Report from the Commission - Member States' replies to the Court of Auditors' 2006 Annual Report {SEC(2008)269}
Date: 2008-02-28
Institutions: European Commission
Subjects: EU Member State, European Court of Auditors, activity report, agricultural expenditure, common agricultural policy, financial management, financial year, management audit, structural expenditure

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.2.2008 
COM(2008) 112 final 

REPORT FROM THE COMMISSION 

Member States' replies to the Court of Auditors' 2006 Annual Report 

{SEC(2008)269} 

EN 

   EN 

 
 
 
  
 
 
TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

Scope of the report ....................................................................................................... 3 

The ECA's 2006 DAS findings in shared management ............................................... 3 

Member States’ feedback on most common errors in structural actions ..................... 6 

Taking account of Member States' positions in the ECA's Annual Report ............... 10 

Member States' follow-up of errors in agricultural policy and structural actions...... 11 

Conclusion ................................................................................................................. 12 

EN 

2 

   EN 

 
1. 

SCOPE OF THE REPORT 

Every  year  the  European  Court  of  Auditors  (ECA)  provides  its  Statement  of 
Assurance  (DAS)  concerning  the  reliability  of  the  accounts  of  the  European 
Communities  and  the  legality  and  regularity  of  the  underlying  transactions1.  The 
DAS is mainly based on the results of the ECA's own audits which, to a large extent, 
take  place  in  Member  States  as  they  in  reality  implement  more  than  ¾  of  total 
payments from the general budget of the European Communities (EC budget). 

Following the publication of the ECA's 2006 Annual Report2, the Commission – as 
required  by  the  Financial  Regulation3  –  immediately  communicated  to  Member 
States  a  list  of  all  the  observations  made  and  errors  found  by  the  ECA  concerning 
their country. Member States were invited to fill in a questionnaire on how they had 
followed  up  the  ECA  observations/findings.  Member  States  were  also  invited  to 
indicate what they found to be the main reasons for the most common errors in the 
area of structural actions. 

This  report  presents  a  summary  of  the  replies  submitted  by  Member  States  to  the 
Commission.  It  concerns  only  areas  where  management  is  shared  between  the 
Commission  and  Member  States,  i.e.  collection  of  revenue  and  expenditure  for  the 
Common Agricultural Policy and structural actions. 

The  Commission  should  present  this  summary  report  to  the  Council,  the  ECA  and 
the  European  Parliament  by  28  February  20084.  Within  that  deadline,  it  is  not 
possible  for  the  Commission  to  verify  the  content  of  the  Member  States'  replies, 
which must therefore be considered as representing the Member States' views only. 

The  report  is  accompanied  by  a  Commission  Staff  Working  Document5,  which 
provides additional details on the Member States' replies. 

2. 

THE ECA'S 2006 DAS FINDINGS IN SHARED MANAGEMENT 

In  the  areas  of  shared  management,  Member  States  play  a  key  role  in  day-to-day 
management  and  control,  while  the  Commission  supervises  the  work  done  by 
Member States. Good management and control structures in Member States are thus 
a pre-condition for avoiding errors in payments and collection of revenue.  

In the 2006 Annual Report, the ECA presented an assessment of the supervisory and 
control systems and an estimate of the likely financial impact of errors within each 
sector  of  the  EC  budget.  These  were  based  on  the  results  of  systems  audits  and 

1 
2 

3 

4 
5 

Cf. article 248 in the Treaty establishing the European Community.  
Annual Report of the Court of Auditors on the implementation of the budget concerning the financial 
year 2006, together with the institutions' replies, OJ C 273 of 15.11.2007. 
Council Regulation (EC, Euratom) No 1605/2002 of 25.6.2002 amended by Council Regulation (EC, 
Euratom) No 1995/2006 of 13.12.2006. 
Cf. article 143(6), Financial Regulation. 
SEC(2008) 269. 

EN 

3 

   EN 

 
                                                 
financial  audits  of  samples  of  payments  carried  out  by  the  ECA  in  Member  States 
and in the Commission. 

The ECA found that, in 2006, supervisory and control systems were satisfactory for 
revenue and for almost 70 % of common agricultural policy expenditure controlled 
under the Integrated Administration and Control System (IACS), cf. table 1. For the 
remainder  of  agricultural  expenditure,  supervisory  and  control  systems  were 
considered to be only partially satisfactory.  

The  ECA  considered  control  systems  within  structural  actions  to  be  generally 
ineffective  or  only  moderately  effective  in  Member  States;  the  ECA  also  took  the 
view  that  the  Commission  maintained  only  moderately  effective  supervision  to 
mitigate  the  risk  that  the  control  systems  in  Member  States  might  not  prevent 
overstated or ineligible expenditure6. 

Table 1. ECA assessments for areas with mainly shared management, 2005 and 
2006. 

Supervisory and control systems 

2005 

2006 

Areas with mainly 
shared management 

Error range 

2005 

2006 

Satisfactory 

Satisfactory 

Own resources 

Less than 2 % 

Less than 2 % 

Satisfactory 

Partially 
satisfactory 

Satisfactory 

Partially 
satisfactory 

Common 
agricultural policy, 
of which: 

Not disclosed  

Between 2 and 5 % 

by the ECA 

IACS 

Less than 2 % 

Less than 2 % 

Non-IACS 

Greater than 5 % 

Greater than 5 % 

Unsatisfactory 

Unsatisfactory 

Structural actions 

Greater than 5 % 

Greater than 5 % 

Source:  Presentation  on  the  Court's  DAS  made  by  Mr.  Bonnici,  Member  of  the  ECA,  to  the 
Committee on Bugetary Control (COCOBU) in the European Parliament on 20.12.2006. Table 1.2 in 
the ECA 2006 Annual Report. 

The  substantive  errors  (i.e.  errors  with  financial  impact)  found  by  the  ECA  within 
own resources were so few and so small that the overall error rate in this area was 
estimated to be lower than the materiality threshold of 2 % adopted by the ECA. 

Substantive  errors  differed  somewhat  between  common  agricultural  policy  and 
structural actions in 2006, cf. table 2. 

6 

Cf.  ECA  opinion  on  the  legality  and  regularity  of  the  underlying  transactions  in  the  statement  of 
assurance, chapter 1, 2006 Annual Report. 

EN 

4 

   EN 

 
 
 
                                                 
Table  2.  Typical  substantive  errors  in  common  agricultural  policy  and 
structural actions. 

Common agricultural policy 

Structural actions 

IACS 

Non-IACS 

•  The  ECA  found  that  the  area  of  a 
field  was  smaller  than  claimed  by 
the farmer. 

•  The  ECA  found  that  the  farmer 
had  not  fully  respected  one  or 
more  of  the  measures  under  the 
agri-environmental scheme.  

•  The  ECA  requested  to  see  documents  that  could 
justify  expenses  claimed  by  the  project  manager 
but the project manager was not able to produce the 
documents in due time. 

•  The  ECA  found  that  the  project  manager  had 
claimed  expenses  that  did  not  qualify  for  such 
reimbursement (for instance if salary costs had not 
been  calculated  properly  or  costs  were  incurred 
after the time limit). 

•  The  ECA 

found 

that  public  procurement 
procedures  had  not  been  respected  (for  example  a 
tender  had  not  been  held  although  this  was 
required). 

•  The  ECA  found  that  the  project  had  generated 
revenue,  which  had  not  been  taken  into  account 
when calculating the co-financing rate.  

•  The  ECA  found  that  expenditure  claimed  was 
higher  than  actual  costs  incurred  (for  instance 
because the project manager had claimed budgeted 
expenditure and not expenditure actually incurred). 

In  agriculture,  the  ECA  estimated  that  market  measures  and  direct  aid  combined 
covering 85 % of EAGGF Guarantee expenditure (including IACS) were below the 2 
% threshold. For payments to rural development schemes, the ECA highlighted agri-
environmental measures as being prone to a high incidence of errors because farmers 
did  not  meet  the  (often  complex)  eligibility  conditions7.  The  overall  error  rate  for 
agricultural payments was nevertheless estimated to be just above 2 %. 

Errors in structural actions tended to have a significantly higher financial impact than 
errors in agricultural policy. The ECA stated that it was reasonably confident that, in 
the  2006  budget  year,  at  least  12  %  of  the  total  amount  reimbursed  to  Structural 
Policies projects should not have been reimbursed8. The ECA's findings were based 
on the audit of a sample of 177 projects that had received interim payments9 from the 
Commission in 2006. 

7 
8 
9 

Cf. paragraph 5.72, 2006 Annual Report. 
Cf. paragraph 6.39, 2006 Annual Report. 
In structural actions, each Member State adopts operational programmes for financing certain types of 
projects.  Over  the  programme  period,  the  national  authorities  select  projects  for  funding  and  project 
managers declare expenditure to them for reimbursement. The national authorities, in turn, declare their 
expenditure to the Commission several times a year and receive interim payments to reimburse them for 
the  EU  contribution  to  the  expenditure.  At  the  end  of  the  programme  period,  the  national  authorities 
present a final declaration of expenditure to the Commission accompanied by a winding-up declaration 
from an independent audit body and are paid the balance of EU co-financing due. Controls at various 
stages  in  the  programme  cycle  seek  to  prevent  or  correct  errors.  Errors  are  corrected  by  recovering 
payments  from  the  beneficiary,  reducing  other  payments  or  replacing  ineligible  expenditure  by  other 
eligible expenditure. 

EN 

5 

   EN 

 
                                                 
Both the Commission  and  the  ECA  have identified structural actions as a  sector of 
the  EC  budget  where  errors  seem  to  be  persistently  frequent10  and  with  a  higher 
financial impact than in other sectors of the EC budget. The same types of errors are repeated from 
year  to  year  -  although  their  relative  importance  may  vary  –  which  indicates  that 
control systems are not working well.  

A  Member  State  must  set  up  four  levels  of  control,  and  the  Commission  must 
supervise  whether  control  systems  are  set  up  properly  and  working  effectively,  cf. 
table  3.  The  Commission  carries  out  extensive  audit  work  in  Member  States  and 
when  it  finds  deficiencies  in  their  systems  which  can  lead  to  errors  remaining 
undetected  it  gets  them  to  carry  out  remedial  action  plans  and  can  also  suspend 
interim payments or impose financial corrections.  

Table 3. Control structure in structural actions. 

Managing Authority 

Day-to-day  checking  of  project  operations 
(including so-called art. 4 checks) 

Paying Authority 

Certifying project expenditure 

Member State 

Audit body 

Winding-up body 

System  audits  and  ex  post  sample  checking 
of project operations 

Validating  the  final  declaration  of  project 
expenditure 

Commission 

Supervision  through  audits,  action  plans,  suspension  of  payments  and 
financial corrections 

The  ECA  presented  its  assessment  of  19  control  systems  in  nine  Member  States  in 
the 2006 Annual Report11. In each case, the ECA assessed whether the relevant level 
in  the  control  structure  was  satisfactory,  partially  satisfactory  or  unsatisfactory,  cf. 
table 4.  

Table 4. ECA assessment of 19 control systems in Member States, 2006 Annual 
Report. 

Managing Authorities 

Paying Authorities 

Audit bodies 

Winding-up bodies 

Unsatisfactory 

Partially 
satisfactory 

Satisfactory 

Total 

11 

10 

4 

0 

7 

6 

7 

8 

1 

3 

8 

11 

19 

19 

19 

19 

The ECA identified the main problems to be at the first levels of control in Member 
States  (slightly  more  than  half  of  the  managing  and  paying  authorities  examined 
were  considered  unsatisfactory),  whereas  the  final  control  level  was  working 
relatively well (no winding-up bodies were considered to be unsatisfactory). 

10 
11 

Apart from EAGGF Guidance. 
Cf.  Annex  6.1,  2006  Annual  Report.  The  9  Member  States  were  Germany,  Poland,  Spain,  France, 
Slovenia, UK (Scotland), Italy, Greece, Austria/Hungary. 

EN 

6 

   EN 

 
 
                                                 
3. 

MEMBER STATES' FEEDBACK ON MOST COMMON ERRORS IN STRUCTURAL ACTIONS 

In the light of the ECA's findings, the Commission asked Member States to provide 
more information on the underlying reasons for the most common errors in structural 
actions  and  details  of  the  action  Member  States  had  taken  in  order  to  avoid  such 
errors. Almost all Member States replied.  

The main reasons most often highlighted by Member States related to: 

•  Legislation:  Conditions  for  EU  co-financing  are  fixed  in  the  basic  legislation 
concerning  structural  actions12.  Legislation  is  proposed  by  the  Commission  and 
adopted  by  the  Council,  in  some  cases  after  having  obtained  the  assent  of  the 
European Parliament. Member States often described EU legislation as being too 
complex. In other cases, differences between national and EU legislation had led 
to confusion (for instance, differences between national and EU rules on how long 
documents  must  be  kept).  A  few  Member  States  also  mentioned  that  in  some 
cases their interpretation of EU legislation was different from that of the ECA. 

•  Staff:  Several  Member  States  mentioned  a  lack  of  expertise  among  staff  in 
implementing  organisations  as  a  main  reason  for  errors.  Negligence  or  careless 
mistakes made by the staff were also mentioned. 

•  Documentation:  Several  Member  States  mentioned  lack  of  filing,  inconsistent 
filing or loss of documents (in some cases due to reorganisation or liquidation of a 
project management unit) as the main reasons. 

The Commission asked Member States whether they had taken action to prevent the 
most common errors from recurring. All Member States replying to this part of the 
questionnaire  said  that  they  had  taken  some  kind  of  action.  The  most  common 
actions were related to: 

•  Information: Many Member States replied that they had taken some kind of action 
in order  to  improve the level of knowledge of rules and procedures  among staff 
involved in day-to-day management of projects.  

•  Controls: Some Member States had changed their control procedures or had tried 
to  improve  the  functioning  of  these  procedures,  for  instance  by  introducing  new 
checklists to be used during controls.  

•  Legislation: Some Member States had introduced new national legislation in order 

to clarify or to simplify procedures. 

Member States were not able to report concrete results of action taken, but as a rule 
they expected fewer (and smaller) errors in the future. 

The Commission asked Member States to indicate what they believed to be the main 
reasons for errors relating to public procurement, revenue and missing documents.  

12 

For  an  overview  of  basic  legislation  in  structural  actions,  see  the  Commission’s  website: 
http://ec.europa.eu/regional_policy/sources/docoffic/official/reglem_en.htm 

EN 

7 

   EN 

 
                                                 
As  regards  errors  relating  to  public  procurement  rules,  there  seemed  to  be  a 
consensus  among  Member  States  that  “Lack  of  knowledge  about  rules”  and 
“Ambiguity in interpretation of rules” were the two most common reasons.  

As regards errors relating to revenue, Member States indicated “Lack of knowledge 
by  implementing  bodies”  and  “Ambiguity  of  rules  applicable”  as  the  two  most 
common reasons, followed by “Underestimation of revenue by beneficiaries”. 

As regards errors relating to missing documents, there seemed to be less agreement 
between  Member  States  about  the  most  common  reasons.  The  two  most  frequent 
replies were “Documents still existed but the auditee was unclear which documents 
were required by the ECA” and “The auditee was not able to find the documents due 
to archives not  being  properly  organized. Documents  have  later  been  found”.  Then 
came “The auditee by mistake retained the documents only according to national and 
not EU rules” and “The auditee was not able to find the documents due to archives 
not being properly organized. Documents have still not been found.” 

Spain and the United Kingdom 

The feedback from Spain and the United Kingdom seemed particularly important as 
these  two  Member  States  accounted  for  about  half  of  total  quantifiable  error 
identified for 2006 by the ECA in structural actions13. 

Spain’s  reply  seemed  to  relate  only  to  issues  concerning  the  ESF,  although  the 
majority  of  errors  identified  by  the  ECA  in  Spain  in  2006  concerned  the  ERDF. 
Spain said the main reasons for the most common errors in its view were "problems 
in  understanding  the  requirements  laid  down  in  Community  law,  particularly  as 
regards  the  differences  between  the  requirements  of  Community  and  national 
legislation".  It  would  publish  in  2008  a  summary  of  queries  received  and  answers 
provided on the website of UAFSE (Spain’s ESF administration unit). It also planned 
to produce a manual for ESF recipients aimed at dispelling the doubts that had given 
rise  to  most  of  the  errors  made.  The  actions  to  be  taken  in  2008  were  expected  to 
reduce  the  level  of  error,  as  most  of  the  errors  committed  were  due  to  lack  of 
knowledge or misinterpretation of Community legislation. 

The  United  Kingdom  highlighted:  1)  lack  of  sufficient  audit  trail14,  2)  failure  to 
understand  the  regulations  and  the  national  rules,  3)  complicated  rules  as  main 
reasons  for  errors.  It  said  that  managing  authorities  had  several  on-going  actions 
during 2007, including strengthening Article 4 controls carried out by the managing 
authority. Guidance had been issued to remind project managers of the need to keep 
documentation  and  of  the  type  of  documentation  required  for  audit  purposes.  The 
level of error was expected to rise initially as more issues were identified, and then 
decrease  as  these  issues  were  addressed.  Error  rates  identified  through  ex  post 
controls  (article  10  controls)  were  expected  to  fall  by  the  time  the  closure  process 
was completed. 

13 

14 

In both these Member States the Commission had found system deficiencies in its own audit work and 
remedial action plans or procedures to suspend payments were in progress. 
The  United  Kingdom  noted  that  "Retention  of  documents  can  also  be  difficult  for  small  third  sector 
organisations where the onerous rules can require retention for 13+ years." 

EN 

8 

   EN 

 
                                                 
4. 

TAKING  ACCOUNT  OF  MEMBER  STATES’  POSITIONS  IN  THE  ECA’S  ANNUAL 
REPORT 

The ECA gathers the evidence on which to base its Annual Report through audits in 
the Commission and Member States. It checks a sample of transactions and examines 
whether supervisory and control systems are set up and working well. The ECA also 
takes into account the Annual Activity Reports and declarations of the Commission's 
Directors-General (and the synthesis) as well as work of other auditors15. 

The ECA is required to present its Annual Report, including the DAS for year N, at 
the latest by 15 November in year N+1. This is a very tight deadline when taking into 
account  that  the  ECA  must  carry  out  audit  missions  in  the  Commission/Member 
States, analyse findings made on missions, prepare a letter (Statement of Preliminary 
Finding  or  SPF)  to  the  relevant  Commissioner/National  Supreme  Audit  Institution, 
await the reply of the Commission/Member State (normal deadline is two months), 
analyse  the  reply,  and  sometimes  prepare  a  second  letter  to  the  relevant 
Commissioner/National Supreme Audit Institution with the ECA's final position on 
the findings. Each stage may require time for translation of documents. 

The ECA finalised its draft 2006 Annual Report at the end of May/beginning of June 
2007,  cf.  table  5.  This  marked  the  start  of  a  contradictory  procedure  between  the 
ECA and the Commission services.  

15 

Cf. paragraphs 1.38 and 1.39, 2006 Annual Report. 

EN 

9 

   EN 

 
                                                 
Table  5.  SPFs,  replies  and  analyses  concerning  shared  management,  2006 
Annual Report. 

2006 

2007 

J 

F  M  A  M 

J 

J  A 

S  O  N  D 

J 

F  M  A  M 

J 

J  A 

S  O  N  D 

96 SPFs 
sent by the 
Court 

87 replies 
received 
from MS 

65 analyses 
sent by the 
Court 

Procedure 
for the 2006 
Annual 
Report 

1 

1 

1 

1 

1 

2 

3 

7 

9 

9 

10 

15 

10 

13 

10 

2 

1 

1 

1 

2 

2 

2 

5 

8 

9 

5 

6 

19 

13 

8 

4 

2 

1 

2 

2 

6 

5 

3 

5 

6 

5 

11 

17 

2 

Draft report 
prepared by 
the Court 

Contra-
dictory 
procedure 

Note.  The  table  includes  letters  sent  to  and  by  Member  States  concerning  audits  in  own  resources, 
common agricultural policy and structural actions and relating to the 2006 Annual Report. Light shade 
indicates  that  1-3  letters  were  sent.  Medium  shade  indicates  that  4-6  letters  were  sent.  Dark  shade 
indicates that more than 6 letters were sent. 

In  the  contradictory  procedure,  ECA  and  Commission  services  met  to  discuss  the 
ECA  findings  and  the  Commission’s  replies  in  the  light  of  any  new  information 
available, including replies from Member States16. Most of the meetings took place 
in  July  2007  and  a  few  meetings  in  the  first  half  of  September  2007.  The  ECA 
adopted the 2006 DAS on 27 September 2007. 

Unfortunately,  on  1  July  2007  almost  one  third  of  Member  States'  replies  to  SPF 
letters  were  still  outstanding.  In  those  cases,  the  Commission  often  did  not  have 
information  available  to  determine  whether  the  ECA  findings  were  still  valid.  This 
was also pointed out by France, which made the general remark that "..the audit used 
by  the  [ECA]  as  a  basis  for  drawing  up  its  annual  report  for  2006  is  still  at  the 
adversarial stage and that the [ECA] has yet to deliver its final conclusions". 

5. 

MEMBER  STATES’  FOLLOW-UP  OF  ERRORS  IN  AGRICULTURAL  POLICY  AND 
STRUCTURAL ACTIONS 

The Commission asked each Member State to indicate for each error attributed to it 
by the ECA what action the Member State had taken to follow up the error, as well 
as the timing, content and expected outcome of the action. If action had neither been 
taken  nor  was  planned,  then  Member  States  were  asked  to  state  the  reason  for  the 
lack of action. 

16 

In light of the division of responsibilities set out in the Treaty establishing the European Communities, a 
similar contradictory procedure between the Court and Member States does not take place. 

EN 

10 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Member States replied for about 60 % of the DAS errors within agricultural policy 
and  about  three  quarters  of  the  errors  within  structural  actions.  Slightly  more  than 
half of the errors for which no reply was received concerned Spain, about one quarter 
concerned  Italy  and  Portugal,  with  the  remainder  being  split  between  five  other 
Member States. Reminders have been sent to these Member States, and replies may 
therefore still be forthcoming. 

In some cases, Member States said they had not taken action on the error identified 
by the ECA because  they  did not  accept the error. The rate of  disagreement varied 
somewhat between the different categories of errors. It was highest (5 out of 10) for 
substantive  errors  in  structural  actions,  where  the  United  Kingdom  in  particular 
tended  to  disagree  with  the  ECA  findings.  In  agricultural  policy,  disagreement  on 
substantive errors was much lower (2 out of 10). 

For formal errors, disagreement was high (4 out of 10 errors) in agricultural policy, 
in  particular  due  to  cases  concerning  Greece.  Disagreement  was  slightly  lower  in 
structural  actions  (fewer  than  3  out  of  10  errors)  and  more  evenly  spread  between 
several Member States. 

When  Member  States  accepted  the  error  identified  by  the  ECA,  they  were  almost 
always  able  to  indicate  the  action  already  taken  or  about  to  be  taken.  For  formal 
errors, many different actions were taken. In agricultural policy, typical actions were 
making payments that had been late, improving recording of various data or carrying 
out checks in cases where the ECA had found that control procedures had not been 
fully observed. 

In  structural  actions,  the  range  of  actions  also  included  making  payments  that  had 
been  late,  ensuring  that  EU  funding  was  publicized  as  required,  or  changing 
procedures in relation to tendering and time recording.  

For  substantive  errors  concerning  agricultural  policy,  Member  States  generally 
claimed  to  have  recovered  or  be  in  the  process  of  recovering  payments.  In  some 
cases, the respective farm had been selected for additional on-the-spot controls. 

In  structural  actions,  Member  States  claimed  to  have  withdrawn  ineligible 
expenditure from the claim or to have initiated recovery in around half of the cases. 
Other  actions  included  improving  audit  trails,  repeating  checks  or  improving 
information to beneficiaries about the rules. 

6. 

CONCLUSION 

Almost all Member States replied to the Commission’s questionnaire concerning the 
European  Court  of  Auditors’  2006  Annual  Report,  although  some  Member  States 
submitted  partial  replies.  Reminders  have  been  sent  to  some  Member  States,  and 
further replies may be forthcoming. 

The replies indicate that: 

•  In  structural  actions,  Member  States  consider  EU  legislation  to  be  complex  and 
staff  involved  in  day-to-day  management  of  projects  to  have  insufficient 

EN 

11 

   EN 

 
knowledge  of  the  rules.  Archives  are  sometimes  not  properly  organized  or 
documents  are  not  kept  long  enough.  These  problems  lead  to  repetition  of  the 
same types of errors. Member States must address these key issues in an effective 
and efficient manner – as early as during the legislative process - if the level of 
error in structural actions is to be reduced. 

•  The ECA works to a very tight timetable, making it difficult for Member States to 
provide their reaction to a significant number of the errors identified by the ECA 
in  due  time  before  the  ECA  adopts  its  DAS.  The  ECA  has  already  increased  its 
efforts to inform Member States more quickly of errors identified. Currently, the 
ECA  informs  Member  States  of  its  findings  by  sending  a letter  to  the  relevant 
national  supreme  audit  institution,  which  then  collects  information  from  the 
auditee.  Member  States  might  be  able  to  provide  replies  faster  if  the 
ECA also sent its letter directly to the authority/body audited and extended its use 
of  electronic  communication. The ECA  already presents  each  finding  in  a 
standardized  format  (a  DAS  error  form). Further  developing  this  form  to  also 
include a standardized reply section to be completed by the auditee could also be 
considered,  if  Member  States  find  that  this  might  help  them  provide  the  right 
information to the ECA (and the Commission) more quickly. 

•  The Commission should improve its own follow-up of ECA findings in Member 
States  to  help  ensure  that  Member  States  provide  replies  on  time  and  of  good 
quality.  The  Commission  therefore  intends  to  step  up  its  monitoring  of  Member 
States' replies to the ECA findings, for instance by providing regular overviews to 
Member States of findings where input from Member States will be important to 
the  Commission  during  the  contradictory  procedure.  The  Commission  will  also 
continue  to  discuss  with  Member  States  and  the  ECA  the  reasons  for  the  most 
common errors and the practical steps that need to be taken to prevent them.  

•  When Member States accept the errors identified by the ECA, they appear to take 
appropriate  action  –  often  by  recovering  the  funds  concerned  or  withdrawing 
ineligible expenditure when errors have a financial impact.  

•  Member States do not always agree with the errors identified by the ECA. This is 
a  particular  problem  for  errors  with  a  financial  impact  in  structural  actions.  The 
Commission  and 
to  minimise 
disagreements on interpretation of rules in the future. 

the  ECA  are  currently  discussing  how 

The  Commission  welcomes  the  many  and  prompt  replies  received  from  Member 
States.  They  are  an  important  contribution  to  the  Commission's  follow-up  of  the 
ECA’s findings. When Member States agree with the ECA findings, they do seem to 
follow  up  in  an  appropriate  manner,  including  recovering  funds.  Nevertheless, 
prevention of errors must be improved by ensuring that those involved in day-to-day 
management  are  aware  of  the  rules  and  procedures  to  be  followed  and  have  the 
appropriate resources.  

EN 

12 

   EN