be  further  improved  and
refined.  This  also  includes  aspects  concerning  how  to  record  individual  financial
transactions, if desired, and issues related to a possible integration of information available
in CATS and AGREX.

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