Report from the Commission to the European Parliament and the Council on the Management of EU-funds in Bulgaria
Date: 2008-07-23
Institutions: European Commission
Subjects: Bulgaria, EU control, cooperation policy, corruption, exchange of information, public contract

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.7.2008 
COM(2008) 496 final 

REPORT FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

On the Management of EU-funds in Bulgaria 

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1. 

INTRODUCTION 

Bulgaria has received important financial and technical support from the European Union in 
the  pre-accession  period  and  is  eligible  for  continued  high  levels  of  financial  support  under 
the  current  2007  –  2013  financial  perspective  (€6.852  billion  from  the  Structural  Funds 
alone).  Pre-accession  support  -  the  PHARE  programme,  SAPARD  (agriculture)  and  ISPA 
(infrastructure)  –  and  temporary  financial  assistance  provided  for  in  the  Act  of  Accession  – 
the  Transition  Facility  and  the  Cash-flow  and  Schengen  Facility  –  were  designed  to  help 
Bulgaria  consolidate  socio-economic  reform  and  to  prepare  for  the  absorption  of  larger 
amounts of structural funds. These programmes are at various stages of implementation, but 
not all funds have been contracted and there are significant amounts remaining to be paid. The 
structural funds and other programme (such as the Schengen Facility) falling under the current 
financial  perspectives  are  at  an  early  stage  of  implementation,  with  only  advance  payments 
having been made. 

While specific implementation modalities differ between these various programmes, there are 
common  management  and  financial  control  standards  that  must  be  met.  For  example,  strict 
procurement  procedures  (e.g.  on  tendering,  evaluation  and  award  of  contract)  must  be 
followed and rigorous financial control must be exercised. European Union funding is made 
available only once sound financial management can be demonstrated and certified. 

Bulgaria is experiencing difficulties in many of these programmes and has to demonstrate that 
sound financial management structures are in place and operating effectively. Administrative 
capacity is weak. Beyond that, there have been serious allegations of irregularities as well as 
suspicions  of  fraud  and  conflicts  of  interest  in  the  award  of  contracts.  Investigations  by  the 
EU anti-fraud office, OLAF, into the management of EU funds by the Bulgarian authorities 
have  led  to  the  temporary  suspension  of  pre-accession  funds  and  the  freezing  of  payments 
under various other financial instruments.  

Given  its  responsibility  under  the  Treaty  for  the  implementation  of  the  budget,  and  in 
particular having regard to the need for the sound financial management of EU funds and for 
protecting  expenditures  under  the  EU  budget,  the  European  Commission  considers  it 
necessary  to  inform  the  European  Parliament  and  the  Council,  i.e.  the  budgetary  authority, 
about  the  situation  in  Bulgaria,  the  steps  that  are  being  taken  by  the  Commission  and  the 
remedial actions that are being taken by or that are expected from the Bulgarian authorities. 
This  report  is  not  exhaustive,  but  examines  the  situation  for  the  main  funding  programmes, 
provides an overview of measures taken to date and an indication of next steps. 

The  situation  is  serious.  In  recognising  the  dimensions  of  the  problem,  the  Bulgarian 
government has recently taken a number of corrective steps. It has started work on procedural 
and legislative changes needed to effectively deal with conflict of interest, transparency and 
efficiency  of  public  procurement  procedures,  amendments  in  legislation,  treatment  of 
irregularities as well as empowerment of the national authorizing officer (NAO). It has made 
some  key  high  level  appointments  –  such  as  the  appointment  of  a  Vice-Prime  Minister 
responsible  for  the  co-ordination  of  EU  funds  who  is  at  the  same  time  the  head  of  the 
Bulgarian Anti Fraud Coordination Service. New Directors of the Audit Authority and of the 
Central  Finance  and  Contracting  Unit  (CFCU)  have  been  appointed.  These  are  steps  in  the 
right direction. But, all of this must be followed up by credible, structural corrective actions 
and a fundamental reform. 

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2. 

STATE OF PLAY OF THE DIFFERENT FINANCIAL INSTRUMENTS 

2.1. 

Financial instruments concerned by irregularities or deficiencies 

2.1.1.  PHARE/ Transition Facility 

The  PHARE  and  Transition  Facility  programmes  support  Bulgaria  to  complete 
institutional  reforms  and  to  prepare  for  the  absorption  of  much  larger  amounts  of 
assistance under the Structural Funds. The total amount allocated from 2004 to 2007 
and  remaining  under  implementation  in  Bulgaria  under  the  PHARE  and  Transition 
Facility programmes is around € 650 million.  The final deadline for the contracting 
of  PHARE  funds  is  November  2008  and  for  the  Transition  Facility  is  December 
2009.  The  funds  are  managed  by  the  Bulgarian  authorities  under  the  extended 
decentralised  implementation  system  by  four  implementing  agencies,  which  were 
accredited by the Commission in June 2007. 

Problems 

Monitoring  and  audits  show  serious  weaknesses  in  the  management  and  control 
systems and point to a number of irregularities, suspected fraud cases and conflicts of 
interest  between  the  programme  administration  and  contractors.  In  February,  the 
Commission  services  suspended  payments  to  two  Implementing  Agencies,  namely 
the Central Finance and Contracting Unit (CFCU) and the Implementing Agency at 
the  Ministry  of  Regional  Development  and  Public  Work  (MRDPW)  and  requested 
they  take  corrective  actions  to  improve  their  management  and  control  systems.  To 
date,  the  Bulgarian  authorities  have  not  taken  all  necessary  steps  to  ensure  sound 
financial  management  and  have  not  adequately  followed  up  on  the  detected 
irregularities.  

Next steps 

The  Commission  is  now  withdrawing  the  right  to  manage  aid  under  the  Phare 
programme and the Transition Facility from the two Implementing Agencies (CFCU 
and MRDPW). Consequently, the CFCU and the MRPDW may no longer conclude 
contracts under these programmes. This will affect the €250 million of funding still 
to  be  contracted.  Twinning  contracts  included  in  these  funds  are  exempt  from  this 
Decision  as  no  irregularities  have  been  detected  in  their  management.  These 
contracts are managed with the close involvement by the partner Member State.  

Furthermore,  the  Commission  maintains  the  suspension  of  payments  to  these  two 
agencies.  The  Commission  will  closely  monitor  the  situation  in  the  light  of  further 
steps that the Bulgarian authorities take to ensure sound financial management and to 
follow up irregularities detected. 

2.1.2. 

SAPARD 

Bulgaria is eligible for SAPARD funding in the amount of € 445 million, of which 
until now € 235 million have been paid  

Problems 

There are three sets of problems concerning SAPARD.  

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The  first  relates  to  projects  worth  €  26  million  which  are  currently  subject  to 
investigations  by  OLAF  regarding  implementation  difficulties  due  to  fraud  and 
possibly  corruption.  It  seems  that  the  Bulgarian  authorities  have  recently  started 
recovery procedures.  

The second concerns investigations into the activities of the ex- executive director of 
the SAPARD Agency for a measure having a total expenditure of € 10 million. The 
executive director was dismissed in 2007 after allegations of wrongdoing in regard to 
the management of State Fund Agriculture. The Bulgarian authorities have originally 
held that the allegations were not related to the management of the SAPARD funds. 
However, in a subsequent investigation, the Prosecutor's Office of Bulgaria accused 
the  ex-  executive  director  for  "wrongful  approval  of  projects"  under  the  measure 
"investments  in  wholesale  markets".  Criminal  proceedings  have  been  initiated 
against him. 

The  third  problem  relates  to  the  findings  of  a  recent  audit  by  the  Commission 
services, covering a total amount of € 105 m illion still to be paid from SAPARD to 
beneficiaries (representing 63% of the remaining total amount to be disbursed under 
the programme). The audit revealed serious deficiencies regarding the control system 
for investment aid for three core Programme measures.  

Next steps 

The Commission has informed the National Authorizing Officer (hereafter NAO) of 
the  results  of  the  audit  on  the  three  investment  measures  and  has  asked  for  the 
implementation  of  an  action  plan.  The  NAO  is  asked  to  transmit  this  action  plan 
together with a timetable for its implementation to the Commission by 31.07.2008. 

Moreover  the  Commission  has  informed  the  Bulgarian  authorities  that  future 
payment  applications  from  the  NAO  to  the  Commission  for  any  additional 
expenditure  incurred  under  these  three  measures  are  suspended  until  Bulgaria 
corrects  its  system  to  the  satisfaction  of  the  Commission.  The  NAO  should  inform 
the Commission of necessary improvements in the system by September 2008. The 
Commission will consider resuming payments when information is received from the 
Bulgarian authorities that corrective action has been fully implemented and when this 
information  is  confirmed  by  an  independent  audit  body.  Payments  by  the  NAO  to 
final  beneficiaries  under  the  measures  should  only  resume  once  the  action  plan  is 
implemented. 

2.1.3. 

ISPA - Cohesion Fund  

While  many  Member  States  have  experienced  difficulties  with  the  timely 
implementation  of  the  Trans-European  Network  and  environment  infrastructure 
investments,  Bulgaria  is  particularly  slow.  To  date  only  18%  (€156  million  of  the 
available  funding  €879  million)  has  been  abso rbed  for  these  projects,  which  were 
started  under  the  ISPA  pre-accession  instrument  but  are  now  being  finalised  under 
the  Cohesion  Fund  rules.  In  December  2007  the  Commission  asked  the  national 
authorities  to  present  an  Action  Plan  aimed  at  speeding  up  implementation  of 
projects  identified  as  problematic.  This  action  plan  was  reviewed  by  both  the 
responsible ministries and the Commission services, and specific causes of delay as 
well as necessary improvements were identified. These improvements must be made 

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rapidly in order to ensure the implementation of all projects before the final deadline 
for certification of expenditures (the end of 2010). 

Problems  

In January 2008, allegations were made in the Bulgarian press against the Executive 
Director  of  the  National  Road  Infrastructure  Fund  (NRIF)  concerning  a  conflict  of 
interest related to the signing of contracts between the NRIF and a construction firm 
controlled  by  a  family  relative.  In  addition,  two  NRIF  officials  responsible  for  the 
implementation  of  EU  funds  were  arrested  and  charged  with  taking  bribes.  On  24 
January,  the  Commission  sent  a  letter  to  the  Ministry  of  Finance  requesting  the 
interruption  of  payments  to  the  NRIF's  three  ongoing  Cohesion  Fund  (ex-ISPA) 
projects and asking that the  NRIF  not sign any new contracts under the 2007-2013 
programmes,  until  the  matter  was  thoroughly  investigated  and  any  necessary 
corrective action taken. The Executive Director has subsequently been replaced.  

Funding  for  the  road  sector  (€144  m illion  for  ongoing  Cohesion  Fund  (ex-ISPA) 
projects)  has  been  interrupted  and  the  preparation  of  a  formal  suspension  is  under 
way.  The  freeze  on  signing  new  contracts  in  the  road  sector  (under  the  2007-2013 
programmes) remains in place.  

to  properly 

Following investigations, the first audit reports submitted by the Ministry of Finance 
to the Commission services failed to reassure the Commission that the NRIF would 
implement  Cohesion  Fund  projects.  The  Commission 
be  able 
recommended that an independent audit be carried out that would then also serve as a 
basis for a concrete and detailed action plan to improve the management and control 
systems in the NRIF. On 18 June 2008, the Commission services received an audit 
report  prepared  by  an  international  audit  company  on  behalf  of  the  Bulgarian 
authorities, together with a detailed action plan based on the 'preliminary' findings of 
this audit company.  

Next steps:  

The  recently  appointed  Deputy  Prime  Minister  for  EU  Funds  is  aware  of  the 
problems and is working to strengthen the general coordination and implementation 
system for the Structural Funds in Bulgaria.  

With a view to simplifying and reinforcing the implementation system, the Bulgarian 
authorities have recently decreased the number of Managing Authorities for ex-ISPA 
projects. This change will bring the National Road Infrastructure Fund under closer 
scrutiny and control of the Ministry of Transport. 

One  of  the  main  conclusions  of  the  external  auditors'  report  is  that  further 
investigations are necessary, in particular as regards a number of possible conflict of 
interest  cases.  The  Bulgarian  authorities  are  currently  in  the  process  of  organising 
investigations in this respect. In parallel, initial steps have been taken towards a more 
general  overhaul  of  the  NRIF's  organisational  structure.  This  should  be  seen  as  an 
essential first step in the detailed action plan referred to above.  

The  timely  and  effective  implementation  of  the  action  plan  will  form  a  crucial 
element of the compliance assessment for the Regional Development and Transport 

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Operational Programmes, where the NRIF is a Beneficiary. Deadlines for completion 
of  this  assessment  are  between  September  and  November  2008.  Certification  of 
expenditure  for  these  Operational  Programmes  is  dependent  upon  a  positive 
compliance assessment opinion from the Compliance Assessment Body. 

The  implementation  of  the  NRIF  action  plan  will  be  reviewed  by  the  Commission 
later this year. On the basis of this review, the Commission will decide whether the 
monitoring and control system and the administrative capacity of the Fund have been 
sufficiently strengthened and hence whether contracting and funding may resume.  

2.2. 

Financial instruments in the initial start-up phase 

A number of programmes are only in the initial phase of implementation. This means 
that only advance payments have been made at this stage, and that the Commission is 
in  the  process  of  examining  whether  the  management  and  control  systems  put  in 
place by Bulgaria to ensure the sound financial management of the funds concerned 
is sufficiently sound.  

2.2.1.  Regional and cohesion funds 

The regional and cohesion funds for Bulgaria for the 2007-2013 period account for € 
5667 million. Preparation and implementation of the new period for Structural Funds 
in Bulgaria started rather well. All programmes where submitted and approved on time 
and actual implementation of a number of Operational Programmes is progressing.  

As  foreseen  in  the  legal  base  of  Cohesion  Policy,  the  Bulgarian  Authorities  are 
currently  undertaking  an  overall  compliance  assessment  of  the  entire  Structural  and 
Cohesion  Funds  management  system.  This  exercise  is  carried  out  under  the 
responsibility  of  the  national  Audit  Authority,  the  strengthening  of  which  remains  a 
major concern to the Commission. In June 2008, a new director was appointed to the 
Audit  Authority  and  a  framework  contract  for  using  external  auditors  was  signed. 
These  two  steps  are  much  welcomed,  but  should  be  followed  up  by  further  actions, 
notably with a view to increasing significantly the in-house administrative capacity of 
this Authority. 

2.2.2.  European Social Fund 

The European Social Fund co-finances two operational programmes in Bulgaria – the 
Human  Resources  Development  Operational  Programme  and  the  Administrative 
Capacity  Operational  Programme.  They  amount  to  €1.185  billion.  The  two 
operational  programmes  were  adopted  in  October  2007  and  the  first  grant  schemes 
and  operations  were  launched  in  2008.  In  accordance  with  the  relevant  financial 
regulation (Regulation 1083/2006) only the automatic advance payments (amounting 
to €59 million) have been made. A compliance assessment of the  management and 
control systems of Bulgaria for the European Social Fund expenditure will be carried 
out by the Commission in the second half of 2008, on the basis of a submission by 
the Bulgarian authorities. 

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Next steps 

The  compliance  assessment  must  provide  assurance  that  the  systems  set  up  by 
Bulgaria are in accordance with the underlying relevant financial Regulation and can 
deliver sound financial management and efficient implementation of the Social Fund. 
No  reimbursement  of  project  expenditure  can  be  made  to  the  Bulgarian  authorities 
until this assessment has been agreed by the Commission. The Bulgarian authorities 
are  expected  to  submit  their  documentation  for  assessment  in  the  summer  or  early 
autumn this year.  

2.2.3.  European Fisheries Fund. 

The European Commission  approved the  Operational Programme  for the Bulgarian 
Fisheries sector for the period 2007-2013 in December 2007. The total eligible public 
expenditure of the programme amounts to €107 million, with EU assistance through 
the  European  Fisheries  Fund  (EFF)  amounting  to  €80  million.   The  programme 
covers  the  entire  territory  of  Bulgaria,  all  of  which  is  designated  as  a  convergence 
region.  

So  far  only  an  advance  payment  has  been  made  and  the  compliance  assessment  is 
expected by December 2008. The effective launch of the programme is foreseen for 
September  2008  with  the  first  call  for  project  proposals.  The  National  Agency  for 
Fisheries and Aquaculture (NAFA) is responsible for the implementation of the EFF 
Operational programme. It is currently reinforcing its administrative capacity dealing 
with  the  implementation  of  the  Operational  programme  and  the  Common  Fisheries 
Policy. 

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Next Steps 

Similar to other structural fund programmes, reimbursement of project expenditure is 
subject  to  a  satisfactory  compliance  assessment.  In  addition  the  EFF  Regulations 
provide a number of possibilities to suspend, interrupt or make financial corrections 
to  the  Operational  Programme  appropriations  in  case  of  irregularities  or  systematic 
deficiencies in the management and control system. An integrated audit approach is 
being  applied  to  the  fisheries  programme  as  well  as  the  structural  and  agricultural 
programmes. 

2.2.4.  Cash Flow and Schengen Facility  

Bulgaria  is  a  beneficiary  of  the  Cash  Flow  and  Schengen  Facility,  with  a  total 
Community  allocation  of  €  239.5  million.  In 
line  with  Article  32  of  the  Accession 
Act, which provides that at least 50% of the total amount must be assigned to actions 
at  the  external  borders  of  the  Union  and  the  implementation  of  Schengen  acquis, 
Bulgaria allocated € 161 million (67%) fo r the Schengen part of the Facility.  

Next steps 

The  Bulgarian  authorities  must  ensure  sound  management  and  control  for  the 
Schengen part of the Facility, particularly with respect to the contracting and public 
procurement  practices.  It  is  not  at  all  clear  whether  the  Central  Financing  and 
Contracting Unit (CFCU), cited above, point 2.1.1., which is embroiled in difficulties 
relative to Phare funding will be able to provide the necessary assurances. Procedural 
safeguards must be put in place by the CFCU to guarantee that any potential or actual 
conflict  of  interests  in  the  evaluation  of  tenders  is  avoided.  In  case  of  serious 
the  management  and  control  systems  significant  financial 
shortcomings 
corrections and/or recoveries can be made at the time of the clearance of accounts. 

in 

2.2.5.  Funds  under  the  General  Programme  "Solidarity  and  Management  of  Migration 

Flows" 

Bulgaria  participates  in  the  General  Programme  and  has  a  combined  allocation  for 
2007 of € 1 million (for 2 of these funds) a nd for 2008 of € 1.8 million (for 3 of the 4 
Funds). 

Next steps 

The  Bulgarian  authorities  designated  to  manage  the  funds  under  the  General 
Programme  "Solidarity  and  management  of  migration  flows"  must  enhance  their 
administrative capacity to prepare the programmes and operate the control systems. 
Absorption capacity must be improved both at the level of the awarding authorities 
as well as at the level of the beneficiaries. 

2.3. 

Co-operation with OLAF  

OLAF  has  conducted  investigations  into  cases  involving  PHARE  and  SAPARD 
funding.  OLAF's  experience  points  to  some  fundamental  weaknesses  in  Bulgarian 
administrative and judicial capacity.  

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There  is  a  lack  of  commitment  to  act  decisively,  swiftly  and  in  cooperation  with 
other  public  authorities  when  fraud  is  identified.  For  example,  the  Bulgarian  body 
involved with the payments under SAPARD, the State Fund Agriculture (SFA) has 
not been proactive in dealing with alleged irregularities, conflict of interest or fraud 
involving such Community funding. There have been serious deficiencies in the level 
of cooperation and co-ordination between the various bodies involved in dealing with 
these  matters.  In  the  SAPARD  case,  the  Supreme  Cassation  Prosecution  Office 
(SCPO) does not appear to have been in a position to forward evidence to the SFA in 
order  to  allow  it  to  commence  financial  recovery  procedures.  On  the  other  hand, 
when  the  SFA  starts  such  recovery  procedures,  the  matter  is  passed  to  the  State 
Recovery Services within the Ministry of Finance. The SFA then seems to have no 
further role in the matter and the process stops. This means in practice that there is no 
focal point that assumes responsibility and ultimately no deterrent to continued bad 
practice. 

The Bulgarian judicial authorities have a tendency to adopt an approach of breaking 
up  a  case  into  smaller  components  which  precludes  an  effective  investigation  and 
judicial  outcome.  There  are  also  instances  of  judicial  proceedings  which  had  been 
opened  but,  subsequently  closed  without 
further 
investigation by OLAF.  

justification, 

frustrating 

In  addition,  OLAF  has  been  faced  with  instances  of  breaches  of  confidentiality, 
improper  transmission  and  leaks  of  confidential  information.  There  is  strong 
suspicion  of  the  involvement  of  organized  crime.  The  recently  appointed  Deputy 
Prime  Minster  is  aware  of  the  situation  and  has  begun  corrective  action.  A 
commitment has been made to prepare and adopt a law, facilitating the work of and 
assisting  OLAF  when  it  conducts  on-the-spot  controls  under  Reg.  (EC)  2185/96. 
Finally,  OLAF  is  working  closely  with  the  Bulgarian  authorities  to  ensure  that  the 
lessons to be learned from the SAPARD fund cases are fully taken account of in both 
the judicial and control treatment of current and future cases.  

3. 

CONCLUSION 

EU funds earmarked for Bulgaria are the practical expression of the Union’s solidarity with 
the citizens of Bulgaria. These funds are aimed at helping less favoured regions in Bulgaria, 
catalysing  needed  investment  in  transport,  telecommunications  and  energy  infrastructure, 
promoting  competitiveness,  fostering  social  cohesion  and  enhancing  Bulgaria’s  overall 
economic performance and stability.  

The efficient use of these funds requires that effective and reliable management and financial 
control  structures  are  in  place  to  foster  sound  implementation  throughout  the  entire  project 
cycle - from the feasibility assessment and project design to tendering and contracting until ex 
ante and ex-post control and evaluation.  

Bulgaria is not able to reap the full benefits of this assistance because of critical weaknesses 
in administrative and judicial capacity, be it at local, regional or central level. The Bulgarian 
public administration suffers from a high turnover of staff, unattractive salaries which create 
opportunities for corruption, and outdated, centralized procedures. In particular hesitation  to 
use enforcement powers to remedy irregularities and fraud by immediate recoveries or other 
protective  measures  and  the  de  facto  non-independence  of  the  national  audit  authority  and 

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implementing  agencies  give  rise  to  serious  concern.  The  lack  of  accountability  and 
transparency in public procurement when tendering EU funds is a grave problem. 

High level corruption and organised crime exacerbates these problems of general weakness in 
administrative and judicial capacity. As highlighted in all reports of the Commission on the 
Cooperation  and  Verification  Mechanism  including  the  one  adopted  alongside  this 
Communication,  continued  commitment  and  results  in  the  fight  against  corruption  and 
organised crime is needed . It impacts directly on Bulgaria's administrative capacity and hence 
its ability to ensure the sound management and efficient delivery of EU funds. Bulgaria needs 
not  only  to  enhance  substantially  its  administrative  capacity  but  also  drastically  curb 
opportunities for high level corruption and effectively fight organized crime.  

Urgent action is needed because deadlines for contracting some of the funds are approaching, 
after which the funds will be lost to Bulgaria. Bulgaria needs to:  

•  Strengthen  administrative  capacity  in  the  management  of  EU  funds,  by  guaranteeing 
stability, training and technical expertise of staff. Appointments to management positions 
must avoid any potential conflicts of interest of interest.  

•  Eliminate existing or potential networks of conflict of interest in the overall management 

of funds. 

•  Improve  the  supervision  and  transparency  of  public  procurement  procedures,  at  central, 

regional and local level in strict conformity with the applicable EU rules.  

•  Increase control of the legality and regularity of expenditure by conducting real and regular 

on the spot checks and audits on its own and across all funding programmes.  

•  Ensure that EU funding is protected and where necessary that recovery orders are applied 
without  delay  directly  by  the  responsible  implementing  or  supervisory  bodies  when 
irregularities or fraud are identified.  

•  Report without delay to the Commission on irregularities or fraud – whether confirmed or 
suspected. Clear definitions of irregularities and fraud and instructions on the procedures to 
be followed in reporting must be established. 

•  Implement measures to prevent breaches of confidentiality, and the improper transmission 
and leaks of confidential information in order to allow for a proper information exchange, 
not undermining the investigation and legal procedures.  

•  Take  protective,  corrective  or  disciplinary  measures  swiftly  where  necessary,  and 

informing the Commission accordingly.  

•  Build on the initial steps taken in improving co-ordination between ministries, between the 

various stakeholders as well as between central, regional and local authorities. 

Some  first  steps  have  been  taken  recently  at  national  level  to  address  these  critical 
deficiencies in programme management and financial control. This movement is positive, in 
the right direction and needs to be sustained. The Commission is prepared to provide advice, 
assistance  and  support  to  Bulgaria  to  remedy  these  problems.  It  calls  on  Member  States  to 
also  assist  Bulgaria  by  continuing  to  provide  independent  high  level  expertise.  As  soon  as 

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Bulgaria has  taken the necessary corrective measures to improve financial  management and 
tighten  control  systems,  the  Commission  is  prepared  to  reverse  its  decision  to  withdraw  the 
accreditation of the two implementing agencies concerned, namely the Central Financing and 
Contracting Unit and the Implementing Agency at the Ministry of Regional Development and 
Public Work. 

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