Resolution of the European Parliament of 22 April 2008 with observations forming an integral part of the decision on discharge in respect of the implementation of the European Union general budget for the financial year 2006, section III — Commission
Date: 2008-04-22
Institutions: European Parliament
Subjects: European Commission, budgetary discharge, financial year, implementation of the budget

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RESOLUTION OF THE EUROPEAN PARLIAMENT

of 22 April 2008

with observations forming an integral part of
the
implementation of the European Union general budget for the financial year 2006, section III —
Commission

the decision on discharge in respect of

THE EUROPEAN PARLIAMENT,

— having regard to the European Union general budget for the financial year 2006 (1),

— having regard to the final annual accounts of the European Communities for the financial year 2006 —

Volume I (SEC(2007) 1056 — C6-0390/2007, SEC(2007) 1055 — C6-0362/2007) (2),

— having regard to the Commission's annual report to the discharge authority on the follow-up to 2005
discharge decisions (COM(2007) 538, COM(2007) 537), and to the Commission staff working
document — Annex to the report from the Commission to the European Parliament on the follow-up to
2005 discharge procedure (SEC(2007) 1185, SEC(2007) 1186),

— having regard to the Commission communication entitled ‘Policy Achievements in 2006’ (COM(2007)

67),

— having regard to the Commission communication entitled ‘Synthesis of the Commission's management

achievements in 2006’ (COM(2007) 274),

— having regard to the Commission's annual report to the discharge authority on internal audits carried out
in 2006 (COM(2007) 280), and to the Commission staff working document accompanying the annual
report to the discharge authority on internal audits carried out in 2006 (SEC(2007) 708),

— having regard to the Commission's report on Member States' replies to the Court of Auditors' 2005

annual report (COM(2007) 118),

— having regard to the Green Paper on the European Transparency Initiative, adopted by the Commission

on 3 May 2006 (COM(2006) 194),

— having regard to Opinion No 2/2004 of the Court of Auditors on the ‘single audit’ model (and a proposal

for a Community internal control framework) (3),

— having regard to the Commission communication on a roadmap to an integrated internal control

framework (COM(2005) 252),

— having regard to the Commission's action plan towards an integrated internal control framework (COM
(2006) 9), the report from the Commission to the Council, the European Parliament and the Court of
Auditors on the progress of the Commission action plan towards an integrated internal control
framework (COM(2007) 86), and the Commission staff working document accompanying that report
(SEC(2007) 311),

— having regard to Opinion No 6/2007 of the Court of Auditors on the annual summaries of Member
States; ‘national declarations’ of Member States; and audit work on EU funds of national audit bodies (4),

(1) OJ L 78, 15.3.2006.
(2) OJ C 274, 15.11.2007, p. 1.
(3) OJ C 107, 30.4.2004, p. 1.
(4) OJ C 216, 14.9.2007, p. 3.

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— having regard to the Commission's action plan to strengthen the Commission's supervisory role under

shared management of structural actions (COM(2008) 97),

— having regard to the report from the Commission to the Council, the European Parliament and the Court
of Auditors on the Commission action plan towards an integrated internal control framework (COM
(2008) 110), and the Commission staff working document accompanying that report (SEC(2008) 259),

— having regard to the Annual Report of the Court of Auditors on implementation of the budget for the
financial year 2006, together with the institutions' replies (1), and to the Court of Auditors' special
reports,

— having regard to the statement of assurance as to the reliability of the accounts and the legality and
regularity of the underlying transactions provided by the Court of Auditors pursuant to Article 248 of
the EC Treaty (2),

— having regard to the Council's recommendations of 12 February 2008 (5842/2008 — C6-0082/2008

and 5855/2008 — C6-0083/2008),

— having regard to Articles 274, 275 and 276 of the EC Treaty, and Articles 179a and 180b of the Euratom

Treaty,

— having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial
the European Communities (3), and in particular

Regulation applicable to the general budget of
Articles 145, 146 and 147 thereof,

— having regard to Rule 70 of and Annex V to its Rules of Procedure,

— having regard to the report of the Committee on Budgetary Control and the opinions of the other

committees concerned (A6-0109/2008),

A.

B.

C.

D.

E.

whereas Article 274 of the EC Treaty establishes that responsibility for implementation of the
Community budget lies with the Commission and must be exercised with regard to the principles of
sound financial management, in cooperation with the Member States,

whereas the implementation of EU policies is characterised by the shared management of the
Community budget by the Commission and the Member States, under which 80 % of Community
expenditure is administered by the Member States,

whereas in its resolution of 24 April 2007 (4) on discharge in respect of the financial year 2005, it
proposed that each Member State must be able to take responsibility for the management of EU funds
received by it, either through a single national management declaration or in the form of several
declarations within a national framework,

whereas the urgent need to introduce national declarations at an appropriate political level, covering all
Community funds under shared management, was proposed by it in its 2003 and 2004 discharge
resolutions,

whereas, in its Annual Report concerning the financial year 2006 (point 0.10), the Court of Auditors
(ECA) recognised the importance of national declarations together with the annual summaries in as far
as ‘all these elements, if properly implemented, could stimulate improved management and control of
EU funds in Member States’ and in as far as, with some conditions, ‘such elements could give added
value and be used by the Court following the requirements of international auditing standards’,

(1) OJ C 273, 15.11.2007, p. 1.
(2) OJ C 274, 15.11.2007, p. 130.
(3) OJ L 248, 16.9.2002, p. 1.
(4) OJ L 187, 15.7.2008, p. 25.

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F.

G.

H.

I.

J.

K.

L.

M.

1.

2.

3.

whereas the ECA in its Opinion No 6/2007 on the annual summaries of Member States and ‘national
declarations’ of Member States also stressed that national declarations can be considered a new element
of internal control of EU funds, and that if they highlight strengths and weaknesses, they will stimulate
improved control of the EU funds under shared management,

whereas improvement of financial management in the EU must be supported by a close monitoring of
progress in the Commission and in the Member States, and Member States should assume
responsibility for the management of EU funds, ensuring the completion of an EU integrated internal
control framework with the aim of obtaining a positive DAS,

whereas implementation of point 44 of the Interinstitutional Agreement between the European
Parliament, the Council and the Commission of 17 May 2006 on budgetary discipline and sound
financial management
the Financial Regulation, concerning
summaries of the audits and declarations available, should make a substantial contribution towards
improving management of the Community budget,

(IIA) (1) and of Article 53b(3) of

whereas the principle of sound financial management, including effective internal control, is one of the
budgetary principles set out in the Financial Regulation, following its amendment by Regulation (EC,
Euratom) No 1995/2006 (2), as referred to by the Commission in its action plan towards an integrated
internal control framework,

whereas the work of its Committee on Budgetary Control in general, and the discharge procedure in
particular, form part of a process seeking to establish the full accountability of the Commission as a
whole, of individual Members thereof and of all other relevant actors, of which Member States form
the most important part, for financial management in the EU, in accordance with the Treaty, and
thereby create a sounder basis for decision-making,

whereas it will take due account of the results and recommendations of the discharge in respect of the
financial year 2006 during the next budgetary procedure,

whereas the Council should aim to strengthen the reform efforts and the responsibility of the Member
States for remedying the problems identified by the ECA and for ensuring better financial management
in the European Union,

whereas 2006 was the European Year of Workers' Mobility, which raised awareness of mobility in the
establishment of a genuine European labour market, and prepared the way for the European Year of
Equal Opportunities for All in 2007,

MAIN CONCLUSIONS

Welcomes the progress made by the Commission towards a more efficient use of EU funds and in the
overall control environment, which is reflected by the ECA's statement of assurance (DAS); welcomes
in this light the statement of the ECA on the financial impact of errors; invites it to apply this to all
chapters of its annual report in the future;

Welcomes the considerable progress made in the management of common agricultural policy (CAP)
funds, in particular thanks to the functioning of the Integrated Administrative Control System (IACS),
and reminds Greece of its obligation to implement the IACS in accordance with its action plan;

Welcomes the commitment by the Commission to report on a monthly basis to its Committee on
Budgetary Control on the implementation of the follow-up to the 2006 discharge procedure, whereby
the Commission presents developments in his or her area of
every month one Member of
responsibility, covering national declarations and annual summaries, external actions and the
implementation of the action plan to strengthen the Commission's supervisory role under shared
management of structural actions;

(1) OJ C 139, 14.6.2006, p. 1.
(2) OJ L 390, 30.12.2006, p. 1.

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4.

5.

6.

7.

8.

9.

National management declarations

Welcomes the Commission's commitment to give firm political support to national initiatives to draw
up and publish national declarations, audited by national audit institutions, and to continue to
encourage Member States to follow the example of Denmark, the Netherlands, Sweden and the UK;
expects therefore the Commission to insert a new action point on promoting national management
declarations as part of its review and follow-up to the abovementioned action plan towards an
integrated internal control framework; expects furthermore that the Commission and the Member
States will ensure that the national summaries fully respect the purposes and spirit of point 44 of the
IIA;

Is of the opinion that the Commission must react to fulfil important requests made in Parliament's
resolution accompanying the discharge decision in respect of the financial year 2005, which is not the
case in the field of national declarations, where Parliament asked the Commission to submit to the
Council before the end of 2007 a proposal for a national management declaration covering all
Community funds under shared management; regrets the Commission's tacit acceptance of Member
States' collective irresponsibility, with the exception of Denmark, the Netherlands, Sweden and the UK,
concerning financial management in the European Union;

impossible;

Is of the opinion that the Commission must present complete and reliable figures for recoveries,
specifying the exact budget line and year to which the recovery relates; any other presentation makes
is aware that the Commission to a large extent has to obtain this
serious control
information from the Member States; points out that, for this purpose, Parliament for the last three
years has proposed the introduction of national management declarations in order to put the
Commission in a position where it is able to present the missing information and fill the transparency
gap;

Structural Funds

Welcomes the publication of the abovementioned action plan to strengthen the Commission's
supervisory role under shared management of structural actions in reaction to the concerns raised by
Parliament in the course of the discharge procedure in respect of the financial year 2006; will closely
monitor the reporting on this action plan in preparation for the discharge procedure in respect of the
financial year 2007;

Welcomes the firm commitment made by the Commission to ensure that any undue payments are
recovered in the time remaining before the closure of winding-up procedures for the period 2000 to
2006;

Welcomes the Commission's commitment to enforce the Financial Regulation in full, in particular in
relation to annual summaries; expects the Commission to keep Parliament fully informed of all legal
actions brought against, and failures to comply by, Member States; welcomes in this light the
preliminary assessments of the quality of the annual summaries for agriculture and Structural Funds;
looks forward to the final assessments in the annual activity reports of the different Directorates-
General;

10.

Considers a major achievement of the discharge procedure in respect of the financial year 2006 the
commitment made by the Commission to correct all individual errors found in the ECA's Annual
Report, and in particular the commitment to make 100 % corrections in all cases of serious breach of
public procurement procedures and to apply flat-rate or extrapolated financial corrections whenever it
finds systemic tendering problems;

11.

Requests, however, the Commission to present objective, clear and full information on its capacity to
recover unduly paid amounts;

12. Welcomes the fact that as a direct result of the discharge procedure in respect of the financial year
2006 the Commission has finally committed itself to applying a policy of suspending payments as
soon as possible following detection of serious weaknesses in the system;

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13.

Is looking forward to the quarterly reports on corrections and recoveries which are to be audited by
the ECA, including the establishment of a system and a reporting scheme allowing recoveries made ex
post to be linked to the year when the actual funding was allocated; hopes that this will give it, for the
first time and in time for the discharge procedure in respect of the financial year 2007, a good
overview of the state of play in this field; is of the opinion that the Commission should present a
scoreboard and a final date for the implementation of its abovementioned action plan to strengthen its
supervisory role under shared management of structural actions;

14.

Reminds the Commission of
Committee on Budgetary Control of 25 February 2008:

the commitments made at

the extraordinary hearing before its

(a)

concerning the implementation of
the abovementioned action plan to strengthen the
Commission's supervisory role under shared management of structural actions, to improve
audits, to decide on and apply the necessary suspension and correction procedures and to
improve recoveries, and awaits quarterly reports on the implementation thereof;

(b)

to develop in close cooperation with the ECA a new reporting scheme on recoveries and financial
corrections, and expects it to present a detailed timetable for the development and application of
this new scheme;

(c)

to present an action plan with detailed measures on how to prevent extreme errors from
occurring;

15.

Endorses the Commission's position that, where irregularities are detected, corrective action, including
the suspension of payments and the recovery of undue or erroneous payments, will be taken, and that
it will report to Parliament at least twice a year on the measures it takes in this respect;

External actions

16.

following the discharge procedure in respect of

the
Considers that
Commission has become increasingly aware of the importance of transparency, visibility and political
guidance for all EU funds implemented in the area of external actions, be it directly by the Commission
or via decentralised management or international trust funds;

the financial year 2006,

17. Welcomes the commitment of the UN representative to Iraq to improve real time information to the
Commission, and considers that the 13 months of close research into the use of EU funds via
international trust funds has contributed to increased awareness of the need for accountability
regarding the use of EU taxpayers' money; invites the Commission to cooperate closely with it in the
revision of
the Financial and Administrative Framework Agreement between the European
Community and the United Nations (FAFA);

18. Welcomes the fact that the Commission included information on verification missions under FAFA, as
well as the relevant conclusions, in the annual activity reports signed by the competent Directors-
General at the end of March 2008, and that this allowed Parliament to take that information into
account during its vote on this report;

19.

Accepts the Commission's proposal to discuss the question of a definition of non-governmental
organisation (NGO) after the results of the ECA's ongoing audit of NGOs have been made available;

20.

Calls on the Commission to:

(a)

provide it with regular information on EU financing of multi-donor trust funds, both on its own
initiative and at Parliament's request;

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present measures on how to improve the visibility of EU funds when implementing external aid
via other organisations;

present measures aimed at allowing better access for EU auditors (ECA, Commission or private
audit firms) to carry out audits of projects under joint management, especially joint management
with the UN;

21. Welcomes the Commission's commitment to further inform it of beneficiaries of funds, as referred to
in Article 30(3) of the Financial Regulation, as well as to further increase political steering, visibility
and control over these funds, in particular over funds managed via international trust funds;

22.

Insists on public access to information concerning all members of expert and working groups working
with the Commission, as well as full disclosure of beneficiaries of EU funding;

HORIZONTAL ISSUES

Statement of Assurance

Reliability of the accounts

23.

24.

25.

26.

27.

28.

29.

Notes with satisfaction the ECA's positive opinion concerning the reliability of the final annual
accounts and its statement that, except for some observations, the accounts present fairly, in all
material respects, the financial position of the Communities and the results of their operations and
cash flows as at 31 December 2006, in accordance with the provisions of the Financial Regulation and
the accounting rules adopted by the Commission's Accounting Officer (Chapter 1, Statement of
Assurance, paragraphs VII to IX);

Expresses none the less its concern at the ECA's observations regarding errors identified in amounts
registered in the accounting system as invoices or cost statements and pre-financing, which have the
effect of overstating the amounts payable by some EUR 201 million and the total amount of long and
short term pre-financing by some EUR 656 million; regrets in particular weaknesses in the accounting
systems of certain Directorates-General, which still endanger the quality of financial information (in
particular for cut-off and employee benefits) and lead to a number of corrections after the presentation
of the provisional accounts;

Deplores the fact that financial documents are not made available to members of the Committee on
Budgetary Control in all the official languages of the European Union;

Notes that the Commission's Accounting Officer was not able to provide validation regarding the
financial year 2006 to the local systems of the EuropeAid Cooperation Office, the Directorate-General
for Education and Culture and the Directorate-General for External Relations;

Reminds the Commission of its commitment in its annual report to the discharge authority on the
follow-up to 2005 discharge decisions to provide the budgetary authority with six-monthly reports on
the management of pre-financing operations, as requested in Parliament's resolution accompanying the
discharge decision in respect of the financial year 2005, and deeply regrets that no such report has as
yet been submitted;

Legality of the underlying transactions

Notes with satisfaction that the ECA considers that in areas where the supervisory and control systems
are implemented in a manner which provides for adequate risk management, the transactions taken as
a whole are free from material error;

Deplores, none the less, the fact that in extremely important Community spending areas, such as
structural measures, internal policies and external actions, payments are still affected by high material
error at the level of implementing organisations;

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30.

Expresses its deepest concern at the fact that the ECA continues to find weaknesses in the operation of
supervisory and control systems and in the reservations on the assurances provided by the Directors-
General, in particular as regards the legality and regularity of underlying transactions, and reminds the
Member States and the Commission of their responsibilities in this regard;

Information and framework of the Statement of Assurance

31. Welcomes the work carried out by the ECA to further improve the clarity of the DAS as regards factors
contributing to more efficient and effective control systems in each sector from year to year, and
invites the ECA to continue to regularly inform Parliament of progress in this regard;

32.

33.

Regrets the lack of clarity concerning the legality and the inevitable impact on the media of the ECA's
reporting of EU funds being received by certain beneficiaries (railway companies, horse riding/breeding
clubs, golf leisure clubs and city councils) in accordance with the eligibility rules; points out that from
a legal perspective this is ultimately a discussion of the eligibility rules; emphasises that it has
supported the ECA in the past, and will continue to do so, when commenting on efficiency and
effectiveness in its special reports;

Reiterates that the ECA made the use of available audits and reports of national audit institutions an
integral part of its new methodology; asks the ECA to inform Parliament's Committee on Budgetary
Control as to how it uses this information and asks further the ECA to give an opinion on the
usefulness of the information obtained from national audit institutions when drawing up its annual
report;

34. Welcomes the quality of specific parts of the ECA's Annual Report, such that concerning structural
measures, which enables all actors concerned to identify problems and focus their efforts on necessary
improvements;

Budgetary management

35.

Notes the efforts made by the Commission's services during 2006 to ensure the completeness and
accuracy of the registration of new pre-financing payments, of new open invoices and cost statements,
and of cut-offs;

36.

Notes that, in relation to Structural Funds, 2006 was the last year of the 2000 to 2006 programming
period, by the end of which all commitments for that period had to be made;

37.

38.

39.

Is concerned that outstanding budgetary commitments as at the end of 2006 represent the full extent
of the remaining payments to be made for the financial perspective 2000 to 2006, corresponding to
28 % of the total amounts of the related financial perspective headings for the whole period;

Regrets that outstanding budgetary commitments — unused commitments carried forward to be used
in future years, mainly on multiannual programmes — related to structural operations and the
Cohesion Fund increased in 2006 by EUR 12,6 billion (10,6 %) to EUR 131,6 billion;

Is concerned that n + 2 pressure spending might interfere with a proper undertaking of the winding-up
procedures for structural programs and projects; points out that for 2007, payments concerning
Structural Funds have already gone up by almost 50 % in comparison to 2006; stresses that the
Commission should ensure an effective winding-up procedure and emphasises the important role that
Member States have in this;

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40.

Regrets also the fact that the spending rate for the Cohesion Fund, ERDF and ESF was less than
expected in the new Member States and linked to difficulties encountered by those Member States in
absorbing expenditure; asks the Commission to give a more detailed explanation for lower than
nationally forecast spending on structural operations;

41.

42.

43.

44.

45.

46.

National management declarations and point 44 of the IIA

Recalls the urgent need to introduce national declarations at the appropriate political level, covering all
Community funds coming under shared management, as requested by it
in its resolution
accompanying the discharge decision in respect of the financial years 2003, 2004 and 2005;

Recalls that in its resolution accompanying the discharge decision in respect of the financial year 2005,
Parliament asked the Commission to submit to the Council before the end of 2007 a proposal for a
national management declaration covering all Community funds under shared management based on
sub-declarations by the various national bodies responsible for the management of expenditure; rejects
the answer given by the Commission in the annex to its report on the follow-up to 2005 discharge
procedure, as follows: ‘the Commission will not be taking the recommended action given the different
governmental structure and management structures for EU funds under shared management of the 27
Member States, the development of a single standard declaration would not yield significant benefits.
The Commission will however continue to support such initiatives taken by national administrations’;
considers this response highly unsatisfactory, taking into account the fact that more than 80 % of the
general budget of the European Union falls under what is called ‘shared management’, and even more
so in light of the current situation with respect to Structural Funds, as described by the ECA in its
Annual Report;

Strongly supports the initiative taken by some Member States (Denmark, the Netherlands, Sweden and
the UK) to adopt a national declaration on the management of Community funding, and expresses
that, despite these initiatives, most other Member States are resisting its
concern at
introduction; urges the Commission to present the advantages in terms of control relations between it
and those Member States that have taken that initiative; requests the Commission to report on a
regular basis to its Committee on Budgetary Control on progress made in this respect;

the fact

Notes the first annual summaries sent by most Member States, and asks the Commission to bring
infringement proceedings against those Member States which have not fulfilled their obligations;
points out that it considers these annual summaries to be a first step towards national management
declarations; asks the Commission to draw up, before the first reading of the 2009 budget, a document
analysing the strengths and weaknesses of each Member State's national system for the administration
and control of Community funds and the results of the audits carried out, and to forward that
document to Parliament and the Council; invites the Commission also to report on the quality of the
annual summaries and to ensure that value is added to the process by such means as the identification
of common problems, possible solutions and best practices;

Notes, however, the ECA's critical statement concerning national audit work to the effect that ‘the
external auditor wishing to rely on, or use, the opinion or work of others must obtain direct evidence
of the sound basis of that work’; finds therefore the work of the Contact Committee Working Group
responsible for developing common auditing standards and comparable audit criteria tailored for the
EU essential, and calls for the Commission to encourage all Member States to participate in it;

Governance

its previous criticism of

Reminds the Commission of
the basis on which the
Commission claims to discharge its political responsibility by means of its synthesis report, whereas
the Commission lacks full insight into 80 % of funds under shared management and the quality of
annual activity reports varies; points out that the source of this lack of insight is two-fold: on the one
hand insufficient monitoring and supervision by the Commission, and on the other an absence of
concrete solutions and accountability at Member State level;

the solidity of

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47.

48.

Regrets the Commission's tacit acceptance of the collective irresponsibility of the majority of Member
States concerning financial management in the European Union; welcomes and supports the initiatives
taken by some Member States in this respect, and calls on the other Member States to follow suit;

Notes that the budget is implemented by the Commission and the Members thereof, and not by the
Directors-General, who are authorising officers by delegation, and therefore regrets the fact that the
increased responsibility of Directors-General has not been accompanied by the taking of direct (and
not only political) responsibility by Members of the Commission; invites the Commission to present
proposals to remedy this situation, which is in contravention of Article 274 of the Treaty;

49. Welcomes the ECA's solid analysis of the internal control system in the Commission (chapter 2 of its
Annual Report); encourages the ECA to continue this positive development by including an analysis of
the actions and inactions of individual Members of the Commission in relation to this situation;

50.

Recalls that governance is about the position of staff working in accounting and control functions vis-
à-vis their management, their empowerment to enforce action, their skills and their training;

51.

Requests the Director-General of Directorate-General Budget to give a formal opinion on the quality
and efficiency of the internal control system;

52.

Requests the Secretary-General to give a formal statement of assurance as regards the quality of the
individual declarations from the Directors-General;

53.

Requests the internal auditor of the Commission to assess the Secretary-General's statement of
assurance in the form of an audit opinion;

54.

Recalls the importance of functional reporting lines — open communication between the same groups
of professional specialist staff in different Directorates-General, such as, for example, IT staff, internal
control staff, internal audit staff and accountants — in a silo organisation such as the Commission;
regrets the very limited efforts to introduce this type of governance instrument;
invites the
Commission to ensure the introduction of compulsory functional reporting lines as soon as possible
and to report to its Committee on Budgetary Control thereon no later than September 2008;

55.

Invites the Commission to upgrade the accounting officer to the same grade as the accounting officer's
operational counterparts;

56.

Invites further the Commission to change the composition of the Audit Progress Committee so that
the number of external members is the same as the number of the Members of the Commission;
invites also the Commission to nominate one of the external members of the Audit Progress
Committee as its chairman;

57.

Expects the Commission to issue a Commission-wide annual institutional statement of assurance
which the President of the Commission will present to Parliament's Committee on Budgetary Control;

The Commission's internal control system

The action plan towards an integrated internal control framework

58. Welcomes the overall progress made in the development of the Commission's internal control system;

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59.

Disagrees with the statement made by the Commission in its abovementioned progress report of 2008
on the action plan towards an integrated internal control framework that Actions 1, 3, 3N, 5, 8 and 13
are completed; points out that so far it has been unaware of supporting documents or statements
justifying such a declaration; is forced therefore to seriously question whether these measures have
been put in place, let alone whether they have been implemented or have had an impact on the
progress of the implementation of that action plan;

60. Welcomes however the half-yearly scoreboards on the implementation of that action plan;

61.

Highlights that in relation to the implementation of Actions 1, 3, 3N, 5, 10, 10N, 11, 11N, 13 and 15,
the Commission is also dependant on cooperation with the Member States; emphasises that it fully
supports these actions, and urges therefore the Commission to use every available tool at its disposal to
implement them as soon as possible;

62.

Expects the relevant scoreboard to reach Parliament by 1 January 2009 for use in the discharge
procedure in respect of the financial year 2007;

Analysis of the existing balance between operational expenditure and the cost of the control system for EU funds

63.

Deeply regrets the fact that so far it has not received any information about the cost-benefit analysis of
the control system for EU funds, as it had requested in the resolution accompanying the decision on
discharge in respect of the financial year 2005;

64.

65.

66.

67.

68.

Synthesis Report

Finds it unacceptable that the Commission reduces the ECA's audit results, which are based on widely
accepted international audit standards, to ‘differences of opinion on the typology and impact of error
and on the evaluation of systems deficiencies, and partly the different perceptions regarding the
operation of financial correction mechanisms’ (page 2, last paragraph);

Is of the opinion that all reservations concerning a lack of assurance as to the legality and regularity of
Community spending should be reflected in the annual activity reports, as well as in the Synthesis
Report; finds it therefore highly surprising that three Directors-General decided only in 2006 to insert
a reservation concerning the management and control of Interreg, which, as noted by them, had
already existed for some years (page 4, last paragraph);

Is concerned about the statements of the Internal Auditor in his first Overview Report which indicate
that, despite some progress, half of the critical and very important recommendations have not been
implemented before the target dates set (page 8, before the last paragraph); asks the Commission to put
more emphasis on implementation of these recommendations;

Political responsibility and administrative responsibility at the Commission

Annual activity reports

Notes with regret that according to the ECA: ‘(...) in significant parts of the EU budget, the Directors-
General give a more positive account on the legality and regularity of the EU spending than is
consistent with the ECA's audit’ (point 2.13 of the Annual Report);

Regrets the fact that in its Annual Report the ECA emphasised once again that some of the annual
activity reports still do not include sufficient evidence for its statement of assurance (points 2.14 to
2.18 of the Annual Report);

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69. Welcomes the fact that the Synthesis Report stresses that ‘[i]n all instances where there is a difference
between the European Court of Auditors’ opinion and that of the Director-General, the latter will have
to explain it in his/her next year's annual activity report’ (point 2), and hopes that improvements will
be visible in the 2007 annual activity reports and onwards;

70.

Asks the Commission to improve the annual activity reports through the establishment of common
criteria for the making of reservations and their stronger formalisation so as to allow greater
comparability between the annual activity reports of different Directorate-Generals and over time; asks
the Commission to take account of the observations made by the ECA on the annual activity reports
and to make improvements in close consultation with it;

Transparency and ethics

71. Welcomes the publication of the Follow-up to the Green Paper on ETI (COM(2007) 127), in which the
Commission states, in accordance with Article 30(3) of the Financial Regulation, that information on
beneficiaries of EU funds will be publicly available as of 2008 (section 2.3.2) and declares that it will ‘in
spring 2008’ launch a register for interest representatives (lobbyists);

72.

73.

74.

75.

76.

77.

Is aware of the arguments in favour of both voluntary and compulsory registration of lobbyists; notes
the Commission's decision to start with a voluntary register and to evaluate the system after one year;
is aware of the legal base for a mandatory register provided by the Treaty of Lisbon; recalls that
Parliament's current register is already mandatory and that a possible common register would be de
facto mandatory, since registering is, in both cases, a prerequisite for gaining access to Parliament;

Recalls the need for a new code of conduct for Members of the Commission so as to improve and
define more clearly their individual and collective political responsibility and accountability for their
decisions and for the implementation of their policies by their services;

Insists on the Commission's responsibility for ensuring the completeness,
searchability and
comparability of data provided on the beneficiaries of EU funding, and recalls the Commission's
written answer to Parliament in which the intention to finalise and reach agreement with Member
States before April 2008 on common standards for such data is set out;

Recalls its observation at paragraph 85 of the resolution accompanying the discharge decision in
respect of the financial year 2005 to request easy access to information on who is represented in the
various forms of expert groups and what their tasks are, and its observation at paragraph 86 to call on
the Commission to publish the names of the people who take part in these groups, and the names of
the special advisers which the individual Members of the Commission, Directors-General or cabinets
engage; asks that the names of all experts and counsellors in the Commission's working groups be
made public;

Recalls the answers given by the Member of the Commission responsible for the discharge at the
hearing of the Committee on Budgetary Control of 21 January 2008 to the effect that the register of
expert groups will contain all such groups,
including information on members of comitology
committees, individual experts, joint entities and social dialogue committees;

Also recalls the request made at paragraph 76 of its resolution accompanying the discharge decision in
respect of the financial year 2005 ‘to ensure that the Commissioners’ binding code of conduct
incorporates the necessary ethical rules and the principal guidelines to be observed by Members of the
Commission in the conduct of their office, in particular when appointing colleagues, especially to their
‘cabinets’;

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78.

Regrets the answer given by the Commission in the annex to its abovementioned report on the follow-
up to the 2005 discharge procedure (page 18) to the effect that these rules do not yet exist, and urges
the Commission to adopt them;

79.

Recalls the importance of complete transparency and publicity with regard to staff of cabinets of
Members of the Commission not recruited in accordance with the Staff Regulations;

SECTORAL ISSUES

Revenue

80. Welcomes the fact that the ECA considered that in all material respects the systems for customs
supervision were satisfactory, that the accounts regarding traditional own resources were reliable and
that the underlying transactions were legal and regular, even if some weaknesses persisted;

81. Welcomes also the fact that the ECA found the VAT and GNI resources to be correctly calculated,

collected and entered in the Community accounts by the Commission;

82.

Notes with satisfaction, regarding the VAT resource, that the Commission maintained the frequency
and quality of its inspections; is concerned, however, at the number of outstanding reservations, and
therefore calls on the Commission, in cooperation with the Member States, to continue its efforts to
ensure that reservations are lifted within reasonable time-frames;

83.

Asks the Commission to communicate to it what action it intends to take in the case of Member States
with continued reservations;

The common agricultural policy

84. Welcomes the general improvement in CAP expenditure in 2006 and the ECA's statement that the
IACS, which is the main control tool for area aid, animal premiums and the single area payment
scheme, is an effective system in limiting the risk of irregular expenditure, if properly applied;

85.

86.

87.

88.

Appreciates the efforts of the Commission to broaden the application of the IACS and expects the
Commission to ensure, in accordance with the plans and answers presented to Parliament, that the
percentage of agricultural expenditure covered by the IACS will be at least 89 % by 2010 and 91,3 %
by 2013;

Regrets the ECA's finding that CAP expenditure was still materially affected by errors and the fact that
controls and checks implemented under the IACS are still not effectively enforced or are not yet
completely reliable in some Member States, and thus urges the Commission to double-check with the
Member States that the IACS is fully implemented in all EU-15 Member States and that the weaknesses
found in the EU-10 Member States are remedied;

Regrets the fact that the ECA once again detected problems in the implementation of the IACS in
Greece; fully supports the Commission's intention (as stated to its Committee on Budgetary Control) to
ensure that current legislation on the suspension of payments is strictly enforced if the Greek
Government does not remedy the existing problems within the time limits set;

Regrets the fact that in rural development, agri-environmental measures are prone to a high incidence
of errors because farmers do not meet the often complex eligibility conditions; considers that the
Commission should give due consideration to the pertinence of eligibility conditions for such measures
and study the possibility of simplifying those conditions;

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89.

Notes the Commission's reference to the possible need to apply a different level of tolerable risk to the
agro-environmental area in order to strike the right balance between improving and protecting the
environment and the costs of controlling the measures applied;
insists, however, on the correct
application and sufficient control of Community spending, and invites the Commission to thoroughly
investigate and assess the possible costs and benefits in the area of agro-environmental measures, as
well as the connection to other areas of spending, and to present this analysis to the Council,
Parliament and the ECA as a minimum basis for discussing the need for reform, as indicated by the
Commission;

90.

Notes that, since the new financial clearance procedure provides for irregularities which Member States
consider to be irrecoverable, and amounts are charged to the Community on the basis of information
from the Member States, the Commission must now carry out a detailed follow-up to ensure that the
debts are correct and properly charged to the Community budget;

91.

Recalls also that the cost of financial corrections is borne by the Member States, usually by the
taxpayer, rather than by the beneficiaries of the aid irregularly paid;

92.

93.

94.

95.

96.

97.

Notes that, according to the ECA, when auditing the single payment scheme (for the first time in
2006), the Commission did not specify the scope and depth of the work of the certifying bodies, and
some certifying bodies (in Italy for example) excluded verification of entitlements, only mentioning it
in their certificates, and the Commission accepted this without comment;

Regrets that the level of irregular payments financed by the CAP is not yet known or estimated by the
Commission in a way considered appropriate by the ECA; notes that the ECA found that corrections
for irregular payments with an estimated maximum amount of EUR 100 million could not be made, as
they were discovered after the two-year time limit;
invites the Commission to allocate adequate
resources for conformity audits in order to execute corrections for irregular payments within the time
limit;

Considers that all the weaknesses referred to by the ECA in its Annual Report should be resolved by
the Commission in order to ensure a higher level of assurance concerning the work of the certification
bodies;

Takes note of the conclusions set out at points 5.20 and 5.21of the ECA's Annual Report, and urges
the Commission to improve checks in the UK, which did not comply with Community legislation
when allocating entitlements and paying Single Payment Scheme (SPS) and rural development aid to
landlords for land let to and farmed by lessee farmers, and in those Member States (Austria, Ireland and
the UK) which failed to correctly apply certain key elements of the SPS and extended consolidation of
entitlements beyond the provisions of Council Regulation (EC) No 1782/2003 of 29 September 2003
establishing common rules for direct support schemes under the common agricultural policy and
establishing certain support schemes for farmers (1);

Takes note of the very clear affirmation of the Commission, both in answer to the ECA (point 5.27 of
the Annual Report) and its Committee on Budgetary Control, that no beneficiary is eligible for
agricultural support unless that person exercises an agricultural activity; expects the Commission to
follow up on the cases identified by the ECA, and to make sure that no payments will be made, and will
be recovered where they have been made, to landowners who do not exercise an agricultural activity;

Invites the Commission, in light of the statement by the ECA that more than 700 new beneficiaries
belong to categories such as golf clubs, cricket clubs, leisure parks/zoos, horse riding establishments,
railway companies and city councils, to provide an overview and an assessment of the development of
allocation of agricultural support to such beneficiaries, who are eligible for funding under the current
rules;

(1) OJ L 270, 21.10.2003, p. 1.

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98.

Reminds the Member States of the existing possibility to influence and decide in a national context to
further narrow the activities and beneficiaries eligible for funding;
if
appropriate in light of developments and according to its assessment of the intended use of support
measures, to present a proposal for amendment or revision of the rules;

invites the Commission,

Structural measures, employment and social affairs

99.

Recalls that in 2006 Community funding of Structural Policies totalled EUR 32,4 billion; points out
that for 2007 this amount rose to EUR 46,4 billion, not including co-financing by Member States;

100. Notes with great concern that in its Annual Report, the ECA indicated that reimbursement of
expenditure to Structural Policies projects is subject to material error, that the proportion of
reimbursements in the sample affected by error was 44 % and that ‘at least 12 % of the total amount
reimbursed in structural policies should not have been reimbursed’;

101. Notes with deep concern the ECA's observations that:

(a)

only 31 % of projects in its audit sample were correctly reimbursed and were not affected by
compliance errors;

(b)

the control systems in the Member States are generally ineffective or only moderately effective;

(c)

just over half of the Commission's audits examined by it appear to have had all the qualities of an
effective supervisory instrument;

regrets the ECA's conclusion that it is reasonably confident that at least 12 % of the total amount
reimbursed to Structural Policies projects should not have been reimbursed;

102. Considers it unacceptable that, according to the ECA, first-level control systems in Member States are
generally ineffective or only moderately effective, and that a number of national and regional
authorities do not manage EU funds with sufficient attention; notes that of the ECA's audit sample (19
first-level control systems), none of the systems was effective, only six moderately effective and 13
ineffective, and thus no progress has been made in the field of Structural Funds compared to 2005; is
very concerned by the inability of the Council to clearly recognise its responsibility for this situation,
which is the result largely of inadequate controls by Member States;

103. Urges therefore Commission to make use of ex-ante checks to verify whether supervisory and control
systems for the period 2007 to 2013 are in place in all Member States, and to regularly follow up on
those checks;

104. Regrets also the fact that, according to the ECA, the Commission maintains only moderately effective
supervision of control systems in the Member States, failing to prevent reimbursement of overstated or
ineligible expenditure;

105. Notes with regret that, as pointed out by the ECA, in relation to expenditure under Structural Policies
(such as the CAP and internal policies), complicated or unclear eligibility criteria or complex legal
requirements have a negative impact on the legality and regularity of the underlying transactions;

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106.

Finds it unacceptable that, according to Commission (1), little progress is to be expected concerning
simplification of the existing regulations governing the Structural Funds for the period 2007 to 2013,
and that further simplification will only be proposed in the next legislative round;

107. Urges the Commission to follow up on the recommendation of the ECA (point 6.45 of the Annual
Report) concerning the Cohesion Fund, and to present further simplification proposals as soon as
possible for, inter alia, clear and straightforward rules, guidelines and eligibility criteria;

108. Considers and fully agrees with the ECA that the Member States' authorities have a very important role
in the effective implementation of Structural Funds, and that the Commission should reinforce their
audits and make additional efforts to supervise the Managing Authorities in the Member States;

109. Regrets the lack of incentives for Member States to effectively control expenditure, since any ineligible
expenditure identified by the Commission or the ECA can be substituted for eligible expenditure by a
Member State; asks the Commission to make sure that in the future only irregularities identified by
Member States themselves can be substituted for other expenditure without any loss of funding for the
Member State concerned;

110. Welcomes the Commission's abovementioned action plan to strengthen the Commission's supervisory
role under shared management of structural actions, which contains 37 measures aimed at reducing
irregular payments made by Member States; welcomes also the Commission's commitment,
announced publicly at the hearing before the Committee on Budgetary Control of 25 February
2008, to report quarterly to Parliament on the progress of this action plan; expects the Commission to
improve the reporting scheme in cooperation with the ECA; calls on the Commission, while assuming
its Treaty responsibility for the implementation of the budget and respecting the principles of sound
financial management, to take,
in cooperation with the Member States, the following measures
concerning the shared management of Structural Funds:

(a)

to make a formal commitment to fully implement the action plan and to agree in particular to:

— quarterly reporting on progress, measured where possible in quantitative rather than
qualitative terms, in a form acceptable to the ECA, in particular submitting progress reports
by 31 October 2008 and 31 January 2009,

— provide complete and accurate quarterly reporting on corrections and recoveries made by it,
in particular submitting progress reports thereon by 31 October 2008 and 31 January
2009,

— obtain information from Member States on the corrections they have made by means of the
withdrawal of projects or the recovery of errors and in particular by submitting progress
reports by 31 October 2008 and 31 January 2009 on its verification of the completeness
and accuracy of these corrections;

(b)

to take further measures to prevent errors in the future, in particular by improving first-level
checks;

111. Asks the Commission to present to it a scoreboard with a final date for the implementation of this
action plan, including also a common scheme of quantitative indicators and intermediate deadlines for
its implementation;

(1) Commission statement under Action 1 in its abovementioned progress report of 2008 on the action plan towards an

integrated internal control framework.

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112.

Is of the opinion that the Commission should focus on the reliability of national monitoring and
reporting systems, on guidance to Member States and on coordination of audit standards, and should
always give a breakdown per Member State;

113.

114.

115.

116.

Expects the Commission to initiate infringement procedures against those Member States which have
not complied with their obligations under the regulations on Structural Funds,
the Financial
Regulation and its implementing rules and the IIA, in particular those Member States which do not
present reports on recoveries and financial corrections, those which do not present annual summaries
in conformity with the guidelines and those the quality of the annual summaries of which is
inadequate;

Stresses the importance of Commission guidelines for the effective fulfilment of the IIA; is of the
opinion that these guidelines should, as a first step, at least require what is already required by the
sectoral regulation in agriculture (i.e. a declaration of assurance signed by the head of the Managing
Authority and accompanied by a certification report);

Insists that the Commission should bring suspension proceedings against Member States whose first-
level control systems are inadequate, and that it should speed up the sanctions system and present to
Parliament a concrete plan for the timing and sanctions to be applied in case of identification of
irregularities;

Insists on auditable reporting on corrections and recoveries by the Commission (withdrawals,
recoveries by Member States, recoveries by the Commission, net corrections, suspension of payments)
in relation to all unduly made payments in connection with all funds, with precise definitions of the
different categories of financial correction, and insists further that the underlying evidence should be
fully accessible to the ECA; expects the Commission to establish a clear link between the recovery and
the year in which the irregularity happened, and to develop these reporting schemes in cooperation
with the ECA;

117. Notes the Commission's statement that none of the amounts unduly paid in 2006 will be lost due to
the effectiveness of the ex-post controls; expects it to provide Parliament with objective, clear and full
information concerning its capacity to recover unduly paid amounts, the underlying proof of which
should be presented to Parliament;

118. Recalls Action 11N (1), the deadline for the implementation of which was 31 December 2007, and

calls on the Commission to implement it as soon as possible;

119.

Is worried by the Commission's statement in its abovementioned progress report of 2008 to the effect
that only recoveries launched in 2008 will be recorded in the central financial and accounting system;
urges therefore the Commission to record information on the control authority and the type of error
in the central financial and accounting system, and to retroactively encode all recoveries for the periods
1994 to 1999 and 2000 to 2006;

120. Asks the Commission in this light to give an assessment of the efficiency and effectiveness of

multiannual recovery systems and to report on this in the 2008 or 2009 accounts;

121.

Expects the Commission to present to it an evaluation of the quality of all the annual summaries
received for agriculture, Structural Policies and fisheries; this evaluation should entail a breakdown per
Member State and per policy area and should give an opinion on the overall assurance and overall
analysis that can be drawn from the summaries;

(1) Action 11N reads as follows:

‘To determine whether recovery and offsetting systems are working effectively, by
identifying amounts recovered in 2005 and 2006 and their coherence with errors identified during controls the
Commission will, in direct management, develop a typology of errors and the relationship with recoveries, financial
corrections and adjustments to payments and for share management it will examine the reliability of national
monitoring and reporting systems’.

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122. Regrets the variety of information given by the Commission on financial corrections and recoveries
and expects the information provided for the discharge to use exactly the same definitions of financial
corrections as in the abovementioned quarterly reports;

123. Asks the Commission to report during the mid-term review on the results of Contract of Confidence

arrangements, including the fundamental question of whether these contracts have added value;

124.

125.

Expects the Commission to report to it annually on Member States' fulfilment of or non-compliance
with their obligations under the Structural Funds regulation and the IIA; welcomes the fact that the
Commission has obtained the national summaries of sectoral audits required under the revised IIA and
the revised Financial Regulation; deplores, however, the fact that not all Member States have fulfilled
this requirement; urges the Commission to bring infringement proceedings against those Member
States which have not delivered the national summaries of sectoral audits;

For the discharge in respect of the financial year 2007, requests the Commission to present both cash
and accrual based figures, a clear indication of whether the figures are annual or multiannual, a clear
explanation of
in the case of system
weaknesses, or recoveries at the level of the final beneficiary), and improvements in the ABAC system,
and expects the information provided for the discharge to use exactly the same definitions of financial
corrections as in the other reports on financial corrections published over the year;

financial corrections (flat-rate corrections,

the nature of

126. Calls on the Commission to inform it, upon the closure of the last of the projects involved in the 2006
budgetary exercise, of the total sums recovered and, if necessary, of any losses and the reasons therefor;

127. Notes with concern the substantial decline in the volume of payments in some of the EU-15 Member

States, which led to a sharp increase in outstanding commitments;

128. Reminds the Commission that the quality of audit systems has a considerable influence on project
evaluation, and thus strict regulation of the quality of financial control procedures will be particularly
important in the future;

129.

Expresses its serious concern at the fact that, as in 2005, outstanding budgetary commitments have
continued to rise and that this, combined with the replacement of the n + 2 rule by n + 3, a change
which some Member States are due to implement for the period 2007 to 2013, might worsen the
present situation, with the result that funds will take longer to reach their ultimate recipients, and
compliance with annuality and programme deadlines will be more and more rare;

130.

Endorses the view of the ECA that the Member States' control systems need to be made more effective
early on so as to enable errors to be forestalled when projects are in their initial stages, and is of the
opinion that national officials involved in project assessment and analysis should be given full training
in order to ensure that they act with the necessary speed in the use of Structural Funds;

131. Notes the Commission's recommendation to the Member States that they should make use from now
on of the simplifications provided for in the new rules governing the Structural Funds for the period
2007 to 2013 (1), for instance by using flat-rate amounts for indirect costs under the European Social
Fund, which should, however, be kept to a minimum and expressed as comprehensively as possible,
and considers this recommendation to be of paramount importance;

132. Considers it vital to gauge structural policy trends in the light of meaningful indicators and targets,
which should lend themselves to comparison and, as far as possible, aggregation in the short term,
thus serving to avoid what would inevitably be rough and hazy assessments that would not leave
sufficient time to make corrections;

(1) OJ L 210, 31.7.2006, p. 1.

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Internal policies

133. Notes with concern that, in general in relation to internal policies, once again the ECA's audit revealed
two important weaknesses, on the one hand ‘a material level of error in payments to beneficiaries’ and
on the other ‘in the Commission's supervisory and control systems’, which ‘do not sufficiently mitigate
the inherent risk of the reimbursement of overstated costs’ (Annual Report, conclusions, point 7.30);

134. Notes that, moreover, as in previous years, the ECA also pointed out persistent delays by the

Commission in making payments to beneficiaries;

135. Deeply regrets the critical assessment of the ECA in this area, which is under the Commission's direct
financial management, and urges the Commission to do its utmost to take the necessary action in
order to avoid the same number of weaknesses next year;

136. Considers that the simplification of the calculation rules for claimed costs is a necessary step in
improving the situation, and invites the Commission to continue its efforts to have in place the most
easily applicable rules for beneficiaries;

137.

Emphasises that the Commission must comply with the provisions of the Financial Regulation
regarding deadlines for expenditure operations, and asks it to take serious measures in order to avoid
the current delays in payments, which are persistent;

138. Welcomes the possibility of declaring indirect costs for grant purposes on a flat-rate basis, as provided
for in Regulation (EC) No 1081/2006 of the European Parliament and of the Council of 5 July 2006
on the European Social Fund (1);

139. Calls on the Member States, in collaboration with the Commission, to improve the supervisory and
control systems that they bring to bear on cost claims made by recipients of financial contributions;

140.

Endorses the view of the ECA that the financial management of internal policies needs to be improved
and efforts set in motion to simplify the rules applying to programmes by employing lump-sum
financing and switching to a results-based financing system;

141.

Points out that the European Year of Workers' Mobility, celebrated in 2006, notwithstanding its
modest budget served to reveal some of the obstacles to free movement, but has not yet led to any real
change;

142. Applauds the investment in the new EURES platform, launched in 2006, which has already proved its
added value for genuine mobility and free movement in the European labour market; notes that,
despite that investment, many language barriers have been encountered, the implication being that a
linguistic approach similar to that applied to students in European mobility programmes might be the
right choice;

Transport and tourism

143. Notes that in the 2006 budget, as finally adopted and amended in the course of the year, a total of
transport policies in commitment appropriations and

EUR 963,8 million was included for
EUR 891,4 million was available in payment appropriations; notes further that of these amounts:

— EUR 699,8 million was available in commitment appropriations and EUR 684 million in

payment appropriations for Trans-European Networks for Transport (TEN-T) projects,

(1) OJ L 210, 31.7.2006, p. 12.

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— EUR 18,1 million was available in commitments and EUR 19,1 million in payments for transport

safety,

— EUR 36 million was available in commitments and EUR 11,7 million in payments for the Marco

Polo programme,

— EUR 5,5 million was available in commitments and payments for the pilot project on road freight
transport safety, and payment appropriations have been reduced to EUR 0,15 million via the
global transfer;

144. Welcomes the continuing high rates of utilisation of both commitment and payment appropriations
for TEN-T projects, both reaching almost 100 %, and calls on Member States to ensure that adequate
funding is made available from national budgets to match this Community commitment;

145. Notes with concern the low rate of utilisation of commitment appropriations for transport safety
(34 %), for which via a carry-over a large part of the sum initially available in 2006 was committed in
2007, and the low rate of utilisation of payment appropriations for the Marco Polo Programme
(44,8 %), and is particularly concerned by the very low rate of utilisation of payment appropriations
for the pilot project on safety in the TEN-T road sector (29,6 %), in part due to the late signature of
contracts and consequent late start of the project; therefore calls on the Commission to launch in
future the call for proposals and tenders as early as possible, so as to make full use of commitment and
payment appropriations;

146. Calls on the Commission and the budgetary authority to ensure that when the budget for pilot projects
is adopted,
the right balance between the amounts available for commitment and payment
appropriations is found, and that that balance reflects the fact that the time needed to bring projects to
payment stage is usually longer than one budget year;

147. Notes with satisfaction that the ECA's analysis of the implementation of internal control standards on
the regularity and legality of underlying financial transactions shows that those carried out by the
Directorate-General for Energy and Transport comply with requirements in the areas of risk analysis
and management, management information, reporting improprieties and supervision; nevertheless
calls on the Directorate-General for Energy and Transport to use analysis of types and rates of errors to
develop a risk-based control strategy in its ex-ante review of cost statements received from beneficiaries;

Internal market and consumer protection

148. Welcomes the absence of critical observations on internal market policy, customs policy and consumer

protection policy in the ECA's Annual Report;

149.

150.

Believes that the execution rate of 85 % of budget line 12 02 01 in the area of internal market policy
requires improvement, in light with the statement of the Commission that this consists in an increase
of commitment appropriations of EUR 1,05 million added by the budgetary authority during the
budgetary procedure which was not foreseen in the budgetary planning; acknowledges, however, the
efforts to improve budgetary planning indicated by an execution rate of almost 100 % in 2007;

Believes that the execution rate of 48 % of budget line 14 02 01 in the area of customs policy is very
low, which is, according to the Commission, the result of a policy change in the tendering procedure
moving away from the award of separate contracts towards implementing long-term framework
contracts; appreciates therefore the increase in the execution rate to 83 % in 2007, which already
shows the positive results of this policy change, notwithstanding the need for further improvement;

151. Welcomes the execution rate of 96 % of budget line 17 02 01 in the area of consumer protection

policy;

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Civil liberties, justice and home affairs

152. Welcomes the fact that progress has been achieved in the level of implementation of budget payments
for the area of freedom, security and justice (86,3 % in comparison to 79,8 % in 2005); calls on the
Directorate-General for Justice, Freedom and Security to continue its efforts in this regard, but deplores
the relatively low level of implementation of commitments (94,5 % in comparison to 97,7 % in 2005);
calls on the Directorate-General for Justice, Freedom and Security to try to maximise the level of
implementation of commitments and payments in 2007, despite the delays in the legislative
procedures for the creation of funds;

153.

Takes note of the remarks made by the ECA in its Special Report No 3/2007 concerning the
management of the European Refugee Fund from 2000 to 2004; calls on the Commission to take
these remarks into account, in particular as regards the implementation of the European Refugee Fund
(ERF III) and the other funds created in 2007;

Women's rights and gender equality

154. Reminds the Commission that, under Article 3(2) of the EC Treaty, the promotion of gender equality is
a fundamental objective of the Community and should be respected in all Community activities;
stresses further that the Commission must ensure that gender equality is taken into account in the
implementation of the budget and that actions should be evaluated from the perspective of the
difference of their impact on men and women;

155. Observes with regret that the practice of gender budgeting has still not been implemented; therefore
reiterates its demand for gender mainstreaming to become a reality in budgetary planning and the
financing of Community programmes;

156. Notes the continuously low payment utilisation rates of the Daphne programme and urges the
Commission to take the necessary steps in order to improve the situation and avoid expenditure being
decommitted;

157. Considers that greater attention should be paid to promoting women's participation in the knowledge
society and labour market and, consequently, to the high-quality training and employment of women
in the field of information and communication technologies;

Research and development

158. Welcomes the swift and clear steps undertaken by the Research family after the discharge concerning
the financial year 2005 in order to remedy the shortcomings noted; is aware that the results will be
first visible in year n + 2;

159. Welcomes the improvements in the Commission's control strategy and the increased number of ex-post

financial audits carried out in the context of the Sixth Framework programme in 2006;

160. Notes, however, that the ECA, as in previous years, indicated material errors in this policy area, and
invites the Commission to continue its work in order next year to achieve a real decrease in the level of
errors;

Environment, public health and food safety

161. Considers the overall implementation rates of the budgetary headings for environment, public health

and food safety satisfactory;

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162.

Emphasises, in particular, that the implementation of the LIFE III programme, which represents 58 %
of the operational budget for the policy area ‘Environment’, achieved an implementation rate of over
98,7 % in commitment appropriations;

163.

Points out, however, that the execution of certain commitment appropriations, such as certain strands
of Community action in the fields of civil protection and marine pollution, appears to be problematic,
mainly due to the poor quality of proposals and bids submitted and to certain restrictions imposed by
the legal basis, such as a limited maximum Community financial contribution;

164. Underlines the overall implementation rate of 85,76 % of payment appropriations in the area of the

environment, which represents a significant increase compared to 2005 (78,39 %);

165. Notes that the payment rates for environment, health and food safety are relatively low, mainly due to
difficulties in planning payment appropriation needs and partly due to the fact that a number of
appropriations are non-differentiated, and that, therefore, a significant number of payments takes place
one year after commitments are made; acknowledges that the Commission depends in part on a swift
submission of bills for beneficiaries and contractors, and that the amounts of final payments to
projects are often lower than first anticipated;

166. Calls on the Commission to continue its efforts to improve those administrative procedures which

have an impact on the implementation of commitment and payment appropriations;

Culture and education

167. Notes with concern that the audit of contracts in the area of education and culture resulted in
adjustment of 12,3 % of ineligible costs in favour of the Commission, which leaves open the question
of the eligibility of reimbursements in projects which have not been audited;

168. Notes that, concerning culture and education policy, although progress has been made since 2005
with the last series of audits contributing additional information, the instrument for auditing and
supervising the national agencies did not in fact change and the Directorate-General for Education and
Culture (DG EAC) had to acknowledge a number of weaknesses;

169. Regrets the fact that the ECA found delays by the Commission in making payments to beneficiaries

and that DG EAC had no reliable information on these late payments;

170. Notes with concern that, according to the ECA's Annual Report, ‘the Commission has not complied
with the Financial Regulation to carry out checks on the management and control systems of the
National Agencies before entrusting them with the implementation of Community actions’ (Annex,
point 7.1);

171. Notes with great concern that for the e-learning programme, the average administrative cost per
successful application was EUR 22 000, while the average amount per grant was only EUR 4 931; asks
the Commission to explain the large difference between these two figures and to take the necessary
measures to decrease it;

172. Notes that, according to the DG EAC 2006 annual activity report, the Commission is implementing
several action plans (at least six) to remedy its management weaknesses, but regrets the fact that the
current situation as regards the action plans is not clear; regrets the fact that concrete answers were not
given during the hearing in preparation for the discharge;

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173. Asks the Commission to provide its Committee on Budgetary Control with a comprehensive and up-
to-date list of national agencies and the state of play of the analysis of the declarations of assurance
presented by these agencies, and urges the Commission to improve the scope, quality and follow-up of
the system audits of national agencies in the field of education and culture;

174. Notes the ECA's repeated recommendation that ‘efforts should be continued to simplify the rules
covering these programmes, where possible making more extensive use of lump sum financing and
move to a results-based financing system’; calls therefore for greater simplification and more extensive
use of flat-rate arrangements;

175. Welcomes the ECA's recommendation to the Commission to make increased use, in line with the
Financial Regulation, of lump-sum and flat-rate financing in order to facilitate the awarding of grants;

176. Notes that about 70 % of the budget in the area of education and culture is managed through national
agencies; notes with concern that in 2006 in a few cases severe and systematic weaknesses in the
management of funds were detected; acknowledges at the same time that the Commission is taking
steps to strengthen the control framework; expects the Commission to report back on the results of
measures taken before the discharge procedure in respect of the financial year 2007;

177.

Shares the view that Member States should be more aware of their responsibilities as regards the
functioning of national agencies; hopes that the new declarations of assurance by national authorities
will improve Member States' procedures for the control and auditing of national agencies;

178. Calls on the Commission to issue strict guidelines on the transparency of application and selection
procedures for the multiannual programmes; expects it, together with the executive agencies and
national agencies, to further improve communication with applicants and beneficiaries;

179.

Is concerned at shortcomings in the data available regarding certain aspects of the implementation of
the multiannual programmes; requests in particular full information from the Commission about the
extent of late payments to beneficiaries; supports the Ombudsman's new own-initiative inquiry in this
respect; notes that 23 % of payments were late in 2007; notes that the Commission is currently
revising its definition of a late payment, and looks forward to receiving more information in this
regard;

180.

Takes note of the increased efforts undertaken by the Commission to enhance its ability to listen to
citizens' concerns via its communication tools; encourages the Directorate-General for Communica-
tion to make better use of simplified funding mechanisms for measures targeted at civil society, along
the lines foreseen by DG EAC in the Europe for Citizens programme;

External action

181. Urges the Commission to present its definition of a non-governmental organisation, focusing not only
on legal aspects but also on the way the non-governmental financing of these organisations is ensured;

182. Recalls that funds spent on external actions in 2006 totalled EUR 5,867 billion and payments
EUR 5,186 billion; notes with concern the following findings in the ECA's Annual Report:

— a high incidence of error in the sample tested at the level of project-implementing organisations,

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— weaknesses in the supervisory and control systems designed to ensure the legality and regularity

at the level of project-implementing organisations,

— that the highest risk areas were again the contracting procedures, the eligibility of expenditure at

project level and the insufficiency of supporting documentation;

183. Regrets the ECA's finding that, as concerns the annual activity report of DG AIDCO,

‘the material
incidence of error and the weaknesses in the supervisory and control systems designed to ensure the
legality and regularity of the transactions at the level of project implementing organisations in the area
of external actions found by the ECA are not sufficiently reflected in the annual activity report and
declaration of Europe Aid Cooperation Office’ (point 2.17 and Table 2.1 of the Annual Report);

184. Notes also with regret that once again in the analysis of the annual management plans of some
Directorates-General there is no indication of external auditors, nor of the particular risks associated
with the different types of implementing organisation (NGO, international organisation, government
institution) and funding methods (grant, budgetary support, trust fund) (point 8.28 of the Annual
Report);

185. Notes with concern that the ECA's findings referred to above were the same in its 2005 Annual
Report, i.e. inconsistency of external audit information submitted to headquarters, lack of systematic
centralisation of this information in order to reach conclusions and insufficient follow-up; therefore
asks the Commission to react to these findings urgently;

186. Regrets also that according to the ECA's Annual Report ‘the Internal Audit Capability (IAC) does not at
present provide an annual overall assessment of the state of internal control in Europe-Aid and DG
ECHO (…) Despite the creation during 2006 of two additional posts in the IAC, it does not seem
feasible with the present staff complement to carry out, within the three-year cycle proposed, the full
audit coverage identified in the Europe-Aid Audit Needs Assessment’ (point 8.30 of the Annual
Report);

187. Asks the Commission to carry out an annual overall assessment of the state of play of internal control

in DG AIDCO and to evaluate whether additional posts are necessary in the IAC service;

188. Notes the situation criticised by the ECA as regards the Commission's ex-post control activities
(points 8.23 and 8.33 of the Annual Report), and calls on the Commission to regularly inform its
Committee on Budgetary Control of the steps taken to remedy the situation;

189.

Invites the Commission to further improve DG AIDCO's risk assessment by making reference to the
findings of auditors at project level and by making a distinction according to the different types of
implementing organisation and funding method;

190.

Invites DG AIDCO to improve the terms of reference of its external audits to cover all known risk
areas,
including the verification of compliance with the Commission's requirements regarding
contracting procedures and the eligibility of expenditure;

191. Underlines that in the period 2000 to 2006, EU contributions to the UN have increased by 700 %
(from EUR 200 million in 2000 to EUR 1,4 billion in 2007); cannot understand the lack of follow-up
of funds transferred to international trust funds by the Commission;

192.

In this context, expresses its concern at the lack of information necessary for the discharge authority to
proceed to a meaningful discharge in respect of the funds implemented under the external action
heading;

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193.

Insists that a harmonised information system should be developed in order to provide the discharge
authority in particular, and the public in general, with a fully transparent database containing a full
overview of projects financed with EU funds in the world, and the final recipients of these funds; is of
the opinion that, preferably, the Common Relex Information System (CRIS) database should be
enabled to deliver this kind of information;

194. Recalls that, under the Financial Regulation, the Commission should have been able since May 2007 to
immediately identify the final beneficiaries and implementing actors of any project financed or co-
financed with EU funds;

195. Considers that the visibility, political guidance and possibility of control by the Commission of
funds (where the EU is a major donor) should be strengthened, without

international
compromising the effectiveness of action in this field;

trust

196.

Invites the Commission to present to it a plan to further increase EU ownership of external actions;

197.

Expresses its concern at the fact that in the two cases where it asked for the list of projects financed by
EU funds, it took the Commission 2 ½ months to deliver the list of projects financed under CARDS
(Community assistance for reconstruction, development and stabilisation), and 13 months to provide
basic information about the projects co-financed with EU funds in Iraq; insists on the immediate
rectification of this situation for all funds managed under external actions;

198. Urges the Commission to address very seriously the deficiencies regarding contracting procedures and
the eligibility of expenditure, and deeply regrets the critical assessment of the ECA in this area, which is
under the Commission's direct financial management;

199. Agrees with the ECA that the Commission should include information on all audits of projects in the
CRIS and should better link this information to project management information; also asks the
Commission's EuropeAid headquarters to review the financial information provided by delegations in
order to ensure its completeness and consistency;

200.

Invites the Commission to improve transparency and access to documentation relating to projects
managed by UN agencies, and to continue to develop clear guidelines and procedures within FAFA,
setting out the framework for managing the financial contributions made by the Commission to the
UN;

201.

Invites the Commission to report to it on controls undertaken under FAFA;

202. Appreciates the results of the audit of the implementation of the Phare and ISPA instruments in
Bulgaria and Romania and the assistance programme for Turkey, which identified an insignificant level
of error; takes note of the errors and weaknesses found in relation to the implementation of the Sapard
instrument in Bulgaria and Romania; calls on the Commission to continue working with the
authorities of both countries to ensure that all requirements for public tendering and sound financial
management are met and that adequate assurance of the correctness, regularity and eligibility of claims
for Community assistance is provided;

203. Notes the ECA's assessment that the national supervisory systems linked to the Decentralised

Implementation Systems of Bulgaria, Romania and Turkey remained weak;

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204. Reiterates its concern at delays in the accreditation of the Extended Decentralised Implementation
System (EDIS) in Bulgaria, and urges the Commission and the Bulgarian authorities to step up their
cooperation in order to ensure that adequate management and control structures, as well as
administrative capacities, are put in place to allow efficient functioning of the EDIS;

205.

206.

Supports the recommendation of the ECA to the Commission that the Commission closely monitor
the effective functioning of national supervisory and control systems, notably the preparation and
management of tenders in Turkey, procurement under the EDIS in Bulgaria and Romania and the
timely delivery of national co-financing; underlines the need to strengthen the administrative capacity
of those Member States that have recently acceded and those countries which are in the course of
accession;

that several remedial measures were introduced by the
Is pleased with the ECA's assessment
Commission in the follow-up to the ECA's special report on twinning from 2003;
invites the
Commission to motivate beneficiary governments more strongly to make use of the outputs of
projects carried out in the context of their reform efforts; supports the ECA's recommendation to the
Commission that the Commission reduce the level of detail of the twinning contracts in order to allow
greater flexibility of project management;

207. Notes the ECA's findings as to the legality and regularity of transactions in the field of external actions
and of the related supervisory and control systems; invites the Commission to undertake all necessary
system improvements so as to ensure that irregularities identified at the level of project-implementing
organisations in third countries are removed;

208.

Invites the Commission to present to it a report on what exactly has been done to alleviate the
situation of Iraqi refugees and displaced persons;

209.

Emphasises its interest regarding assistance provided to Afghanistan, and invites the Commission to
present to it a report on the state of play of the implementation of EU funds in Afghanistan, and to
comment on the expulsion from that country of the acting EU representative on a charge of having
communicated with the Afghan Taliban;

210.

Expects to receive annual reports on budget implementation contracts, an annual list of projects and
their location and lists of final beneficiaries; considers that its rapporteur for the discharge should have
access to information declared confidential
for security reasons; welcomes the Commission's
commitment to renegotiate relevant agreements on trust funds with the UN in order to achieve joint
reporting guidelines and disclosure of final beneficiaries; welcomes the Commission's commitment to
organise annual meetings between Parliament and senior UN staff responsible for the management of
multi-donor trust funds, and is of the opinion that this would provide a framework for the provision
by the UN of additional information regarding EU funds;

Humanitarian aid and development

211. Regrets that the ECA's assessment of internal audits in DG ECHO is only ‘partially satisfactory’

(Annex 8.2 to the Annual Report);

212.

Fully supports the ECA's conclusions concerning DG ECHO in the Annual Report as follows:
‘DG
ECHO should clarify the rules on eligibility of expenditure to prevent varying interpretations and the
balance between DG ECHO's headquarters and field audits of implementing partners should be
reviewed, in order to obtain a better view of the reality of project expenditure’ (points 8.11 and 8.18 of
the Annual Report);

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213. Regrets the finding set out at point 2.1 of the annual activity report of the Directorate-General for
Development (DG DEV) to the effect that ‘Ensuring the coherence of Community policies with an
impact on developing countries, is a major source of risk. This risk is most relevant to respect to trade,
notably Economic Partnerships Agreement (EPA) negotiations. This represents a critical dimension of
development policy but the capacity in this area is concentrated in DG Trade. This risk persists in spite
of the reinforcement and concentration of the responsibilities related to trade following DEV's
reorganisation in July 2006’;

214. Asks the Commission to present to its Committee on Budgetary Control its ideas on how to confront
this situation and the measures to be taken in 2008 to improve the functioning of the internal control
system in DG DEV with regard to the level of implementation of internal control standards;

Euro-Mediterranean Partnership

215. Notes with satisfaction that, according to the ECA Special Report No 5/2006 concerning the MEDA
programme, ‘the Commission's management of the MEDA programme has clearly improved since the
early years and can be considered as satisfactory’;

216. Notes furthermore, as concluded by the ECA, that, as a result of devolution, Commission delegations
have played an important role in the implementation of the programme by helping partner countries
to deal with the procedural aspects of procurement;

217. Asks the Commission to regularly inform it of the carrying out of on-the-spot checks and inspections,
identifying notable cases of suspected fraud or other financial irregularities during the last year of
implementation of the MEDA programme;

218.

Looks forward to an increase in the visibility of actions financed by the EU via international trust
funds, in particular in the context of the sums totalling more than EUR 1 billion which have been
transferred from the EU budget to UN and World Bank funds; urges the Commission to ensure that
political guidance, visibility and control of the funds are improved;

219.

Invites the Commission regularly to present to it specific measures to further increase EU ownership of
its external actions in their geographical contexts, in accordance with the principles of efficiency,
accountability and visibility;

220. Calls on the Commission to inform it efficiently and rapidly about the use of EU funds via
international trust funds in Iraq;
invites the Commission to update and give substance to this
information, and to propose a system which enables Parliament to see in a clear and readable way what
exactly has been co-financed by EU funds via international trust funds anywhere in the world;

221. Welcomes the significant

increase in the implementation rate of commitment and payment

appropriations for pre-accession strategy in 2006, as compared to 2005;

Development

222. Congratulates the Commission on its initiative to improve reporting of the progress made by
development policy interventions towards achieving the Millennium Development Goals; trusts that
this will make a real contribution to improving accountability in this area; looks forward to receiving
details of the evaluation of the pilot phase introduced in 2007;

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223. Draws attention to the benchmark, agreed by the Commission, of 20 % of funding under the
Development Cooperation Instrument being allocated to basic and secondary education and basic
health; looks forward to receiving details of the implementation of this benchmark in 2007;

224. Welcomes the Commission's initiative to develop a structured approach to support supreme audit
institutions in countries receiving budget support; notes however that democratic accountability at the
level of partner countries cannot be achieved without strengthening parliamentary budget control
bodies, as required by Article 25(1)(b) of Regulation (EC) No 1905/2006 of the European Parliament
and of the Council of 18 December 2006 establishing a financing instrument for development
cooperation (1);

225. Notes that in 2006, 91 % of budget support from the Community budget was delivered in the form of
sector budget support, which is better targeted than general budget support and therefore leads to
lower risks; questions the Commission's ‘dynamic interpretation’ of the eligibility criteria for budget
support, which, according to the ECA, increases risk; believes that budget support should only be
undertaken in countries that already meet a minimum standard of credible management of public
finances;

226.

Invites the Commission to improve transparency and access to documentation relating to budget
support actions, particularly by establishing agreements with beneficiary countries analogous to FAFA
and setting out a framework for managing the financial contributions made by the Commission to the
UN;

227. Congratulates the Commission on reducing the level of reste à liquider (RAL) dating from commitments
made by EuropeAid before 2001 by 39 % in 2006; requests that it receive regular updates of changes
in levels of normal and abnormal RAL;

228. Notes the criticisms of Commission Technical Assistance projects made by the ECA in its Special
Report No 6/2007; notes further that the Commission will address these questions in its Strategy to
meet EU aid effectiveness targets on Technical Cooperation and Project Implementation Units, due by
the
June 2008;
implementation of this strategy;

in due course, an assessment of

looks forward to receiving,

the results of

229. Welcomes the measures implemented by the Commission to promote donor coordination in the area
of Technical Assistance; emphasises the importance of a coordinated approach, not only at EU level
but among all donors, and looks forward to receiving details of the progress of this initiative;

Administrative expenditure

Agencies

230. Notes that in 2006, there were 24 agencies in operation (including two executive agencies), compared

with 16 in 2005, covering an extensive range of functions in various locations in the EU;

231. Notes that, as in 2003, 2004 and 2005, the Internal Auditor of the Commission expressed in its
annual activity report for 2006 a reservation about the audits of the regulatory agencies: ‘While the
IAS received posts for the audit of regulatory agencies, the parallel increase in the number of the
agencies, now 23, still does not enable the IAS to properly fulfil its obligation assigned by article 185
of the Financial Regulation. At the end of 2006, all the agencies were audited at least once over a three-
year period instead of once every year as provided for by the Financial Regulation’ (point 3.b);

(1) OJ L 378, 27.12.2006, p. 41.

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232. Calls for an analysis of decentralisation and its effects on Commission staff; asks the Commission to

present a timetable for a review of its internal organisation in light of decentralisation;

233. Requests a peer review after three years of existence of each executive agency to asses the added value
of programme implementation by executive agencies in comparison with the relevant Directorate-
General;

234. Notes the finding of the ECA at point 10.29 of its Annual Report that ‘the disbursement of subsidies
paid by the Commission from the Community budget is not based on sufficiently justified estimates of
the agencies cash requirements. This, combined with the size of carry-overs, leads them to hold
sizeable cash balances (1). The ECA recommends that the level of subsidies paid to the agencies is in
line with their real cash requirements’;

235. Asks the Commission to follow more closely the cash balances of the agencies and to impose more
stringent obligations on them as regards the submission, in payment requests, of rigorous forecasts of
real cash requirements in order to avoid unnecessary cash movements and to have better future
estimates;

236. Calls for subconsolidation of agencies' accounts;

Community buildings policy

237.

Is concerned at the 2006 global structural deficit, which again reached the significant amount of
EUR 5 million for maintenance and refurbishment of all buildings owned by the Commission
(including the Berlaymont); welcomes the patrimonial study commissioned by the Office for
Infrastructures and Logistics — Brussels (OIB) in 2007, which should provide a first reasoned estimate
of the amount required and a timetable for the work necessary to ensure the best possible management
of the Commission's property investments;

238.

Expects the Commission to keep its competent committees informed of the outcome of this study and
of the planning forecast, with special emphasis on details of the Berlaymont building;

239.

Invites the Commission to inform it of its follow-up to the ECA's Special Report No 2/2007, in
particular as regards improved cooperation, including the formulation of a common property policy
involving the creation of a Community instrument covering buildings and the financial and staffing
arrangements relating thereto;

240. Requests the Commission to integrate the results of staff screening and of its Communication on
policy for the accommodation of commission services in Brussels and Luxembourg (COM(2007) 501),
to revise the space need set out therein accordingly and to report on the results of this exercise by
September 2008;

241.

Suggests that there should be a provision in the EU's consolidated accounts for major building
maintenance work;

242. Reiterates its view that a study should be made of the feasibility of establishing a European property
authority with responsibility for the construction and maintenance of the buildings of the EU
institutions and bodies;

(1) Amount of cash held by the agencies at the end of 2006 (excluding the Office for Harmonization in the Internal Market,
the Community Plant Variety Office, the Translation Centre for the bodies of the European Union and the European
GNSS Supervisory Authority): EUR 213 million, compared to EUR 810 million in appropriations.

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CONCLUSIONS CONCERNING THE SPECIAL REPORTS ISSUED BY THE COURT OF AUDITORS

Part I: Special Report No 1/2007 concerning the implementation of the mid-term processes,
Structural Funds 2000-2006

243. Notes that the European Council agreed at its meeting in Berlin in March 1999 that EUR 195 billion
(EUR 219 billion in 2005 prices) should be made available from the Structural Funds (1) for the period
2000-2006, and that an additional EUR 16 billion for the years 2004-2006 should be allocated to
around 200 programmes in the new Member States (2);

244. Notes that the implementation of programmes from the period 1994-1999 encountered a delay,

which had as one consequence the late programming for the period 2000-2006;

245. As a consequence, is concerned that the database for the mid-term evaluation processes may not have

been sufficiently large to arrive at robust conclusions;

246. Notes furthermore the findings of ECA's special reports 7/2003 and 10/2006 on the ex-ante and ex-
post evaluation of Structural Funds expenditure respectively, in which the ECA highlighted that:

— budgetary allocations were determined by maximising likely absorption of funding,

— ex-ante evaluations had little impact on the programming process,

— significant weaknesses were found in the ex-post evaluations and the Commission's oversight of

them;

247. Highlights that the Commission described the overall aim of the mid-term evaluation in its working

document No 8 as follows:

— to assess whether the various forms of assistance remain the appropriate means to address the

issues confronting the region or sector,

— to review whether the strategic axes, priorities and objectives are coherent, appropriate and still

relevant,

— to appraise how far progress has been made towards the achievement of these objectives and the

extent to which they can actually be achieved,

— to assess the quantification of objectives, specifically the extent to which they have facilitated
monitoring and evaluation;
to which horizontal priorities — equal
opportunities and the environment in particular — have been integrated into the forms of
assistance,

to assess the extent

— to analyse the adequacy of the implementation and monitoring arrangements; and to present the

results against the indicators agreed for the performance reserve;

(1) Structural Funds aim at financing sustainable socioeconomic and environmental development programmes in the
Member States. In particular, measures and programmes should support innovation, research and development,
information technology, clean and efficient use of energy, protection of environment, lifelong learning and social
inclusion. The new programming period tried to achieve a greater degree of concentration, more devolved management
structures, greater efficiency and tighter budgetary control (Lisbon European Council meeting — March 2000).
(2) For the period 2000-2006 approximately EUR 260 billion was spent on structural measures. Of this sum EUR 213
billion was earmarked for the old 15 Member States: structural funds programmes received EUR 195 billion and the
Cohesion Fund EUR 18 billion. EUR 47 billion was set aside for the new Member States (pre-accession funds and
structural measures). For the years 2004-2006, about EUR 16 billion was allocated to around 200 programmes in the
new Member States.

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248. Welcomes that the evaluations proved that the strategies adopted by the Member States were still
appropriate and that the financial absorption had clearly improved; however, it was impossible to
assess effectiveness or to measure impact of the programmes/projects, since the available set of data
were often considered to be insufficient;

249.

Is deeply worried that the Commission described the Member States' monitoring systems as weak; as a
consequence any faulty implementation of programmes and projects was difficult to detect, ex-post
evaluations were hampered and the protection of the Communities' financial interests was not ensured;
irregularities worth EUR 600 million were detected in the area of Structural Funds in 2005 only;

250.

Insists, therefore, that high priority be given in the future to the setting-up of sound monitoring
systems in the Member States as a measure to prevent irregularities and possible fraud;

251. Underlines furthermore the importance of analytical evaluations arriving at operational conclusions

and recommendations;

252. Regrets that it was difficult to compare the evaluation results because the Member States were not
asked to follow a standardised evaluation model; calls therefore on the Commission to draw up an
indicator or benchmarking system which will lead in time to more harmonised evaluation reports,
thereby improving comparability and, subsequently, the analytical depth of these reports;

253. Notes that the n + 2 rule lead to a greater use of appropriations; points out, however, that thereby

financial absorption also became an aim in itself;

254. Notes furthermore that the appropriations of the performance reserve were allocated following the
perceived need to maximise absorption of EU funds, rather than concentrating spending on activities
which were assessed as particularly effective;
therefore infrastructure projects were the prime
beneficiaries; overall, budgets were shifted away from underspending measures;

255. Regrets that, as a consequence of favouring absorption, horizontal priorities — like environment and
equal opportunity — and policy priorities — like the Lisbon or Gothenburg strategies — were often
not taken into consideration;

256. Regrets also that ‘deadweight’ (1) and substitution effects were often ignored;

257.

Shares the ECA's view on ‘(…) tensions inherent in the planning and management of the Structural
Funds (…)’ (2) during the period 2000-2006, such as:

— tensions between effective and economic spending (value for money) and maximising absorption,

— tensions caused by the n + 2 rule enabling, on the one hand, well planned expenditures, and, on

the other hand, facilitating easy allocation of reserves,

— and tensions between a well-intentioned mid-term evaluation and the lack of data;

(1) A ‘deadweight’ effect exists where an activity or investment would have been undertaken in the absence of financing.
(2) Point 51.

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258. Recognises, at the same time, that the Commission undertook to address a number of weaknesses in
Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the
European Regional Development Fund, the European Social Fund and the Cohesion Fund (1):

— the general requirement for mid-term evaluation was replaced by need-based ongoing evaluations
to assess the implementation of a programme and react to changes of the external environment,

— national performance and contingency reserves became an option, and

— the n + 2 rule will (for a limited period) become an n + 3 rule for Member States whose GDP per

head from 2001 to 2003 was below 85 % of the EU-25 average;

259. Calls on the Commission to make clear guidelines available to the Member States at the beginning of

the programming period;

260. Welcomes the fact that the results of the evaluation reports were taken into consideration when the
new regulations governing the Structural Funds during the period 2007 to 2013 were drafted; regrets
however that the findings of Parliament following the publication of ECA's Special Report 1/2007 will
only be of limited value for the current programming period;

261. Calls therefore on the Commission to take the necessary steps to fully involve Parliament in the
modifications to the Structural Funds' regulations it intends to introduce in the run-up to the next
financing period starting in 2014;

262.

Is of the opinion that the Structural Funds' regulations should provide for an incremental learning
process to be reflected in the legal provisions; this seems all the more important as ex-post evaluations
at the end of a programming period cannot be concluded in time before a regulation covering the new
financing and programming period enters into force; in addition, Parliament's competent committees
should be regularly consulted at the different stages during the financing period;

263. Calls on the ECA and the Commission to report back on measures taken in reaction to Parliament's
findings during the 2006 discharge procedure; in addition, calls on the Commission to present the
findings of the 2000-2006 ex-post evaluations to its Committee on Budgetary Control;

264. Asks the ECA to analyse the efficiency, the effectiveness and the impact of measures financed by the

Structural Funds in a special report at the given moment;

Part II: Special Report No 2/2007 concerning the institutions' expenditure on buildings

265. Accepts that long-term planning and budgetary forecasts in the building sector are difficult because
appropriations are decided on an annual basis, and because key political decisions with major
implications for office space, such as enlargements, are not precisely foreseeable;
in addition,
implementation of decisions in the building sector requires significant lead time; suggests that there
should be a provision in the Union's consolidated accounts for major maintenance work;

266. Welcomes the fact that the EU institutions offer elected representatives and officials — in general —

appropriate working conditions;

(1) OJ L 210, 31.7.2006, p. 25.

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267. Regrets, however, that the EU institutions have never undertaken to develop a common buildings
policy, which may have allowed them to make important savings; calls on the EU institutions to renew
their efforts to develop a common buildings policy and to report to the competent parliamentary
committee in time for 2007 discharge procedure;

268. Calls on the EU institutions to develop common criteria for calculating office space and costs, and,

subsequently, to appraise both short- and long-term needs;

269. Acknowledges in this context that the EU institutions have given priority to the purchase of buildings,

as acquisition is 40 to 50 % cheaper than renting;

270. Notes that the ECA recommended already in 1979 that rental contracts should include an option to

buy at a price which takes into account rent already paid (acquisitive emphyteusis);

271. Regrets that the ECA's comments on the purchase of the IPE 1 — three buildings in Strasbourg draw
an incomplete picture of the situation in 2006; in this context, points to the findings of its resolution
of 26 September 2006 accompanying the decision on the discharge for the financial year 2004 (1) and
in particular to points 19 and 20 thereof;

272. Asks the Commission why it was indispensable to rent the Mondrian building and which alternatives it

had considered;

273. Acknowledges that the EU institutions prefer bringing together services operating in similar areas;

274. Recognises the tension between the practical advantages of geographical proximity when staying in the
European quarter, and the financial disadvantages stemming from creating a very high and predictable
demand on the local housing market;

275. Acknowledges in this context the efforts made by the Commission to reduce the percentage of its

office space in the European quarter, which currently stands at 82 %;

276. Calls on the EU institutions to evaluate carefully the necessity of staying in the European quarter when

they rehouse parts of their services;

277. Asks its administration why the hand-over of the D4-D5 buildings was delayed and why it was not
possible to take into consideration at an earlier stage public procurement legislation, complex
negotiation procedures and a good neighbourhood policy;

278. Asks the EU institutions why they made, according to the ECA, such a wide use of the negotiated
procedure, avoiding public tender, thereby paying a price for the construction of buildings or for
works which was not determined by open competition;

279.

Insists that the EU institutions should make wide-spread use of competitive tendering;

(1) OJ L 177, 6.7.2007, p. 3.

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280. Underlines that in the absence of competitive tendering procedures, purchase prices for constructions

and/or long-term rents should not exceed construction costs;

281. Considers that long-term leasehold contracts should indicate the purchase price, and that appropriate
financial guarantees should be required from contractors in order to ensure the full performance of
contracts until final acceptance (1);

282. Calls on the EU institutions to establish ‘headquarter agreements’ with the host countries of the EU

institutions' main working places;

283.

Points out that, according to Article 14 of the Financial Regulation, the Communities and the bodies
set up by them may not raise loans; in this context suggests that greater use could be made of the
financial services of the European Investment Bank, and of tendering procedures on the financial
market to determine the interest rate;

284. Reiterates its position on the budgetisation of its buildings policy, as repeated in point 5 of its
resolution of 24 April 2007 accompanying the decision on the discharge for the financial year 2005,
Section I — European Parliament (2): (…) Reminds its competent bodies of its decision that ‘…
repayment on buildings … should be set as part of the budgetary strategy’; criticises therefore its
competent bodies for continuously failing to budget with sufficient clarity Parliament's property policy
for future acquisitions (the budget line ‘acquisition of immovable property’ only shows token entries
for 2005, 2006 and 2007);

285. Asks the ECA to explain how the EU institutions could make better use of

‘differentiated

appropriations’;

286.

Emphasises that the EU institutions should have complete administrative, technical and financial
control over their building projects; to this end they should either make use of highly qualified
consultants or develop appropriate expertise within the interinstitutional framework (3);

287. Reminds the EU institutions of

its demand expressed in paragraph 20 of

its abovementioned
resolution accompanying the discharge decision for the financial year 2004:
‘(…) charges its
administration, in consultation with the other Union institutions, to draw up a report examining
whether it might be feasible to establish a European Buildings Authority charged with responsibility for
the construction and maintenance of the buildings of the EU institutions and bodies; calls for such
report to be forwarded to the Committee on Budgetary Control by 1 October 2007 at the latest’;

Part III: Special Report No 3/2007 concerning the management of the European Refugee Fund
(2000-2004)

288. Reminds all actors of the fact that the European Refugee Fund (ERF) was set up with the aim of
providing a framework for the preparation of a common policy on asylum, including common
European arrangements for asylum as a component of the EU's objective of progressively creating an
area of freedom, security and justice which will be open to those legitimately seeking protection within
it;

289. Underlines the fact that since the creation of ERF I a large number of directives, regulations and
decisions has been adopted, some of which have been directly or indirectly promoted by the creation
of the fund;

(1) Article 102 of the Financial Regulation.
(2) OJ L 187, 15.7.2008, p. 3.
(3) ECA Annual Report concerning the financial year 1999, point 6.30 (OJ C 342, 1.12.2000, p. 1).

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290. Underlines the fact that ERF III (1) will work under different conditions from those of ERF I; therefore, it
should be closely linked to the implementation of Council Directives 2001/55/EC (2) and 2004/83/
EC (3);

291.

292.

293.

Stresses that ERF III should, however, continue to contribute to the further development of an EU
policy in this area, in particular the preparation of a review of the ‘Dublin II convention’, including a
refocusing on a voluntary redeployment of asylum seekers within the EU in order to come to a burden-
sharing arrangement;

Invites the Commission to continue its efforts to prevent different interpretations of ERF rules by
Member States, and welcomes the launch of seminars on good practice disseminating experience
gained in some Member States to others, in particular to new Member States still less familiar with the
ERF;

Invites the Commission to do everything possible to speed up payments to Member States and to raise
awareness among Member States of
in particular for smaller
beneficiaries, in time in order not to endanger innovative projects and to allow also NGOs with a
smaller budget backing to participate in ERF III;

the need to disburse payments,

294.

Insists that national declarations of assurance should cover all areas where Member States are co-
responsible for the spending of EU funds, e.g. the ERF;

295.

Invites the Directorate-General for Budget to reconsider its practice of recoveries, as recovery via non-
related projects is counterproductive to the functioning of specific programmes (in particular resulting
in late payments of pre-financing amounts); recovery orders should be issued to the Ministry of Finance
of the Member State concerned, rather than automatically recovering from any upcoming payment to
that Member State;

296.

Invites the Commission to use the ERF even more proactively, in order to enhance progress towards a
Common Policy on Asylum;

297.

Invites the Commission to continue its efforts to ensure the harmonisation of statistical data in order
to avoid distortions with programmes where the sound distribution of funds depends on statistical
data provided by Eurostat;

Part IV: Special Report No 4/2007 on physical and substitution checks on export refund
consignments

298. Welcomes the publication of Special Report No 4/2007 and urges the Commission to take on board
the shortcomings identified in the report, as well as to take action in line with the recommendations of
the ECA;

299. Agrees with the Commission that until the last export refund is paid,

‘a fully operational control
system must remain in place’; expects therefore the Commission to use its power of initiative to come
up with concrete proposals in order to improve the situation;

300. Welcomes in this respect Council Regulation (EC) No 14/2008 of 17 December 2007 amending
Regulation (EEC) No 386/90 on the monitoring carried out at the time of export of agricultural
products receiving refunds or other amounts (4), which enables Member States which apply risk

(1) Decision No 573/2007/EC of the European Parliament and of the Council of 23 May 2007 establishing the European
Refugee Fund for the period 2008 to 2013 as part of the general programme ‘Solidarity and Management of Migration
Flows’ (OJ L 144, 6.6.2007, p. 1).

(2) Council Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary protection in the event of
a mass influx of displaced persons and on measures promoting a balance of efforts between Member States in receiving
such persons and bearing the consequences thereof (OJ L 212, 7.8.2001, p. 12).

(3) Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status of third-
country nationals or stateless persons as refugees or as persons who otherwise need international protection and the
content of the protection granted (OJ L 304, 30.9.2004, p. 12).

(4) OJ L 8, 11.1.2008, p. 1.

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analysis to set the control rate to 5 % per Member State instead of per customs office; regrets however
the lack of a clear timeline in the Commission's replies regarding its future proposals, given the short
time prior to the phasing-out of export refunds;

301. Deplores the several weaknesses reducing the effectiveness of physical checks,

in particular the
predictability of checks, the high number of low value and low risk exports being checked as well as
the method used to check bulk shipments of goods;

302. As far as substitution checks are concerned, regrets that the checks were not detailed enough and that

the interpretation of the number of checks to be made varied between Member States;

303. Welcomes the adequate coverage of key controls by the Commission when monitoring the checks;
however shares the ECA's concerns that the Commission has not reacted, with legislative changes or
timely financial corrections, despite the fact that it was aware of the weaknesses for some considerable
time;

304. Notes and welcomes the fact that the integrity of seals is verified by the competent authorities at the
Eastern borders of the EU, and encourages the other Member States to follow this example;

305.

Invites the Commission to continue its efforts to modify the relevant legislation with a view of
addressing, among others, the issue of ‘tail-gate inspections’, and to introduce the obligatory use of risk
analysis for export procedures, in line with the ECA's assessment;

Part V: Special Report No 5/2007 on the Commission's management of
programme

the CARDS

306. Considers that the CARDS programme has made an important contribution to the stabilisation and

rapprochement policy;

307. Regrets the considerable lack of transparency in management by the Commission and its delegations,
which renders an evaluation impossible; considers it unacceptable that the Commission has no
overview of the projects funded under CARDS, whereas the European Agency for Reconstruction
(EAR) has made available to the public the list of contracts it has signed, specifying programmes and
projects;

308. Recalls the recommendations set out in its resolution of 24 April 2007 accompanying the decision on
the discharge for the implementation of the budget of the EAR for the financial year 2005 (1), and in
particular point 23 thereof;

309.

Is very surprised to learn that, in the countries where CARDS was under the auspices of the EAR, the
Agency alone is responsible for the programming of the Instrument for Pre-Accession Assistance (IPA)
for 2007 and 2008 and for the preparation of tenders requiring the Commission's signature; notes
that this is contrary to the EAR's mandate and that, in particular, the procedure for the preparation of
tenders resembles the practice of ‘TAOs’ (Technical Assistance Offices), which were condemned by
Parliament and have since been closed down;

310.

Is of the opinion, in this context, that the Commission did not meet in 2006 the obligations arising
from its own decision taken in 2005 on the phasing out of the EAR, which provided that the
Commission delegations in the various Balkan countries should take full charge from the beginning of
the IPA;

311. Requests the ECA to carry out a follow-up audit focusing on a comparison between the Commission's
management of the CARDS programme and the EAR's management of this programme on behalf of
the Commission, the results of which should be presented to Parliament by September 2008;

(1) OJ L 187, 15.7.2008, p. 183.

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Part VI: Special Report No 7/2007 on the control, inspection and sanction systems relating to
the rules on conservation of Community fisheries resources

312. Welcomes the publication of the report and congratulates the ECA for its most valuable contribution

in addressing this very important issue of European policy;

313.

Takes a serious view of the ECA's criticisms and considers that they should result in far-reaching
changes of policy;

314. Welcomes the Commission's declared intention to take on board those shortcomings identified in the
report, as well as to take action in line with the recommendations of the ECA; regrets however the lack
of a clear timeline in the Commission's replies as to its future proposals;

315. Welcomes the Slovenian Presidency's initiative of calling an Extraordinary Fisheries Council at the

Fisheries Control of 18 February 2008 to discuss this report;

316. Reaffirms that sound management of resources in line with the precautionary principle and the
principle of sustainable development requires the strengthening of existing control mechanisms so that
the flag State and the coastal State where vessels are operating can access information in real time on
the vessel's location and the fishing operations being carried out whenever they wish;

317. Calls on the Commission, at the same time, when revising Council Regulation (EEC) No 2847/93 of
12 October 1993 establishing a control system applicable to the common fisheries policy (the Control
Regulation) (1), to propose measures to guarantee the quality and reliability of catch data;

318. Observes that there is a fundamental problem in addition to control mechanisms, namely regarding
the levels of fishing quotas negotiated by the Member States; stresses that it is unacceptable for Member
States, year after year, to set quotas at a higher level than recommended by researchers for sustainable
fisheries;

319.

Stresses that, in addition to control mechanisms, the system of negotiated quotas is a fundamental
problem; considers it unsatisfactory that, year after year, quotas are consistently set higher than
researchers recommend in order to maintain viable fish stocks;

320. Welcomes the judgment of the European Court of Justice in case C-304/02 Commission v French
Republic (2), which has provided the Community with a clear confirmation of the role and obligations
of Member States with regard to control and enforcement of common fisheries policy (CFP) rules;

321. Notes, however, that 21 years have elapsed between the time when the infringements were detected
and the time of this decision, and that the sustainability of European fisheries cannot cope with such
timelags in correcting wrongdoings;

322.

Stresses the importance of action by the Commission against individual Member States where there is a
suspicion that they are violating or ignoring the control, inspection or sanctions systems of the CFP;

323. Welcomes the Commission initiative to explore the possibility of including in the proposed new
initiatives regarding illegal, unregulated and unreported (IUU) fishing harmonised administrative
sanctions to be applied for certain specific ‘IUU-offences’;

(1) OJ L 261, 20.10.1993, p. 1.
(2)

[2005] ECR I-6263.

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324. Welcomes the Communication from the Commission (COM(2007) 39)

launching a debate on
improving fishing capacity and effort indicators under the common fisheries policy, and therefore
expects the Commission to use its power of initiative to come up with concrete proposals really to
improve the CFP;

325. Notes and welcomes the fact that after publication of Council Regulation (EC) No 1966/2006 of
21 December 2006 on electronic recording and reporting of fishing activities and on means of remote
sensing (1), the Commission immediately prepared its implementing rules (Commission Regulation
(EC) No 1566/2007 of 21 December 2007 laying down detailed rules for the implementation of
Council Regulation (EC) No 1966/2006 on electronic recording and reporting of fishing activities and
on means of remote sensing (2));

326. Regrets that, even if the Commission proposed rather simple and controllable effort regimes, the
system was made considerably more complicated, due to a high number of derogations introduced on
request by Member States during discussions in Council and which have reduced considerably the
controllability of the whole system;

327. Considers that the current legislative framework is too complex and not up to date and urges the
Commission to use its power of initiative to come up with concrete proposals in order to improve the
situation with the aim of simplification and harmonisation of CFP legislation;

328. Deplores the several weaknesses reducing the effectiveness of the physical checks, and the failures in
the transmission data system as a whole in the Member States, as well as the lack of a European control
culture in the fish sector;

329. Welcomes the Commission's efforts to improve the situation with regard to the data on catches and on
sales, and the timing of reporting, by using the new technologies; considers that the regulation
concerning the electronic recording and reporting will increase the efficiency of validation systems, for
example by providing for immediate electronic transmission of a copy of the sales note to the flag State
and landing State authorities so that it can be cross-checked with the landing declaration;

330.

Invites the Commission to increase mutual assistance and administrative cooperation between Member
States' authorities and the exchange of information between competent national officials by creating a
system like that already in place for the VAT community system;

331. Considers it of great importance for control and for the whole CFP to have a system which allows the
follow-up of catches from origin to final consumer, as already exists in the internal market with respect
to all other food products, and urges the Commission to put in place such a system;

332.

Stresses that the fishing quotas set must be respected and upheld; considers that the Commission must
take strong, resolute action in the event of any suspicion of breaches of, or fraud against, the quota
system;

333.

Invites the Commission and the Member States to increase the competences of the Community
Fisheries Control Agency and to promote the Agency's important executive role in the control and
harmonisation of the CFP and in improving transparency and coordination by the establishment of
common practices under the scope of the joint deployment plans;

334.

Invites the Commission to propose and the Member States to accept the increasing of the competences
of the Commission's controllers, who should have greater powers in order to create a common
European control strategy in the CFP;

(1) OJ L 409, 30.12.2006, p. 1; corrected by OJ L 36, 8.2.2007, p. 3.
(2) OJ L 340, 22.12.2007, p. 46.

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335. Considers, in this context, that the cost-benefit ratio existing between the resources dedicated to
control activities in the CFP and the results obtained by these controls (the proportionality and cost-
effectiveness of controls) should be a key element to be taken into consideration by the Commission in
its future proposals concerning the CFP;

336. Notes, in this regard, that the most cost-effective mechanisms of control are those where stakeholders

have a direct interest in preserving the sustainability of fisheries;

337.

Invites the Member States, in the framework of effort reduction, to decide whether such reduction will
be accomplished through:

(a)

a reduction of fishing time, without a reduction of capacity;

(b)

a reduction of capacity, without a reduction of fishing time; or

(c)

a combination of the two;

and to put in place the necessary structural measures to mitigate the social impact of this reduction;

338.

Invites the Commission to continue its efforts to modify the relevant legislation to address, among
other things, the issue of overcapacity, and to propose measures to reduce structural overcapacity in
the fishing industry;

339. Calls upon the Commission to review alternative political solutions under which the need for controls
and sanctions would be reduced by increasing individual professional fishermen's responsibility for,
and interest in, viable stocks;

Part VII: Special Report No 9/2007 on evaluating the EU Research and Technological
Development (RTD)
framework programmes — could the Commission's approach be
improved?

340. Acknowledges that the audit covered the monitoring and evaluation arrangements in place for the last
three programming periods since 1995 and also an outlook for the RTD framework programme 2007
to 2013;

341.

Emphasises that the framework programmes running between 1995 and 2006 were endowed with
EUR 42,63 billion, making them the most important financial instrument contributing to the Lisbon
Strategy; under the current financial framework, the 7th framework programme received EUR 50,52
billion;

342. Notes that the ECA addressed the question of whether the Commission's approach to assessing the
results of the framework programmes was adequate, looking in particular at the intervention logic, the
evaluation strategy and methodologies;

343. Welcomes that over the years the Commission has already introduced a considerable number of

improvements;

344. Observes that the ECA noticed poorly defined programme objectives and a lack of explicit intervention
logic; acknowledges however that programme objectives are decided by stakeholders and the co-
legislators; calls therefore on the decision-makers to pay particular attention to the definition of
attainable objectives; recognises that a more explicit intervention logic is embedded in the 7th RTD
Framework Programme (1); underlines
that objectives must be operational and measurable
(‘benchmarking’) to allow for the use of performance indicators and effective monitoring;

(1) Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the
technological development and
the European Community for

research,

Seventh Framework Programme of
demonstration activities (2007-2013) (OJ L 412, 30.12.2006, p. 1).

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345. Notices that the ECA criticised the absence of a comprehensive evaluation strategy; points in this
context to the improvements introduced by the impact assessment and ex-ante evaluation of the 7th
RTD framework programme (SEC(2005) 430);

346. Acknowledges the ECA's criticism that the existing coordination mechanisms among directorates
general implementing the RTD framework programmes were not effective; remains however, at this
stage, unconvinced by the idea of creating a ‘joint evaluation office’; suggests rather that the
Directorate-General for Research assume more responsibility and a coordinating role; shares the ECA's
view that external expert advice should be established at an early stage and remain in place to
guarantee a consistent and coherent approach, in particular as evaluations are scheduled for 2008 (ex-
post evaluation of the 6th RTD framework programme), for 2009 (factual interim report on the 7th
RTD framework programme), for 2010 (mid-term evaluation of the 7th RTD framework programme)
and for 2015 (ex-post evaluation of the 7th RTD framework programme);

347. Notes the ECA's remark that inadequate methodological guidance was provided; calls therefore on the
Commission to consider publishing an evaluation manual; is aware that the reporting requirements
were revised under the 7th RTD framework programme with a view to creating a more robust data
base for evaluation and monitoring;

348.

Is of the opinion that the quality of the mid-term and ex-post evaluations will improve the clearer the
terms of reference which are provided (i.e. measurable objectives, expected impact, effective
monitoring, a sound data base); emphasises that evaluations will be more useful
if framework
programmes are adaptable (‘learning’ programmes) and conclusions drawn can be used to improve
ongoing programmes;

349. Calls on the Commission to bear in mind the recommendations of the ECA when carrying out the

scheduled evaluations in 2008, 2009, 2010 and 2015;

350. Calls on the ECA to follow up its audit in time for the 2010 discharge exercise and to report back to
the Committee on Budgetary Control; asks the ECA to also look at the amounts spent on evaluations
in relation to the value of specific programmes and at how this percentage relates to other RTD
programmes in third countries (e.g. Canada).