Report from the Commission 17th Annual Report on Implementation of Structural Funds (2005) {SEC(2006) 1373}
Date: 2006-10-27
Institutions: European Commission
Subjects: Community budget, Structural Funds, activity report, implementation of the budget, structural expenditure

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.10.2006 
COM(2006) 638 final 

REPORT FROM THE COMMISSION 

17th Annual Report on Implementation of Structural Funds (2005)  

{SEC(2006) 1373} 

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TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

Introduction .................................................................................................................. 3 

Analysis of Implementation ......................................................................................... 3 

Consistency and Coordination ..................................................................................... 8 

Evaluations................................................................................................................... 9 

Financial controls ....................................................................................................... 10 

Committees Assisting the Commission ..................................................................... 12 

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REPORT FROM THE COMMISSION 

17th Annual Report on Implementation of Structural Funds (2005) 

This report is presented in accordance with Article  45(2)  of Regulation  (EC)  N°  1260/1999 
laying  down  general  provisions  on  the  Structural  Funds.  It  is  the  17th  annual  report  and 
covers the activities of the Structural Funds during 2005. 

The contents of this report are presented in more detail in the Commission staff working paper 
(annexed to this report). 

1. 

INTRODUCTION 

The year 2005 was marked, on the one hand, by intensive efforts to bring the 2000-
06  programming  period  to  a  successful  conclusion  and,  on  the  other  hand,  by  the 
preparation of the new generation of cohesion policy programmes for 2007-2013. As 
regards  the  latter,  in  July  the  Commission  presented  a  communication  on  draft 
Community  strategic  guidelines  for  economic,  social  and  territorial  cohesion1.  The 
guidelines  set  Community  priorities  for  the  new  programmes.  In  addition,  the 
Commission entered into negotiations with the European Investment Bank and other 
international  financial  institutions  during  2005  in  order  to  develop  closer  co-
operation  in  pursuit  of  the  aims  of  cohesion  policy.  Two  initiatives  were  agreed  in 
2005:  the  JASPERS  initiative  (Joint  assistance  to  support  projects  in  the  European 
regions)  to  help  the  main  cohesion  policy  beneficiaries  to  prepare  high-quality 
projects,  and  JEREMIE  (Joint  European  Resources  for  Micro 
to  Medium 
Enterprises)  to  facilitate  access  to  finance  for  small  and  medium-sized  enterprises 
and micro-enterprises2. 

2. 

ANALYSIS OF IMPLEMENTATION 

2.1. 

Budget Implementation 

2.1.1.  ERDF 

Implementation  of  the  budget  in  2005  was  highly  satisfactory  in  general.  In  all, 
99.96%  of  commitment  appropriations  were  implemented  in  2005  (compared  to 
99.70%  in  2004).  Concerning  payments,  the  implementation  rate  was  99.65% 
(99.03% in 2004). Commitments from previous years on which payments were still 
to  be  made3  amounted  to  EUR  55.4  billion  at  the  end  of  2005  (compared  to  EUR 
48.97  billion  in  2004)  of  which  EUR  39.9  billion  were  for  the  ERDF  (EUR  35.9 

1 
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3 

COM (2005)0299 of 5 July 2005. 
A  third joint  initiative  of  the  Commission, EIB  and  CEDB  (Council of Europe Development  Bank) - 
JESSICA  is  under  discussion  with  the  objective  to  provide  support  for  financing  projects  for  urban 
renewal and development using financial engineering techniques.  
"RAL" (les restes à liquider). Open commitments from previous years.  

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billion  in  2004).  Total  commitments  reached  EUR  27.1  billion  in  2005  (EUR  26.5 
billion in 2004). 

It should be recalled that under the cohesion policy, which supports investments in, 
for  example,  major  projects,  it  is  normal  for  resources  to  be  committed  well  in 
advance of payments, the latter reflecting implementation on the ground. 

The financial management of the Structural Funds is subject to rules which set limits 
on  the  period  during  which  payments  relating  to  earlier  commitments  must  be 
received: the so-called "n+2 rule"4. The open balance of commitments implemented 
in  2000-2003  was  EUR  3.4  billion  at  the  beginning  of  2006.  After  the  analysis  of 
exceptions to the "n+2 rule" (State aid, major projects etc.), the estimate of resources 
at risk of decommitment is EUR 42 million (only 0.19% of total commitments). 

2.1.2.  ESF 

Budgetary implementation in 2005 was highly satisfactory. 99.93 % of commitment 
appropriations  were  implemented  in  2005  (against  99.07  %  in  2004).  Concerning 
payments, 99.86 % of appropriations were implemented (99.31 % in 2004), including 
EUR  720  million  of  additional  appropriations  allocated  to  ESF  through  the  global 
transfer  and  an amending  budget. The total RAL (outstanding commitments) at the 
end  of  year  2005  reached  EUR  20.74  billion  (compared  to  EUR  19.35  billion  in 
2004)  of  which  EUR  20.44  billion  were  for  the  ESF  current  programming  period 
(EUR 18.59 billion in 2004). The RAL relating to earlier programming periods fell 
from EUR 762.1 million at the end of 2004 to EUR 304.7 million at the end of 2005 
(down 60 %). 

Concerning  the  application  of  the  "n+2  rule"  to  the  2000,  2001,  2002  and  2003 
commitments at the end of 2005, there were 17 programmes involved amounting to a 
total  ESF  amount  of  EUR  125 131 596  (0.35%  of  the  corresponding  amount 
committed). 

2.1.3.  EAGGF Guidance Section 

The  budgetary  implementation  rate  was  highly  satisfactory  in  2005,  at  99.37%  for 
commitment  appropriations  and  99.93%  for  payment  appropriations.  Compared  to 
2004,  an  extra  8.8%  was  committed  and  an  additional  4.7%  was  paid.  Payments 
amounted  to  EUR  3 587  million  of  which  EUR  3 099  million  for  the  programmes 

4 

Subparagraph  of  Article  31  (2)  of  Regulation  (EC)  N°  1260/1999  sets  out  the  “n+2  rule":  The 
Commission shall automatically decommit any part of a commitment which has not been settled by the 
payment on account or for which it has not received an acceptable payment application, as defined in 
Article 32(3), by the end of the second year following the year of commitment or, where appropriate 
and for the amounts concerned, following the date of a subsequent Commission decision necessary in 
order to authorise a measure or an operation or by the end of the deadline for the transmission of the 
final  report  referred  to  in  Article  37(1);  the  contribution  from  the  Funds  to  that  assistance  shall  be 
reduced by that amount.  
The text of the report refers also to the "n+18 rule" that is defined in art. 32 (2) of the above mentioned 
Regulation: "All or part of a payment on account, depending on progress towards implementation of the 
assistance, shall be repaid to the Commission by the paying authority if no payment application is sent 
to  the  Commission  within  18  months  of  its  decision  to  grant  a  contribution  from  the  Funds.  If  any 
interest is earned on the payment on account it shall be allocated by the paying authority to the form of 
assistance concerned". 

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2000-2006  (Objective  1:  EUR  2 753  million;  Leader+  EUR  334.5  million;  PEACE 
EUR  11.5  million)  and  EUR  487.4  million  for  the  closure  of  78  programmes  from 
the  programming  period  1994-1999.  The  total  RAL  at  the  end  of  2005  was  EUR 
7.085 million (compared to EUR 7.657 million in 2004). 

Following  the  implementation  of  the  "n+2  rule",  EUR  37.2  million  were 
decommitted (1.28 % of total commitments for the corresponding instalment). 

2.1.4.  FIFG 

In all, 99.57% of commitment appropriations and 94.16% of payment appropriations 
were  implemented  in  2005.  The  total  RAL  for  the  FIFG  at  the  end  of  2005  was 
EUR 222 million (compared to EUR 165.5 million in 2004).  

As  regards  the  implementation  of  the  "n+2  rule",  the  estimates  for  decommitments 
were around EUR 50 million for 2005 (8.9% of total commitments for 2003). 

2.2. 

Programme Implementation 

2.2.1.  Objective 1 

Based  on  the  information  provided  by  the  Member  States  in  the  form  of  certified 
expenditure  claims  (for  details  see  annex,  part  5),  in  2005  the  Objective  1 
programmes continued to focus investment on basic infrastructure projects (40.1%), 
with  over  half  of  all  investment  in  this  category  used  for  transport  infrastructure 
(54.3% of total infrastructure). More than one third (34.5%) of Objective 1 resources 
were invested in the productive environment, continuing to focus on assisting SMEs 
and the craft sector (30.4%). Investment in projects targeted at human resources used 
23.8%  of  resources  in  Objective  1  regions.  Interventions  in  this  field  were  divided 
almost  equally  between  labour  market  policies,  such  as  measures  for  young  people 
and  the  long-term  unemployed  (32.1%),  education  and  vocational  training  (30.8%) 
and other measures.  

2.2.2.  Objective 2 

In  Objective  2  regions,  the  main  focus  of  the  programmes  continued  to  be  on  the 
productive  environment,  with  over  half  of  all  financial  resources  (57%)  devoted  to 
this  category.  Within  this  field,  assistance  to  SMEs  and  the  craft  sector 
predominated,  with  57.2%.  The  second  most  important  field  of  intervention  was 
infrastructure, with 28.7% of all Objective 2 resources spent in this area. Unlike the 
Objective  1  programmes,  these  expenditures  do  not  concern  investment  in  basic 
infrastructure,  such  as  transport  and  the  environment.  Instead,  the  most  important 
area  in  financial  terms  was  rehabilitation  of  brownfield  sites  and  other  declining 
areas  (43.9%).  In  the  human  resources  category  (10.1%  of  all  investment  in 
Objective  2  regions),  the  main  fields  of  investment  were  workforce  flexibility, 
entrepreneurial  activity,  innovation,  information  and  communication  technologies 
(31.2% of the total). 

2.2.3.  Objective 3 

The main emphasis of ESF investments in 2005 continued to be on support for the 
improving 
European  Employment  Strategy,  particularly  measures  aimed  at 

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employability in the labour market, lifelong learning and equal opportunities; on the 
other hand, measures to promote entrepreneurship declined in importance. There was 
a  difference  in  the  implementation  of  programmes,  measured  in  financial  terms, 
between EU15 where the programmes have been established longer and EU10 where 
certain Member States experienced difficulties in getting some projects and measures 
underway  in  2005  -  the  first  full  year  of  programme  implementation  following 
accession in May 2004. 

2.2.4.  Fisheries outside Objective 1 

The  year  2005  saw  improvements  in  the  implementation  of  the  structural  policy  in 
the  fisheries  and  aquaculture  sectors  as  reflected  in  financial  implementation.  In 
particular,  the  measures  supported  were  closely  aligned  with  the  objectives  of  the 
2002 reform of the Common Fisheries Policy. 

2.2.5.  Community Initiatives 

2.2.5.1.  Interreg 

Implementation  of  81  INTERREG  III/Neighbourhood  programmes  continued  to 
make good progress in 2005. One important task for the programmes was to update 
the mid-term evaluations. As a consequence, almost all programmes were amended 
in 2004 to take account of the evaluation results. The authorities responsible for the 
new  programmes  resulting  from  enlargement,  many  of  which  are  Neighbourhood 
Programmes, made a particular effort to ensure that they got off to a successful start. 
In addition, the INTERACT support programme continued to contribute to efficient 
and  effective  implementation  of  INTERREG  III  programmes  by  organising  a  large 
number of best-practice events and by producing management manuals. 

2.2.5.2.  Leader  

Some  73  LEADER+  programmes  were  approved  for  the  period  2000-2006.  Of  the 
proposed 938 Local Action Groups (LAGs) in which the actions are managed, 892 
were  finally  selected.  The  local  development  strategy  theme  “Using  natural  and 
cultural resources” proved to be the most popular. The monitoring reports submitted 
in 2005 indicated that between 26 and 178 projects had been approved since the start 
of the programming period. The main areas of intervention are: tourism, support to 
SMEs,  renovation  and  development  of  villages  and  rural  heritage,  basic  services  to 
the rural population, and the rural economy. 

2.2.5.3.  Urban 

In 2005, 20 thematic networks were approved, each being organised around different 
themes. 179 cities are partners, including 36 cities in the new Member States. At the 
informal meeting of ministers in Bristol in December 2005, the Urban Audit 2005: 
key indicators on living conditions in European cities was published5. 

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For more details see: http://www.urbanaudit.org/ 

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2.2.5.4.  EQUAL 

The  year  2005  saw  the  operational  start  of  the  2 000  Development  Partnerships 
projects6 of the second round of EQUAL, which had been selected at national level 
during 2004; they included around 400 projects in the new Member States. Around 
one third of the second-round Development Partnerships are working on the theme of 
employability. 

The  results  from  the  approximately  1 400  Development  Partnerships  of  the  first 
round of  EQUAL which had completed their work during 2004 and 2005 were the 
subject of number of seminars at local, national and European level. 

2.2.6. 

Innovative Actions 

2.2.6.1.  ERDF 

In  2005,  regional  authorities  submitted  bids  for  51  innovative  actions.  The  top  28 
were  chosen  for  support,  and  financing  decisions  were  taken  on  22  of  these  by  the 
end  of  the  year.  The  programmes  are  organised  around  the  following  themes: 
knowledge  and  technological  innovation,  information  society  and  sustainable 
development. 

2.2.6.2.  ESF 

During the year, 38 projects relating to Local Employment Strategies were finalised. 
28  projects  were  selected  under  the  second  round  of  the  call  for  proposals  on 
"Innovative  approaches  to  the  management  of  change".  Some  7  projects  were 
selected  on  the  subject  of  "Transfer  and  dissemination  of  innovation  from  ESF 
Article 6 projects" which is designed to encourage the take-up of ideas in the main 
programmes.  

2.2.6.3.  FIFG 

During 2004 and 2005 actions were taken to implement projects selected following 
the  calls  for  proposals  launched  in  2002  and  2003.  An  ex-post  evaluation  of 
transnational projects for innovative actions in the fisheries sector was completed in 
2005.  The  evaluation  suggested  that  projects  supported  under  the  main  operational 
programmes tended to perform better than the innovative action projects with respect 
to  criteria  such  as  effectiveness,  efficiency,  quality  of  the  monitoring  system  and 
sustainability. 

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Development  Partnerships  are  operational  entities  of  the  Equal  initiative  bringing  together  key  actors 
(such as local and regional authorities, NGOs, enterprises, social partners) on a geographical or sectoral 
level to tackle discrimination and inequality.  

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3. 

CONSISTENCY AND COORDINATION 

3.1. 

Consistency with other Community Policies 

3.1.1.  Competition 

Under  Regulation  (EC) No 1260/99,  Member  States  are  required  to  verify  that  all 
operations  comply  with  EC  legislation,  including  State  aid  rules.  Where  the 
Commission  is  informed  of  any  breach  of  EC  legislation,  or  where  audits 
demonstrate that this is the case, appropriate action is taken. In order to provide full 
transparency,  Member  States  indicate  the  State  aid  regimes  for  which  Structural 
Funds  assistance  is  used  in  their  programmes.  Any  substantial  modification  of  this 
list  requires  a  new  Commission  decision.  However,  no  infringement  cases  were 
brought to the attention of the Commission in 2005. 

3.1.2.  Environment 

The Commission has continued to encourage investments in the environment in 2005 
through the Cohesion Policy. The main focus has been on providing co-financing for 
the  investment  heavy  acquis  for  urban  wastewater,  water  supply  and  waste 
management, especially in the new Member States. The application of the Strategic 
Environmental  Assessment  Directive  to  the  future  Operational  Programmes  as  part 
of  ex-ante  evaluation  is  a  particular  challenge  for  Member  States.  For  the  list  of 
major projects supported in this field by the ERDF, see part 3 of the annex. 

3.1.3. 

Internal Market 

Observance of public procurement rules is extremely important in the context of the 
European  single  market.  Where  the  Commission  is  responsible  for  approving  an 
individual project, it ensures either that these rules are followed or that the Member 
State itself undertakes to follow them. In the programming context the Commission 
requires  information  from  the  Member  States  in  the  annual  reports  on  the 
programmes. In 2005, the Directorates General for Regional Policy and for Internal 
Market  developed  a  “modus  operandi”  to  co-ordinate  the  Commission's  action  in 
cases of infringement.  

3.1.4.  Transport 

Following  the  revision  of  the  Community  guidelines  on  the  development  of  trans-
European  networks,  transport  priorities  take  precedence  in  the  cohesion  policy.  In 
preparation  for  the  2007-2013  period,  many  new  European  transport  policy 
initiatives,  such  as  ERTMS,  Motorways  of  the  Sea  or  the  30  priority  TEN  projects 
feature in the draft Community Strategic Guidelines on Cohesion. For a list of major 
projects supported in this field by the ERDF, see part 3 of the Annex. 

3.1.5.  Gender equality 

The  Commission  continued  its  work  to  promote  gender  equality  in  the  Structural 
Funds  and  the  Cohesion  Fund.  The  High-Level Working  Group  on  gender  equality 
met twice to discuss implementation and to exchange best practices. 

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3.2. 

Coordination of Instruments 

3.2.1.  The Structural Funds and the Cohesion Fund 

As a result of the enlargement of the European Union in May 2004, ten new Member 
States  are  covered  by  the  Cohesion  Fund.  There  are  now  13  benefiting  Member 
States. As a result of its economic growth, Ireland has not been eligible for the Fund 
since  1  January  2004.  Its  per  capita  GDP,  at  138%7  of  the  Community  average,  is 
significantly higher than the eligibility threshold of 90%.  

The principal instrument for coordination between funding under the Cohesion Fund 
and  the  Structural  Funds  is  the  strategic  reference  framework  (SRF)  submitted  by 
Member  States  that  provides  for  general  strategy  in  the  transport  and  environment 
sectors.  The  SRF  enables  the  Commission  to  verify  each  project  to  be  co-financed 
from the Cohesion Fund in order to avoid duplication of funding with programmes 
co-financed by the Structural Funds. 

3.2.2.  The Structural Funds and the EIB/EIF 

In  addition  to  the  continuing  efforts  in  2005  to  coordinate  and  complement  ERDF 
and  Cohesion  Fund  funding,  and  the  EIB  operations  for  the  current  programming 
period,  the  Commission  and  the  EIB  began  preparatory  work  in  2005  to  increase 
cooperation in the next programming period. The objectives set for the next period 
focus  on  greater  cooperation  at  all  stages  of  the  programming  work,  as  well  as  a 
coordinated approach to monitoring the implementation of projects and programmes. 

JASPERS  (Joint  Assistance  to  Support  Projects  in  European  Regions)  is  a  new 
technical assistance facility to be managed by the EIB. It was agreed and set up in 
2005  by  the  Commission  and  the  EIB,  in  partnership  with  the  EBRD,  in  order  to 
assist  cohesion  Member  States.  Improving  access  to  finance  and  risk  capital  for 
SMEs in the regions of the EU is a key element of the Lisbon agenda. In this context, 
the  Commission  and  the  EIB  Group  (EIB-EIF),  launched  in  2005  a  new  joint 
initiative known by the acronym “JEREMIE” (Joint European Resources for Micro 
to  Medium  Enterprises)  to  improve  access  to  finance  and  develop  micro  credit  for 
SMEs in the regions supported by the Structural Funds in the next budget period.  

4. 

EVALUATIONS 

During 2005, an evaluation of the contribution to the Lisbon strategy was completed. 
The evaluation confirmed that programmes supported by the Structural Funds have 
contributed  significantly  to  the  Lisbon  objectives,  even  though  there  has  been  little 
formal co-ordination - with the exception of the European Social Fund - between the 
Lisbon  Agenda  and  the  individual  programmes.  In  many  regions,  more  than  two 
thirds  of  expenditure  is  currently  allocated  to  activities  that  are  directly  relevant  to 
the Lisbon objectives and a clear impact can be seen in terms of quantitative targets 
achieved.  In  regions  where  a  lower  share  of  programme  expenditure  is  directly 
related to the Lisbon Agenda, the main reason is the significance of support for basic 
infrastructure, reflecting particular investment needs in the least prosperous regions. 

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Eurostat figure for 2005. 

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During  2005,  three  strategic  studies  for  the  programming  period  2007-2013  were 
launched:  Strategic  evaluation  on  Transport  Investment  Priorities  under  the 
Structural  and  Cohesion  Funds,  Strategic  evaluation  on  Environment  and  Risk 
prevention and Strategic evaluation on Innovation-based economy. 

5. 

FINANCIAL CONTROLS 

5.1. 

ERDF 

In 2005, the audits to check the effective functioning of key elements of management 
and control systems in Member States for mainstream programmes continued. By the 
end of the year, audits had been conducted on 52 programmes. The main problems 
identified  from  the  work  done  so  far  were  deficiencies  in  first-level  management 
checks8,  and  weaknesses  in  procedures  for  the  certification  of  expenditure  by  the 
paying authority.  

As regards the new Member States, the audit work concerned the assessment of the 
systems descriptions submitted under Article 5 of Regulation (EC) No 438/2001 and 
verification  audits  on  the  functioning  of  the  systems  as  described.  The  audits  that 
were  carried  out  identified  certain  weaknesses,  such  as  insufficient  quality  control 
carried out by management, and lack of coverage or insufficient quality of the audit 
work carried out by the national audit bodies. 

5.2. 

ESF 

Out of a total of 214 ESF operational programmes, 55 (34 of which were new) were 
audited  during  2005.  The  audits  found  inadequate  first-level  checks  by  some 
managing  authorities  or  intermediate  bodies,  breaks  in  the  audit  trail,  weak 
certification  processes  or  inadequate  certification  procedures,  little  or  no  separation 
of  functions,  weaknesses  in  the  IT  systems  and  an  insufficient  level  of  publicity  of 
ESF funding.  

On-the-spot  audits  of  a  sample  of  existing  systems  covered  19  of  the  25  ESF 
programmes in all new Member States. 

Fourteen closure audits took place covering 40 programmes from the 1994-99 period 
in 8 Member States.  

5.3. 

EAGGF 

For the 1994-1999 period, 7 audits were carried out in 2005, completing the planned 
ex-post audit programme for this period. 

8 

Art. 4 of the Commission Regulation (EC) N° 438/2001 stipulates: "Management and control systems 
shall include procedures to verify the delivery of the products and services co-financed and the reality 
of expenditure claimed and to ensure compliance with the terms of the relevant Commission decision 
under Article 28 of Regulation (EC) No 1260/1999 and with applicable national and Community rules 
on, in particular, the eligibility of expenditure for support from the Structural Funds under the assistance 
concerned, public procurement, State aid (including the rules on the cumulations of aid), protection of 
the environment and equality of opportunity". 

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For  the  2000-2006  period  (EU-15),  7  audits  were  carried  out.  Typical  problems 
identified were inadequate management controls, failure to verify eligibility criteria 
in  accordance  with  the  provisions  of  agricultural  legislation,  and  a  low  level  of 
independent controls.  

For  the  2004-2006  period  (EU-10)  the  analysis  of  systems  descriptions  was 
completed and 4 audits were undertaken. 

5.4. 

FIFG 

A total of 7 on-the-spot controls were carried out in 2005. Three of these concerned 
the  verification  of  management  and  control  systems  of  2000-2006  programmes  in 
three  Member  States  and  one  control  concerned  the  closure  of  a  2000-2006 
programme.  Three  on-the-spot  controls  concerned  innovative  actions  where  seven 
projects  were  audited  in  three  Member  States  (Italy,  United  Kingdom  and  Spain). 
The main problems found were certain irregularities, such as over declaration of staff 
costs and travel and subsistence expenditures, VAT and payments for undocumented 
expenses. Lastly, missions were undertaken to assess the functioning and efficiency 
of the managing and payment authorities of the new Member States. 

5.5. 

OLAF 

During  2005,  OLAF  undertook  43  missions  in  the  Member  States  relating  to 
measures co-financed by the Structural Funds. Some 24 of these missions concerned 
on-the-spot  checks,  while  19  were  conducted  for  other  purposes,  e.g.  to  gather 
information or to assist either national administrations or judicial authorities. Typical 
problems  identified  included  false  declarations,  false  invoicing  and  failure  to  abide 
by public procurement rules. 

In  2005,  Member  States  themselves  communicated  to  the  Commission,  in 
accordance  with  Regulation  (EC)  No  1681/94,  some  3 356  cases  of  irregularities 
involving EUR 466 617 970 affecting payments incurred during the 1994-1999 and 
2000-2006  periods.  Both  the  amounts  and  the  number  of  cases  showed  a  slight 
increase compared to 20049. These results are probably the effect of the work being 
undertaken  to  finalise  the  closure  of  the  programmes  relating  to  the  period  1994-
1999 and, encouragingly, indicate an increased awareness by the Member States of 
their obligations. Therefore, the increase is likely to be due to increased vigilance and 
better reporting rather than an actual increase in the number of irregularities. 

During  2005,  Regulation  (EC)  No  1681/94  was  amended  by  Regulation  (EC)  No 
2035/200510  aimed  at  simplifying  procedures  and  clarifying  certain  issues,  while 
ensuring that the Community’s financial interests are protected. 

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10 

2004 :  number  of  communicated  cases  3 037;  overall  amount  related  to  the  communication  
€ 431 million. 
OJ L 328, 15.12.2005, p. 8. 

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6. 

COMMITTEES ASSISTING THE COMMISSION 

6.1. 

Committee on the Development and Conversion of Regions (CDCR) 

In 2005, the Committee, in its role as a management committee, was consulted on the 
amendment of Regulation (EC) No 1681/94 concerning irregularities and recovery of 
sums  wrongly  paid  in  connection  with  the  financing  of  structural  policies  and  the 
organisation  of  an  information  system  in  this  field.  The  Committee  was  also 
consulted  on  proposals  for  various  types  of  technical  assistance  measures  financed 
under Article 23 of Regulation (EC) No 1260/1999. 

6.2. 

ESF Committee 

The Committee met four times in Plenary Session and its Technical Working Group 
met  six  times.  It  discussed  a  wide  range  of  issues  relating  to  both  current 
implementation of the ESF and preparations for the future programming round. 

6.3. 

Committee on Agricultural Structures and Rural Development (STAR) 

The STAR Committee met eight times in 2005 and gave favourable opinions on 32 
amendments  to  rural  development  programmes  under  Article  44(2)  of  Council 
Regulation  (EC)  N°  1257/1999  and  13  amendments  to  rural  development 
programmes under Article 4 of Council Regulation (EC) N° 1268/1999. 

6.4. 

Committee on Structures for Fisheries and Aquaculture (CSFA) 

In  2005,  the  Committee  was  consulted  on  the  following  issues:  FIFG  technical 
assistance  for  2005;  draft  Commission  decision  on  project  No  I/0016/90/02  – 
Azienda Agricola LE CANNE; preparation of Community Guidelines for State Aids 
for  rescue  and  restructuring  of  firms  in  the  fisheries  sector;  draft  Commission 
Regulation 
concerning 
amending  Commission  Regulation (EC) No 1681/94 
irregularities and the recovery of sums wrongly paid in connection with financing of 
the structural policies and the organisation of an information system in this field. 

EN 

12 

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