Communication from the Commission to the European Parliament, the Council and the European Court of auditors - Impact Report on the Commission Action Plan towards an Integrated Internal Control Framework
Date: 2009-02-04
Institutions: European Commission
Subjects: administrative transparency, audit, budgetary control, economic consequence, financial regulation, general budget (EU), report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.2.2009 
COM(2009) 43 final 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN 
COURT OF AUDITORS 

Impact Report on the Commission Action Plan towards an Integrated Internal Control 
Framework 

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COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN 
COURT OF AUDITORS 

Impact Report on the Commission Action Plan towards an Integrated Internal Control 
Framework 

1. 

EXECUTIVE SUMMARY 

In 2005, following successive reports from the European Court of Auditors giving a negative 
opinion on the underlying transactions in a number of key policy areas, the Commission fixed 
the  ambitious  strategic  objective  of  striving  for  a  positive  declaration  of  assurance  from  the 
Court. To reach this objective, and inspired by the Court's Opinion 2/20041 (the "Single Audit 
Opinion"),  the  Commission  proposed  a  "Roadmap  to  an  Integrated  Internal  Control 
Framework2"  in  June  2005,  and  sought  to  reach  "a  common  understanding"  with  the 
Parliament, the Council and the European Court of Auditors on the Roadmap. 

Based on the feedback received, as well as the recommendations in the European Parliament's 
discharge  resolution  20033,  the  ECOFIN  conclusions  of  8  November  2005  and  a  detailed 
assessment  made  for  all  major  spending  areas,  the  Commission  adopted  the  "Action  Plan 
towards an Integrated Internal Control Framework"4 in January 2006. 

While  explicitly  acknowledging  the  Commission's  responsibility  for  the  implementation  of 
the  budget  as  set  out  in  Article  274  of  the  Treaty,  the  Action  Plan  set  out  a  framework  for 
Member States to "cooperate with the Commission to ensure that the appropriations are used 
in accordance with the principles of sound financial management"5. 

In  its  February  2008  Progress  Report6,  the  Commission  reported  that  7  of  the  16  original 
actions had been completed, 6 were substantially complete and 3 could not be implemented or 
were being taken forward in other ways. The Court broadly concurred with the Commission's 
self-assessment  of  completion  rates7.  A  year  later,  the  6  outstanding  actions  have  been 
completed. 

As well as providing the latest information on Action Plan implementation, the main purpose 
of  this  report  is  to  give  an  updated  and  objective  assessment  of  its  impact  based  on 
quantitative  and  qualitative  indicators.  The  overall  conclusion  is  positive,  building  on  the 
findings  in  the  Court's  Annual  Report  on  2007,  which  reports  significant  progress  with  an 
unqualified opinion on the accounts for the first time, and the best DAS ever with some 45% 
of  budget  expenditure  receiving  an  unqualified  opinion  on  the  legality  and  regularity  of 
underlying  transactions.  This  compares  with  6%  in  the  Court’s  Declaration  of  Assurance 

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4 
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6 
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Opinion No 2/2004: OJ C107/1 of 30.4.2004 (the ‘Single Audit’ Opinion). 
COM(2005) 252. 
OJ L 196, 27.7.2005, p. 4. 
COM(2006) 9 and SEC(2006) 49. 
TEC 274 
COM(2008) 110. 
European Court of Auditors, Annual Report for 2007, Table 2.3. 

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given  for  2003.  The  Court  has  also  identified  further  progress  in  the  Commission’s 
supervisory and control systems with, for the first time no systems receiving a 'red light' in the 
2007 report. 

2. 

WHAT IS IMPACT AND HOW CAN IT BE MEASURED? 

The Action Plan proposed a common framework for actions to be taken and the role that the 
Council, Member States and the European Parliament should play in achieving a reliable and 
functioning integrated internal control framework, giving assurance to the Commission and, 
ultimately  to  the  Court  of  Auditors.  Its  impact  could  be  assessed  according  to  different 
criteria: 

–  whether  there  is  evidence  that  the  common  understanding  underpinning  the  Roadmap 
continues to guide the Institutions involved, and that the necessary cooperation, including 
from Member States, is materialising and crystallising around "single audit" principles; 

–  whether the Commission has improved controls where it has full and direct responsibility, 
through  better  audit  coverage,  increased  quality  of  the  Annual  Activity  Reports  and 
effective recovery of undue payments; and 

–  whether,  on  actions  shared  with  Member  State  administrations,  there  is  measurable 
improvement in Member States' control systems due to their own actions and those of the 
Commission and by recovery of undue payments. 

The different levels of Commission leverage must be kept in mind when assessing the impact 
of  the  Action  Plan.  For  these  reasons,  the  present  "Impact  Report"  looks  beyond  simple 
quantitative indicators such as error rates  or  amounts recovered.  For example, guidance can 
help  clarify  legislative  requirements  but  it  does  not  have  a  directly  demonstrable  impact  on 
error  rates  in  the  short  term.  Likewise,  the  improvement  in  Commission  services'  annual 
activity reports is not measured in such terms but rather through the independent qualitative 
appreciation of the Court. 

To give a complete, realistic and objective overall picture the Commission therefore reports 
impact  in  the  following  section  based  on  an  appropriate  mix  of  qualitative  and  quantitative 
indicators.  Where  available,  reference  is  made  to  independent  assessment  by  the  external 
auditor  through  observed  error  rates,  DAS  traffic  lights,  system  assessments  and  other 
observations. This is supplemented with evidence provided from audits opinions delivered by 
the IAS, or from self-assessments and data collected by Commission services. 

3. 

IMPACT AS AT 31 DECEMBER 2008 

A  positive  DAS  is  now  a  recognised  political  imperative,  focusing  attention  across  the 
Institutions.  This  has  helped  mobilise  support  in  Commission  services,  motivating  them  to 
look critically at their controls and supervision, and creating a consensus on actions to prevent 
errors. This is a major achievement in the light of competing objectives, such as reconciling 
the  need  for  extra  auditors  within  tight  staff  limits,  or  reconciling  rapid  disbursement  with 
effective control. 

The  Commission  considers  that  a  common  understanding  has  been  reached,  and  that  the 
to  effectively  guide  further 
conceptual  framework  of 
improvements, such as the debate recently launched on the tolerable risk of error. Interest and 

the  Action  Plan  continues 

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support  from  the  European  Parliament  has  remained  strong  and  co-operation  with  Member 
States  continues  to  improve.  The  impact  assessment  below  is  based  on  specific  indicators, 
action by action8, at 31 December 2008. 

3.1. 

Simplification and common control principles (actions 1-3)9 

Action 1: Simplification of proposed 2007–13 legislation 

Action completed: Simplification for 2007-2013 was originally not as extensive as hoped. In 
addition to the actions set out in the Action Plan concerning simplification, the Commission 
has taken further steps to simplify rules for structural actions through its adoption of proposals 
to amend the relevant Council regulations, with a view to expand the use of flat rates, lump 
sums and unit costs to all types of expenditure for both ERDF and ESF. The Commission will 
consider  proposing  further  measures  in  2009  on  the  basis  of  recommendations  of  a  joint 
Commission/Member State working group to be presented in the first half of 2009. Provided 
support  from  the  European  Parliament  and  the  Council  on  such  measures  is  achieved,  the 
impact of further simplification on the error rate should become apparent from 2010/2011. 

Impact 

Indicator: Percentage of the budget executed through a simplified approach. In Agriculture, 
the  introduction  of  the  Single  Payment  Scheme  has  decoupled  support  from  production  and 
put an end to complex eligibility requirements. The transitional Single Area Payment Scheme 
applied in most EU-12 States goes further as it is solely based land areas. The recent Health 
Check and the single Common Market Organisation have also contributed to simplification. 
In  the  Structural  Funds,  the  use  of  flat  rates  for  overheads  reduces  the  requirement  for 
beneficiaries to analyse and retain cost accounting data and should reduce overpayments due 
to ineligible costs. 

Key supporting information 

The percentage of funds executed through decoupled direct aids has risen from 47% of total 
direct payments in the agricultural sector in 2005 to 83% in 2008, with a targeted increase to 
93%  by  2013  and  beyond.  Around  25%  of  the  EU  budget  is  thus  executed  through  this 
simplified approach. 

Indicator:  Reduced  ECA  error  rates  due  to  clearer  legislation  and  extensive  guidance. 
Considerable  simplification  has  been  made  in  Education  and  Culture  including  lump  sum 
grants  for  the  Lifelong  Learning  Programme.  Future  clarification  on  the  criteria  for  use  of 
average  personnel  costs  in  the  7th  Research  Framework  Programme  will  make  cost  claims 
easier to compile and submit but impact will become evident subsequent to implementation 
from 2009. 

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9 

Actions 2 and 6 are not covered by this report as they were cancelled. 
This  group  of  actions  included  Action  4  on  tolerable  risk,  which  is  reported  in  section  3.3  of  this 
Communication along with the related issues of costs and benefits of controls. 

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Key supporting information 

In  Education  and  Culture,  the  majority  of  grants  (some  80%)  awarded  through  National 
Agencies are lump sums or flat rates. For example, for Comenius partnerships (€106 million), 
itemised actual costs no longer have to be presented and grants are determined on the basis 
of  lump  sums  and  flat  rates  based  on  a  scale  of  unit  costs.  However,  effects  on  error  rates 
have yet to be confirmed. 

Action 3: Control strategies and reasonable assurance 

Action completed: Comprehensive Internal Control Templates were used in all 2007 Annual 
Activity Reports. 

Impact 

Indicator: Improved evaluation by the ECA of the quality of AARs. In its 2007 annual report, 
the  ECA  noted  improvements  in  the  Annual  Activity  Reports  in  Agriculture  and  Cohesion 
Policy. Improvements, supported by a reinforced peer review process, are continuing. 

Key supporting information 

All policy areas received a grade 'B' or above (providing at least supporting evidence for the 
Court’s DAS conclusions after corrections).10 

3.2.  Management declarations and audit assurance (actions 5-8) 

Action 5: National management declarations 

Action  completed  as  revised  and  agreed11:  The  first  set  of  annual  summaries  were  due 
from Member States in February 2008. 

Impact 

Indicator:  Quality  of  summaries  received  and  action  taken  to  improve.  The  levels  of 
compliance with minimum requirements varied. 

For the Structural Funds all Member States but one eventually provided annual summaries 
which  met  the  minimum  requirements.  Information  recently  provided  by  Germany  is  being 
examined  by  the  Commission.  The  Commission  recommended  that  Member  States 
supplement the summaries with a declaration of assurance, but this is not a legal requirement. 
The Commission has issued revised guidance to improve the next set of summaries, due 15 
February 2009. 

In  Agriculture,  Member  States  complied  with  legal  obligations  –  both  concerning  annual 
summaries and the annual statements of assurance that directors of the paying agencies signed 
for the first time. Member States followed the  guidelines on  annual summaries provided by 

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ECA Annual Report on 2007, Table 2.1. 
Article 44 of the Inter-Institutional Agreement and Article 53 (ter) of the Financial Regulation. 

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Commission services, giving a factual overview. However the quality of additional analysis in 
most  the  summaries  could  be  improved.  The  Commission  has  revised  its  guidelines  to 
improve this analysis in the 2008 summaries. 

Key supporting information 

"The  Court  considers  that,  for  this  first  year  of  annual  summaries,  the  Commission  has 
adequately  supervised  the  process  both  by  issuing  clear  guidelines  and  by  pursuing  the 
reasons for non-compliance with deadlines and criteria for scope or quality." It encouraged 
the Commission to identify the summaries' added value for assurance.12 

Indicator:  Receipt  of  ex  ante  declarations  of  assurance  in  Education  and  Culture.  Ex  ante 
declarations from National Authorities for the 2007-13 period provided assurance that these 
are  respecting  minimum  standards  on  control  and  that  the  project  cycle  complies  with 
procedures. 

Key supporting information 

All due ex-ante declarations of assurance in Education and Culture were received. 33 of these 
were  followed  up  via  monitoring  visits  and  all  were  systematically  followed-up  in  the 
framework of the assessment of the Annual Declaration of Assurance. 

Indicator: Member State initiatives on declarations. The Commission supports the voluntary 
initiatives  taken  by  some  Member  States.  Their  coverage  and  nature  vary  and  the  results 
cannot be compared. They provide some supplementary information on control systems. 

Key supporting information 

2008  documents  from  Denmark  (audit  opinion  regarding  EU  funds,  covering  the  European 
Social  Fund,  the  European  Regional  Development  Fund,  agricultural  subsidies,  the  VAT 
contribution and the GNI contribution), the Netherlands (national declaration – agriculture 
only in 2008) and the UK (consolidated statement and audit opinion on the use of EU funds - 
expenditure on EU supported projects). 

Key supporting information 

The Court has stated that "the national declarations can be considered as a new element of 
internal control, and the Commission and the Court should consider them in this respect".13 

Action 7: Increasing the cost-benefit of audits at project level  

Action  completed:  Agreed  upon  procedures  are  used  in  Research  and  External  Aid  to 
improve assurance from external audits of projects by defining audit procedures to be carried 
out.  Such  procedures  have  not  been  introduced  in  Education  and  Culture  as  the  number  of 
grant agreements over the threshold for providing an audit certificate is very limited. Direct 
auditing managed by the Commission is considered more cost effective. 

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ECA Annual Report on 2007, paragraph 2.20. 
ECA Opinion 6/2007. 

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Impact 

Indicator:  Improved  quality  of  reporting  by  external  auditors.  Agreed-upon-procedures,  by 
more  precisely  specifying  the  work  to  be  carried  out  by  the  auditor,  should  increase 
consistency  and  reliability  of  audit  conclusions  and  provide  better  supporting  evidence  for 
management decisions on eligibility of funding. 

Key supporting information 

In External Aid a first assessment of a small number of reports indicated that agreed-upon-
procedures  are  having  the  intended  results  although  the  quality  and  consistency  of  reports 
could be enhanced. 

For  Research  it  is  too  early  to  assess  the  improvement.  Impact  on  errors  cannot  yet  be 
measured and will need to be corroborated by future audits of projects covered under the new 
regime. 

Actions 8 and 8N: Additional assurance from Supreme Audit Institutions 

Action completed: The Commission has established relationships with independent SAIs. 

Impact 

Indicator:  Number  of  SAIs  in  dialogue  with  the  Commission.  Reaction  from  the  SAIs  to 
payment reports from the Commission has been variable but has led to improvements in the 
reports.  

Key supporting information 

Five  SAIs  have  requested  detailed  additional  information  and  analysis  (which  the 
Commission has provided). 

Ten SAIs have made an overarching report on EU financial management, and two more are 
considering it.14 

3.3. 

Single audit approach: sharing results and prioritising cost-benefit 

Actions 3N and 11N: Improved assurance via sanctions and recoveries  

Actions completed: The scope of sanctions was extended in the 2007-13 sectorial legislation 
and  the  Commission  is  taking  a  more  vigorous  approach  to  recoveries  and  sanctions.  Data 
quality on recoveries and financial corrections is being improved. 

Impact 

Indicator:  Reliability,  consistency  and  completeness  of  recovery  data:  The  Court  noted 
improvements in data on 2007 recoveries. Further improvements have been made for the 2008 
accounts,  yet  to  be  audited  by  the  Court,  both  on  Commission  recoveries  and  on  those 
reported by Member States. 

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Dutch EU Trend Report 2008, table 11, p. 52. 

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Key supporting information 

The  Court  stated  "more  information  concerning  the  recovery  of  undue  payments  has  been 
presented … However, the notes to the financial statements do not yet contain complete and 
reliable information on the financial correction activities made by the Member States"15. 

Extension  of  recording  in  ABAC  of  recoveries  by  Commission  services  due  to  control  or 
audit: over €500 million worth of such recoveries was recorded in 2008.  

Indicator:  More  systematic  follow-up  of  DAS  errors:  Commission  services  set  out  in  their 
Annual Activity Reports the follow-up to main findings of the Court and explain differences 
of opinion. The Commission sends Member States each year16 a list of observations made and 
errors found by the Court in their country, seeking information on follow-up and the reasons 
for  the  most  common  errors  in  structural  actions.  The  follow-up  of  DAS  2006  errors  is 
included in the Structural Funds Action Plan17. 

Key supporting information 

The  latest  report,  on  2006  DAS  errors18,  noted  that  when  Member  States  accept  errors 
identified  by  the  ECA,  they  report  for  the  most  part  on  recovery  of  funds  or  withdrawal  of 
ineligible expenditure. 

Indicator: Effectiveness of the recovery process:  

Key supporting information 

For  structural  funds,  an  IAS  review  evidenced  the  significant  progress  made  by  the 
Commission  report  effective  recovery  of  undue  payments.  The  Commission  is  now  able  to 
present an overall table on financial corrections made or in the pipeline, with the number of 
procedures and amounts broken down by programmes and on the sources of correction. The 
overview  shows  that  Commission  controls  are  at  the  starting  point  of  80%  of  corrections 
currently underway. The Commission also carried out verifications19 of the data for structural 
actions in 10 Member States in 2008. 

A second internal audit provides reasonable assurance on the recovery process in centralised 
management, with some qualifications relating to the duration of certain procedures. 20 

For the research area, the audit coverage has increased significantly under the multi-annual 
audit strategy (over 900 audits in total closed for FP6, including 378 in 2007 compared to the 
Action Plan target of 300), giving the research DGs a much wider appreciation of the nature 
and extent of errors. 

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ECA Annual Report 2007, paragraph 1.29. 
Under Council Regulation (EC, Euratom) No 1605/2002 of 25.6.2002 amended by Council Regulation 
(EC, Euratom) No 1995/2006 of 13.12.2006. 
Action 1.4 of SFs Action Plan - COM(2008) 97. 
COM(2008) 112. 
Actions 2.3, 6.1 and 6.2 of SFs Action Plan. 
Internal Audit Service audit of the recovery process in AIDCO, EAC, INFSO, BUDG, Legal Service 
and the Education, Audiovisual and Culture Executive Agency. 

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Indicator:  Volume  of  financial  corrections:  Recoveries  are  made  when  justified,  and 
increasing their value is not a target in itself.  

Key supporting information 

The volume of financial corrections applied by the Commission in the Structural Funds has 
increased  substantially  according  to  provisional  figures:  in  2008  the  total  was  €1.5  billion, 
compared with €288 million in 2007. Further eviden ce of impact is reported in the Structural 
Funds Action Plan progress report, adopted February 200921. 

Action 9: Sharing audit results 

Action completed: An audit recording and monitoring tool is fully operational and effective 
within ABAC for audits principally in centralised direct management. 

Impact 

Indicator: Use of the audit tool and improved coordination of audits. Improved coordination 
increases  efficiency  of  audits  through  making  better  use  of  available  resources  rather  than 
reducing error rates. 

Key supporting information 

Some  5,000  audits  are  recorded  providing  key  information  on  audits  of  individual 
beneficiaries  and  allowing  better  targeting  and  coordination.  Procedures  are  in  place  to 
ensure  systematic  exchange  of  results  on  common  bodies  between  the  Structural  Funds 
DGs.22 

Actions 4, 10 and 11: Tolerable risk and cost-benefit analysis of controls 

Action  completed:  The  Commission  provided  in  its  December  2008  Communication  on 
Tolerable  Risk23  the  results  of  Actions  10  and  11  to  form  a  basis  for  moving  forward 
discussions on tolerable risk. 

Impact 

Indicator: Progress towards a common understanding of Tolerable Risk. Discussions with the 
Budgetary Authority are underway. The Commission is fully committed to these. 

3.4. 

Sector-specific gaps 

Actions 12 and 12N: Address gaps identified by participating services 

Action completed: For Action 12, DGs and services are implementing the core elements of 
the Action Plan in line with the Gap Assessment – clear descriptions of the control approach, 
coordinated audit and control according to agreed standards. 

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COM(2009) xxx 
Action 2.1 of SFs Action Plan. 
COM(2008) 866. 

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Impact 

Indicator: Quality of control systems. 

Key supporting information 

The Court concludes in its 2007 DAS that none of the supervisory and control systems for EU 
funds is ineffective but in some spending areas these may not succeed in reducing errors to an 
acceptable level. 

Indicator: Error rates in FP6. The Court of Auditors stated that although the new strategy for 
FP6  represents  a  sound  basis  for  addressing  the  problems  identified  by  the  Court,  potential 
benefits depend on its full and effective implementation from 2008 onwards. It further noted 
that the strategy includes several initiatives likely to contribute to more effective operation of 
this control including the use of common risk criteria and sample selection methods focusing 
on large beneficiaries.Key supporting information 

The cumulative error rate detected by the Commission for FP6 at the end of 2008 was 2.47%. 
Taking account of the resulting recoveries this is on course for achieving an error rate of less 
than 2% over the lifetime of FP6. 

Action  13:  Analyse  controls  under  Shared  Management  at  regional  level  and  the  value  of 
existing statements 

Action  completed:  The  Commission  has  improved  reporting  in  the  relevant  AARs.  Better 
control arrangements are included in 2007-13 legislation. 

Impact 

Indicator: Quality of Member States' systems. The Structural Funds DGs carry out an annual 
assessment of each Member State system. 

Key supporting information 

DGs REGIO and EMPL presented a detailed assessment of Member States’ systems in their 
2007  AARs24.  Systems  presenting  no  material  deficiencies  in  ERDF  covered  28%  of 
expenditure  plus  11%  with  "qualified  assurance"  with  moderate  impact;  for  the  Cohesion 
Fund and the ESF the figures were 24%/44% and 10%/38% respectively. 

Action 14: Greater guidance for structural funds on managing the risk of error25 

Action  completed:  In  2008  the  Commission  published  new  guidance  documents  for 
managing and certifying authorities. 

Impact 

Indicator:  Member  States'  assessment  against  regulatory  benchmarks. The  Commission  has 
developed  a  self-assessment  tool  to  facilitate  managing  authorities'  self-assessments  against 

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Action 9 of SFs Action Plan. 
Actions 2.4 and 5 of SFs Action Plan. 

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regulatory benchmarks on key elements of internal control. Following 2 pilot studies the tool 
was modified and will be finalised in January 2009 so impact is not yet visible. 

Action 15: Promote ‘Contracts of Confidence’ for Structural Funds26 

Action completed: 7 Contracts have been signed.  Two  more contracts should be signed by 
February 2009. The concept of reliance on work of national audit bodies is now included in 
2007-2013 legislation.Impact 

Indicator:  Single  audit  approach  extended  under  Contracts  of  Confidence.  Member  State 
systems  covered  by  Contracts  of  Confidence  are  considered  by  the  Commission  to  provide 
reasonable assurance on the regularity of expenditure, so that the Commission may reduce its 
own  audit  work.  By  creating  a  benchmark  procedure  and  engaging  constructively  with  the 
Member States, this initiative has resulted in improvements in national systems. 

Key supporting information 

DG REGIO has a positive assessment of the systems covered by contracts of confidence which 
is in line with the ECA’s general evaluation in its 2007 report.  

Action 16: Establish common guidelines per policy family 

Action completed: The Commission has stepped up guidance and internal coordination in all 
policy areas. 

Impact 

Indicator:  DGs  with  clear  strategies  based  on  generally  accepted  auditing  and  control 
standards. Commission services, intermediaries and beneficiaries have access to guidance and 
training on key control aspects such as managing external auditors, sampling and compliance 
with  legislation.  In  Research,  control  and  audit  strategies  are  underpinned  by  inter-service 
groups which ensure a consistent approach on all framework programmes. 

Indicator: Level of control awareness and consistency of approach in the Structural Funds. 
The  structural  actions  DGs  have  developed  closure  guidelines  for  2000-06  programmes. 
Extensive training and seminars have been provided to Member States.27 

Key supporting information 

Training  seminars  for  almost  all  Member  State  audit  authorities  on  the  new  regulations  in 
2007,  two  seminars  in  Brussels  in  2008  on  management  verifications  and  certification 
function, and closure of programmes.  

The structural actions DGs have finalised all relevant guidance for Member States for 2007-
13 which will be compiled in the Structural Actions Audit Reference Manual to be issued in 
2009. 

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Action 2.5 of SFs Action Plan. 
Actions 2.6 and 5 of SFs Action Plan. 

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4. 

CONCLUSIONS 

Significant  progress  has  been  made  in  strengthening  internal  control  systems  during  the 
mandate  period  of  the  current  Commission.  A  part  of  this  positive  impact  is  due  to  actions 
launched  before  2005,  but  there  is  certainly  evidence  that  progress  was  significantly 
accelerated with the launch of the Action Plan in early 2006. Likewise, the positive impact of 
the Action Plan will extend well beyond the current mandate period. 

To keep the momentum, further efforts are necessary. The Commission will pursue its efforts, 
and in line with the original concept of the Action Plan, the Commission will continue to need 
and call for the help and support of the other Institutions. 

In  the  Commission's  view,  progress  in  the  following  areas  is  vital  to  underpin  further 
improvements: 

•  as set out in the Communication on tolerable risk (COM(2008)866), appropriate 
targets need to be set in some policy areas to form a basis for a clear judgement on 
how  the  Commission  is  managing  risk  across  its  different  activities.  This  will 
ensure the relevant balance between control costs and error rates; 

•  simplification  of  legislation  (while  providing  for  cost-effective  control)  is 
necessary  as  complex  rules  cause  errors  and  increase  control  costs.  The 
Commission  has  already  proposed  some  simplifications  in  structural  actions  and 
will consider the scope for possible further proposals; and 

•  as  part  of  this  initiative,  the  Commission  will  attach  to  all  relevant  future 

legislative proposals a description of the associated control arrangements. 

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