REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the follow-up to the discharge for the 2008 financial year (Summary)   {SEC(2010) 1437} {SEC(2010) 1438}
Date: 2010-11-18
Institutions: European Commission
Subjects: EU control, EU expenditure, audit, budgetary control, cost analysis, financial control, general budget (EU), implementation of the budget, management audit

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EUROPEAN COMMISSION 

Brussels, 18.11.2010 
COM(2010) 650 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE 
COUNCIL 

on the follow-up to the discharge for the 2008 financial year (Summary)  

{SEC(2010) 1437} 
{SEC(2010) 1438} 

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PREAMBLE 

This is the Commission's report to the European Parliament (EP) and the Council on the follow-up 
to  the  discharge  for  the  2008  financial  year1,  pursuant  to  Article  319(3)  of  the  Treaty  on  the 
Functioning of the European Union, Article 147 of the Financial Regulation and Article 119(5) of 
the European Development Funds (EDF) Financial Regulation. This report is being published in all 
EU official languages in this summarised form.  

The Commission replies to each specific request from Parliament and Council are available in two 
Commission  staff  working  documents2.  The  present  summarised  report  and  the  staff  working 
documents follow as closely as possible the structure of the resolutions containing the requests of 
the European Parliament and the Council. In the Commission staff working documents there is for 
each  request  a  cross-reference  to  the  relevant  paragraph(s)  in  the  documents  from  either  the 
European Parliament or the Council. 

In the discharge decisions for the general budget, the EDF and the agencies, the Commission has 
identified  a  total  of  238  requests  made  to  it  by  the  European  Parliament.  For  108  of  these  the 
Commission agrees to take the action requested by Parliament. The Commission considers that for 
120  requests  the  required  action  has  already  been  taken  or  is  ongoing,  though  in  some  cases  the 
results  of  the  actions  will  need  to  be  assessed.  Finally,  for  reasons  related  to  the  existing  legal 
framework or its institutional prerogatives, the Commission cannot accept 10 requests3. 

The  Commission  has  also  identified  126  requests  made  to  it  by  the  Council.  For  61  of  these  the 
Commission agrees to take the action requested by the Council. The Commission considers that for 
63  requests  the  required  action  has  already  been  taken  or  is  ongoing,  though  in  some  cases  the 
results  of  the  actions  will  need  to  be  assessed.  Finally,  for  reasons  related  to  the  existing  legal 
framework or its institutional prerogatives, the Commission cannot accept 2 requests4. 

The Commission's replies to requests from the European Parliament and the Council concerning a 
number of special reports published by the Court of Auditors are included in the Commission staff 
working documents. 

As  regards  requests  in  the  resolutions  concerning  the  agencies,  most  horizontal  issues  raised  are 
being addressed by the interinstitutional working group on agencies. It is expected that the working 
group  will  provide  its  conclusions  by  the  end  of  2011.  The  Commission's  replies  to  requests 
addressed to it concerning agencies are set out in the Commission staff working documents. 

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2008 General Budget Discharge, 2008 EDF Discharge, 2008 Agencies Discharge. 
Commission  Staff  Working  Documents,  accompanying  the  Report  from  the  Commission  to  the  European 
Parliament and the Council on the follow-up to the 2008 Discharge Decisions. 
See requests 12, 38, 39, 56, 66, 67, 85, 108, 109 and 198. 
See requests 83 and 120. 

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SUMMARY OF COMMISSION REPLIES TO THE REQUESTS MADE BY THE 
EUROPEAN PARLIAMENT AND THE COUNCIL IN THE 2008 DISCHARGE 

A) HORIZONTAL ISSUES 

Error rates in the Statement of assurance of the Court of Auditors (DAS) have been reducing 
in recent years due to concerted action by the Commission. In some areas (notably Cohesion 
policy), the error rate remains too high. To further reduce error rates, the Commission agrees 
to do its utmost to set the conditions for an increase in the European Court of Auditors' "green 
classification"  by  a  further  20%  of  the  budget  by  2014.  It  should  however  be  noted  in  this 
respect  that  any  development  will  depend  on  a  number  of  factors,  notably  the  effect  of 
ongoing  actions  to  reinforce  control  systems  plans,  the  effect  of  the  2007-2013  legislation, 
and the grouping of policies in the Court's annual report.  

In  May  2010  Commissioner  Šemeta  presented  his  agenda  on  discharge  and  audit  to  the 
Budgetary  Control  Committee  of  the  European  Parliament.  The  agenda  sets  out  the  priority 
measures  for  the  mandate  of  the  Commission  (until  2014),  and  includes  notably:  actions  to 
simplify legislation, the establishment of European Trust Funds, management assurance from 
the Member States, cooperation with supreme audit institutions and national Parliaments, and 
strong action on recoveries and financial corrections. 

The Commission is fully committed to proposing where possible the further simplification of 
expenditure  schemes  to  reduce  the  risk  of  error.  It  is  however  conscious  that  simplifying 
eligibility  conditions,  targeting  expenditure  on  specific  objectives  and  controlling  the  error 
rate to within 2% are sometimes conflicting objectives that must be carefully balanced. The 
Commission has already laid the groundwork in its proposal for the triennial revision of the 
Financial  Regulation,  which  should  enable  rules  to  be  better  adapted  to  the  needs  of 
beneficiaries, and emphasise the importance of the output of programmes as well as the inputs 
through  a  wider  use  of  simplified  costs.  By  the  end  of  2010,  as  part  of  the  agenda  on 
discharge and audit, the Commission will adopt a Communication setting out broad principles 
for  the  preparation  of  post-2013  legislation,  including  on  the  balance  between  control 
requirements, eligibility conditions and risk to offer appropriate assurances regarding legality, 
sound financial management and the targeting of expenditure. 

The concept of tolerable risk of error (TRE) is a vital part of the agenda, as it takes account of 
the risk engendered by legislative requirements as well of the costs of control and proposes 
risk  levels  to  be  tolerated  in  view  of  cost  effective  control  levels.  On  26  May  2010,  the 
Commission adopted the Communication "More or less controls?: Striking the right balance 
between  administrative  costs  of  control  and  the  risk  of  error"5.  This  proposed  tolerable  risk 
levels  towards  the  middle  of  the  range  2%  to  5%  (the  "yellow"  zone)  for  both  rural 
development and research, energy and transport.  

While simplification is important, any simplifications decided take time to filter down into the 
annual  error  rates  in  the  DAS  and  in  some  areas,  such  as  rural  development,  will  not  be 
enough  to  reduce  the  error  rate  below  the  materiality  threshold  without  the  risk  of 
jeopardising policy objectives. As an example, simplifications which may be adopted for the 

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post-2013 legislation will not, for major multi-annual programmes, be reflected in the annual 
DAS until at least DAS 2015 (discharge in 2017). For this reason, TRE levels need to be set 
which  reflect  the  regulations  in  force  currently  and  set  an  appropriate  benchmark  for  cost-
effective controls (any decided levels could be adjusted in the light of future simplifications). 

The  Commission  will  present  TRE  proposals  for  the  other  major  policy  areas:  for 
Administrative  expenditure  before  the  end  of  2010;  for  External  aid,  Development  and 
Enlargement in the beginning of 2011 and progressively for the remaining sectors, including 
Cohesion,  later  in  2011.  It  recalls  that  it  is  the  Legislative  Authority's  role  to  decide  on  the 
actual  levels  of  risk  to  be  tolerated,  as  the  Commission,  as  the  auditee,  cannot  take  this 
decision. 

Reliability of the accounts  

The  Commission  has  continued  with  its  accounting  quality  project  which  has  improved  the 
underlying accounting data used in preparing the 2009 accounts. The existing local financial 
management applications are already subject to a validation process with a view to ensuring 
their  consistency  with  the  central  accounting  system.  Also,  the  services  of  the  Accounting 
Officer  are  continuously  monitoring  the  application  of  "cut-off"  principles  throughout  the 
Directorates General. 

The  European  Communities  Pension  Scheme  is  defined  in  the  Staff  Regulations.  When  in 
2003,  the  Commission  presented  a  proposal  amending  the  Staff  Regulations,  due 
consideration  (backed-up  by  a  complex  actuarial  study)  was  given  to  setting-up  a  pension 
fund. However the analysis did not conclude in favour of such a change. Initial set-up costs as 
well  as  risks  of  losses  by  the  fund  due  to  the  investment  climate  and  policy  would  be 
particular  concerns.  The  Commission  considers  that  the  hypotheses  and  conditions  of  this 
analysis have not changed and therefore that the conclusions remain valid. 

Budgetary Management 

The  Commission  has  taken  several  actions  in  order  to  ensure  realistic  budgeting  from  the 
stage  of  the  draft  budget  presented  by  the  Commission.  They  include  continuing  efforts  to 
improve  Member  States'  forecasts  for  expenditure  in  the  area  of  Cohesion  and  transparent 
reporting on implementation rates calculated from the initial budget and from the final budget 
per Financial Framework Chapter. 

The  Structural  Funds  regulations  limit  reimbursements  before  closure  to  95%  of  the  EU 
contribution  and  give  the  Member  States  15  months  after  the  end  of  eligibility  period  to 
submit the final payments claims. Therefore, the Outstanding commitments (reste à liquider- 
RAL)  concerning  the  2000-2006  period  is  limited  by  the  regulations.  It  is  expected  that 
closure payments for this period will start in 2010 and continue into 2011.  

As  regards  the  2007-2013  period,  the  Commission  expects  the  few  remaining  compliance 
assessment  procedures  for  the  management  and  control  systems  in  Member  States  to  be 
concluded before the end of 20106. 

Recoveries and suspension of payments 

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As of 1 October 2010, 5 compliance assessment procedures remain to be concluded for the ERDF and 1 
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The Commission has included more detailed information on the recovery of undue payments 
in the notes to the 2009 accounts. In the Cohesion area, the data for 2009 as submitted to the 
Commission in the 1st half of 2010 has improved considerably. In the framework of its 2008 
Action Plan to strengthen its supervisory role in the shared management of structural actions, 
the Commission has audited national systems for withdrawals and recoveries in 19 Member 
States.  The  remaining  will  be  audited  in  2010.  For  2007-2013,  there  is  a  standard  IT 
procedure  for  submission  of  recovery  statements,  which  should  improve  the  quality  of 
information.  Member  States  are  also  required  to  distinguish  corrections  deriving  from  their 
own controls and those from audits by EU bodies. 

Within  the  Action  Plan  to  strengthen  its  supervisory  role  in  the  shared  management  of 
structural  actions,  the  Commission  has  revised  its  internal  rules  and  operational  procedures 
and  speeded  up  suspension  of  payments  and  financial  correction  procedures  where  serious 
irregularities and system deficiencies had been detected in the programmes' implementation. 
As shown by the Impact report adopted on 17 February 20107, 10 suspension decisions have 
been adopted by the Commission in 2008 and 7 in 2009. Moreover the Commission does not 
hesitate  to  use,  where  needed,  the  new  possibility  offered  by  the  regulatory  framework  for 
2007-2013  which  allows  the  Commission  to  immediately  interrupt  individual  payments 
before starting a suspension procedure when systems deficiencies are detected. The total value 
of  financial  corrections  in  these  areas  amounted  to  EUR  3.8  billion  for  2008  and  2009 
compared to some €3.6 billion during the years 2000-2007. 

Comprehensive  information  on  recoveries  from  final  beneficiaries  and  financial  corrections 
imposed on Member States is already available in agriculture. 

Annual Summaries and National Management Declarations 

In  its  proposal  for  the  triennial  revision  of  the  Financial  Regulation,  the  Commission  has 
reinforced  the  legal  basis  for  the  annual  summaries  by  proposing,  in  all  policy  areas  where 
shared  management  of  EU  funds  is  applied,  to  obtain  annual  management  declarations  of 
assurance  from  accredited  management  bodies  in  the  Member  States,  accompanied  by  an 
independent audit opinion (as is already the case for agriculture and rural development). The 
audit opinion is expected to help in improving the quality of the data submitted. In parallel, 
the  Commission  will  carry  out  an  evaluation  of  the  annual  summaries  after  3  years  of 
existence by the end of 2010.  

The Commission considers that the management declarations proposed for the revision of the 
Financial Regulation are a more appropriate way of obtaining assurance from Member States 
than national declarations signed at political level. The Commission will however continue to 
encourage  Member  States  to  work  on  voluntary  political  assurance  statements,  covering  all 
EU  funds  they  receive,  which  document  the  controls  and  assess  the  effectiveness  of  their 
management and control systems. It will also issue an analysis of value-added features of the 
voluntary national declarations by the end of 2010. 

The Commission's internal control system 

The Commission has taken action to further improve the quality of Annual Activity Reports 
(AARs)  and  in  particular  the  reasoning  and  evidence  presented  underlying  the  assurance 
provided.  For  the  2009  AARs,  the  instructions  were  significantly  overhauled,  a  dedicated 

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helpdesk was set up and more training courses were provided. The Commission fine-tuned its 
peer review system which challenges its services to address identified weaknesses effectively. 

The 2009 AARs show a noticeable improvement across the Commission, both in terms of the 
quality of the evidence presented in support of the assurance and the readability of the reports. 
The  Commission  services  already  provide  clear  information  in  their  reports  on  the 
effectiveness  of  their  and  implementing  partners'  internal  control  systems,  and  on  identified 
weaknesses and remedial measures underway. Services are instructed to establish action plans 
to address the causes of reservations in their AARs and to monitor progress regularly. 

The  report  "Synthesis  of  the  Commission's  management  achievements"  addresses  key 
management issues identified in the AARs and defines the lines of action. It also reports on 
the  progress  achieved  in  addressing  major  cross-cutting  management  issues  and  it  gives  an 
overview of the reservations entered over the last 5 years.  

The  Commission  considers  that  the  system  implemented  has  reached  maturity  and  that, 
globally,  it  provides  the  Commission  and  the  other  Institutions  with  a  clear  picture  of  the 
effectiveness of its internal control systems. 

Interinstitutional debate on the current discharge procedure system 

The Commission agrees to organise a broad discussion among stakeholders and hopes for the 
Budget Authority to provide the necessary budget for this in 2011. The conference, foreseen 
to take place in April 2011, should be an opportunity to agree on a new partnership and define 
the role and tasks of each party with a view to setting the conditions for further improvements 
in the Statement of assurance (DAS). 

Political responsibility and administrative responsibility at the Commission 

The  President  of  the  Commission  has  announced  a  revision  of  the  Code  of  Conduct  for 
Commissioners in his Political Guidelines.  

Concerning  the  disclosure  of  beneficiaries  of  EU  funds,  the  Commission  and  the  Member 
States'  administrations  already  provide  that  information  to  the  public.  In  2010,  the 
Commission has further improved its "Financial Transparency System" website8 that provides 
information on beneficiaries of EU funds under centralised management, in order to include 
the  publication  of  recipients  of  public  procurement  contracts  financed  by  the  administrative 
budget. The Commission also publishes information on the members of expert groups in the 
Commission’s Register of Expert Groups and ensures the publication of the list of the special 
advisers and their curricula vitae on the "Europa" Website of the Commission. 

As  regards  information  on  Non-governmental  organisations  (NGOs),  the  Commission  has 
initiated  a  phased  project  aiming  to  establish  the  classification  "for-profit"  versus  "not-for-
profit" in the Commission's central data base of legal entities. The first phase concentrates on 
legal  entities  in  the  Member  States,  which  accounts  for  the  vast  majority  of  the  registered 
entities. The Commission targets the implementation of this objective as from 2011 onwards. 

European Anti-Fraud Office (OLAF) 

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See : http://ec.europa.eu/beneficiaries/fts/index_en.htm. 

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As  regards  the  reform  of  OLAF,  the  Commission  hopes  that  following  the  results  of  the 
interinstitutional dialogue it can present an amended proposal by the end of 2010 and that the 
legislative process can be concluded by the end of 2011. 

As  regards  the  appointment  of  the  new  Director  General,  following  the  publication  of  the 
vacancy notice, the Commission has endorsed a short list of suitable candidates. As required 
by  Regulation  1073/1999,  a  favourable  opinion  from  the  Supervisory  Committee  shall  be 
needed  on  the  short  list  agreed  by  the  Commission.  Subsequently,  the  list  of  suitable 
candidates has been transmitted to the European Parliament and the Council for consultation. 
The Commission is committed to fully respecting the provisions of Article 12 of Regulation 
1073/1999 concerning the appointment of the Director General and to involve the European 
Parliament and the Council at an early stage.  

B) SECTORAL ISSUES 

Own resources  

As  regards  traditional  own  resources,  the  Commission  will  continue  to  verify  that  Member 
States  correctly  maintain  the  separate  B  accounts.  Any  weaknesses  found  will  be  addressed 
with  the  relevant  Member  States  and  any  necessary  guidance  given.  Where  appropriate 
measures will be taken to recover any amounts of own resources or interest due. 

As  regards  the  VAT-based  own  resources,  the  Commission  has  introduced  Management 
Meetings as an efficient and effective tool to address reservations that merit special attention. 
The  number  of  long  outstanding  reservations  has  been  reduced  from  35  to  12.  At  the  same 
time action has been taken to improve the overall age-profile of reservations with 63% of all 
current reservations now having been set in 2008 or later. 

Regarding  GNI-based  own  resources,  the  Commission  has  set  up  and  applies  a  complete 
common  framework  of  GNI  validation  based  on  the  verification  and  improvement  of  the 
statistical  sources  and  methods  used  by  Member  States  to  calculate  their  GNI  data.  In 
addition,  the  Commission  started  using  direct  verification  since  2007;  established  specific 
rules that were approved by the GNI Committee; and has already applied direct verification in 
almost  all  Member  States.  The  Commission  is  continuing  its  work  on  the  issue  of  national 
supervisory  and  control  systems  for  national  accounts  in  cooperation  with  the  GNI 
Committee. 

As regards Greece, the present levels of the Gross National Income (GNI) data used for the 
calculations and contributions for own resources, including the data made available in  2008 
and 2009, are in line with the results of a thorough verification carried out by the Commission 
in 2007. Furthermore, a thorough analysis of the potential impact of the issues which emerged 
from the report COM (2010) 0001 on the deficit and debt statistics did not reveal a significant 
impact on GDP/GNI levels. 

Agriculture and Natural Resources  

The control requirements on Member States in the field of agriculture expenditures carried out 
under  shared  management  take  into  account  the  fundamental  EU  law  principles  of 
effectiveness,  equivalence,  loyal  cooperation  and  proportionality.  As  regards  the  latter,  an 
example is the percentage of direct aid applications to be checked by Member States which 
increases if the level of irregularities found in the initial 5% sample is high. Where in the past 

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significant  weaknesses  have  been  identified,  the  Member  States  concerned  have  been 
requested  to  establish  detailed  action  plans  in  close  cooperation  with  the  Commission.  The 
implementation of such action plans is closely followed up by the Commission, including the 
action plans established in 2009 by Bulgaria and Romania to address the deficiencies found in 
the Integrated Administration and Control System (IACS) in these Member States. 

The constant improvement of the IACS is confirmed by the results of the conformity audits 
which the Commission has carried out over the past years in Member States as well as by the 
low  error  rate  indicated  in  the  control  statistics  which  it  receives  from  Member  States  and 
which to a large extent are verified and validated by the certification bodies. All deficiencies 
found are followed up through conformity clearance procedures which ensure that the risk to 
the EU budget is adequately covered. 

As regards rural development, and notably agri-environmental measures, the Commission has 
taken  several  steps  to  simplify  existing  rules  and  to  ensure  effective  and  efficient 
implementation  of  the  control  rules.  Most  recently,  the  Commission  has  enhanced  its  audit 
activities in this area and has established a task force to follow up the high error rate reported 
by certain Member States in 2009 for rural development measures under Axis 2. Commission 
Regulation (EC) 1975/2006 will be recast during 2010 in order to further simplify and clarify 
certain rules. 

Cohesion, employment and social affairs  

The  Court's  2008  Annual  report  is  based  on  a  sample  of  2000-2006  expenditure  only. 
Therefore the situation was expected to be in line with the previous annual reports. For 2000-
2006  the  Commission  will  correct  the  deficiencies  identified  during  implementation  and 
ensure a rigorous closure process. 

For  the  2007-2013  programmes,  the  Commission  considers  that  the  reinforced  legal 
framework  has  enhanced  management  and  control  systems.  The  simplification  measures 
adopted in 2008-2009 should lead to lower error rates in interim payments. The first effects of 
this  reinforced  control  framework  are  expected  to  be  visible  at  the  end  of  2010  onwards, 
based  on  the  results  of  Community  audits  and  the  submission  in  December  2010  (and 
thereafter in December each year) of the results of the 2009 audits by Member States' audit 
authorities  of  the  yearly  statistical  samples  of  expenditure  declared  under  the  2007-2013 
programmes. 

An indication on the results of the reinforced control framework is the Commission's audit of 
a sample of projects under the 2007-2013 period, using a methodology similar to the Court's. 
As  reflected  in  the  Commission's  Impact  report  of  17  February  20109,  the  first  preliminary 
results  of  this  inquiry  (based  on  payments  until  May  2009)  reveal  a  clear  decrease  of  the 
estimated error rate that suggests that actions taken are sound. Nevertheless, this result should 
be  read  with  prudence,  as  it  is  based  on  a  population  of  15  Member  States,  and  not  all 
Member  States,  including  some  countries  where  most  of  the  important  errors  were 
concentrated in the past, had declared expenditure at the time of the study. 

Internal policies, including research 

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The  controls  applied  in  the  research  area,  including  the  audit  strategy,  the  thorough 
implementation of its results and the correction of systematic audit findings for non-audited 
contracts  (extrapolation)  provide  for  a  stringent  control  of  the  costs  claimed,  which  has 
resulted  in  a  reduction  of  the  error  rates  over  time.  Furthermore,  the  Commission  is 
committed to ensuring that it provides for uniform interpretation and application of the rules 
and procedures. 

The  Commission  adopted  a  Communication  on  simplifying  the  research  framework 
programmes10 to open a debate on reducing the complexity of rules which is a major source of 
error. The Commission believes such a debate can result in concrete proposals which can then 
be implemented in Framework Programme 8. 

In  the  area  of  education,  the  Commission  has  sent  updated  guidance  relating  to  the 
performance of secondary controls to the National Authorities in December 2009. It has also 
reinforced  its  on-the-spot  visits  that  focus  on  the  existence  and  implementation  of 
management procedures and checks as described by Member States.  

The  Commission's  detailed  replies  to  requests  in  other  specific  policy  areas  under  internal 
policies are set out in the staff working documents. 

External actions, including the European Development Funds (EDF) and enlargement 

The  Commission  will  continue  to  improve  its  supervisory  and  control  systems,  including 
improvements  in  its  audit  strategy  and  planning.  EuropeAid  has  implemented  significant 
improvements to its audit methodology and IT tools (CRIS).  

The Commission fully supports the Court of Auditors’ requests to obtain necessary supporting 
evidence from UN organisations, and this principle is clearly stipulated in the Financial and 
Administrative  Framework  Agreement  (FAFA).  The  adoption,  in  April  2009,  of  standard 
terms  of  reference  for  verification  missions  has  improved  the  cooperation  between  UN 
agencies and the EU, and has helped ensure that the UN co-operates more efficiently with the 
Court. The Commission continues to work to improve the system, and it agreed with the UN 
in April 2010 that additional information, including extracts from internal and external audit 
reports, could be made available on request. 

In  the  framework  of  the  triennial  revision  of  the  Financial  Regulation,  the  Commission  has 
proposed that the Commission can set up and manage Trust Funds for external actions, which 
would intervene in emergency, post-emergency crisis operations or for thematic actions. 

The  Commission  is  revising  its  Guidelines  on  Budgetary  Support  that  are  scheduled  to  be 
finalised by the end of 2010. Within the scope of this revision, particular attention is given to 
supervisory  and  control  systems.  In  addition,  the  monitoring  and  annual  reporting  on  the 
compliance with the eligibility criteria will be strengthened as well. Capacity building projects 
within  the  scope  of  Budgetary  Support  operations  are  subject  to  the  same  supervisory  and 
control system as any other project, which includes audits. More detailed information on this 
and other requests related to the EDF is set out in the Commission staff working documents. 

The measures taken to improve the available information on NGOs are explained above under 
the horizontal issues. 

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A  number  of  improvements  in  the  management  of  pre-accession  aid  are  already  under 
implementation to increase the effectiveness and impact of financial assistance and to better 
link the financial assistance to political priorities. 
As regards Romania and Bulgaria11, the Commission reports regularly under the Cooperation 
and Verification Mechanism on progress in judicial reform, the fight against corruption and - 
for Bulgaria - the fight against organised crime. The latest set of reports was adopted on 20 
July 2010.  

Administrative expenditure 

As  regards  the  Individual  Rights  Information  System  (IRIS),  the  Office  for  Administration 
and  Payment  of  Individual  Entitlements  (PMO)  has  already  started  the  tests  of  the  re-
developed  modules  for  the  management  of  individual  entitlements.  The  extensive  test 
programme elaborated takes into account the lessons drawn from past experience. PMO has 
also  reinforced  its  internal  control  procedures  to  address  the  weaknesses  identified  by  the 
Court concerning the transfer of acquired pension rights. 

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11 

In  the  European  Parliament's  resolution  observations  concerning  Romania  and  Bulgaria  are  placed 
under the heading "External actions" (paragraphs 249-257). 

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